Offshore Banking

[nogutsnoapplepie]

NETWorth

Offshore accounts no longer so exclusive

ANDREW LEPPARD

"Marriage is like a bank account. You put it in, you take it out, you lose interest"

_Professor Irwin Corey (1914-)According to recent research by a major British Bank, 81% of expats fail to consider their banking needs before moving overseas.

If you have decided that Thailand is the place for you to retreat, the last thing you want to be concerned about is how to get access to your money and if your money is performing to its maximum.

Most foreigners open bank accounts in Thailand for day-to-day expenses, regardless of what other options they take up. Others use Internet banking and multi-currency accounts offered by high street banks back home.

Multi-currency accounts will enable foreigners to make transactions in various foreign currencies and can be practical if they are a frequent international traveller and want to avoid fluctuations in exchange rates. However, most multi-currency accounts will charge an annual fee with numerous boundaries.

When opening local savings accounts foreigners need to bear in mind:

- The currency in which they are paid _ the employer may choose to pay part of the salary in baht into a Thai bank and part in sterling/US to another account.

- Accessibility _ it is sometimes easier to access an offshore account, through cards and internet, than a local one.

- Exchange control regulations _ foreigners need to check find out if they can get their money out of the country.

- The interest rates on offer.

Offshore bank accounts are still perceived by many to be exclusive, but their popularity is increasing in proportion to the growing number of Brits living and working abroad.

Opening an offshore savings account costs 150 with NatWest's Advantage International account (paid annually in advance). Other high street banks such as Lloyds TSB's Overseas Club are taking advantage of the accounts' attractiveness by decreasing their application and administration fees. The minimum balance for offshore current accounts ranges from 100 (Lloyds TSB Offshore) to 5,000.

Some questions and answers may be in order, then.

Q: I am a British foreigner living in Thailand. Could you tell me where I can save my money to earn some interest, even though I don't have a UK address?

A. You don't have to have a UK address to put your money an offshore deposit account. They will obviously require proof of identity, and details of where the money is coming from, but that should be no problem. You should not be liable to pay tax so the interest earned will be gross. Don't just go for the highest return, but pick a company with local presence with assured customer support.

Q: How do all the offshore jurisdictions vary? What dangers are there in centring my funds there?

A. The Channel Islands (Guernsey, Jersey, Isle of Man) are the safest areas in the world. That is why all the major insurance companies are based there, along with most major banking groups. The main reasons are: a) confidentiality, tax-free concessions, c) worldwide access, d) UK law and arbitration, e) full compensation cover, f) internationally recognised, g) global portability and, h) centuries-old trading history.

Q: Does "tax free" really mean "totally tax free", or are there hidden dangers?

A. "The avoidance of taxes is the only intellectual pursuit that still carries any reward" _John Maynard Keynes

Offshore savings plans, such as in the Isle of Man, are usually structured as 101% "unit-linked" life policies. For that reason, they are free of capital gains tax, corporate tax and income tax. Consequently, they grow at higher rates than their counterparts placed back home.

Q: Taxation aside, what other benefits are there in investing offshore?

A. 1) preference of retirement date; 2) can cash all or some of the fund at any time; 3) can relocate all previous pension sums into one fund; 4) can borrow a high percentage of the fund without interest; 5) income totally tax-free using your offshore trust; 6) lump sums or regular income totally portable; 7) invest or leave your own money as you like.

Q: How do I get access to my money when I need it?

A. There are telegraphic transfers, fax mandates, Swift credits, ATMs, American Express, or the likes of Western Union. Of course, you can also write a cheque.

By connecting your investment to an offshore bank account (usually in the same jurisdiction) you direct your bank by fax, e-mail, phone or letter, to: transfer, debit, credit as you see fit. You may want to set up an offshore trading company to carry out payments or receive funds to any number of relatives or worthy causes.

The point is, you have the control over the money that is yours. You determine what you spend it on and, when you spend it that situation is something that all onshore people desire and what all offshore people have a right to expect.

A proficient independent adviser not only saves you money, but makes you money. Working away from home should go hand-in-glove with playing away from home, investing away from home and, equally as important, keeping your money.

Finding a suitable offshore savings current account may take a bit of effort to research, but it could make all the difference between a smooth new life abroad and a costly and time-consuming bureaucratic nightmare. The options of offshore may seem overwhelming, but by talking to a local independent consultant, you should acquire enough information upon which to base your decision.

Questions to the author can be directed to a Barclay Carrigan International consultant on 02-653-1971 or by e-mail via [email protected].

You only pay a fee to open an offshore bank account if you use an agent/broker!!!

[yuyi]

..

Q: How do all the offshore jurisdictions vary? What dangers are there in centring my funds there?

A. The Channel Islands (Guernsey, Jersey, Isle of Man) are the safest areas in the world. That is why all the major insurance companies are based there, along with most major banking groups. The main reasons are: a) confidentiality,  tax-free concessions, c) worldwide access, d) UK law and arbitration, e) full compensation cover, f) internationally recognised, g) global portability and, h) centuries-old trading history.

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<{POST_SNAPBACK}>

Confidentiality? In the Channel Islands?

Have a look at the EU efforts to get all information exchanged about all account holders from all banks in the EU area, including U.K. The taxman will get hold of this information, more sooner than later.

if you want confidentiality, you better get your accounts at a bank outside of the U.K. / EU area. Switzerland is still fine, but only if your address, which you gave the bank, is outside of the EU / U.K., for example in Thailand.

[OldAsiaHand]

Confidentiality is a quaint and almost wholly inaccurate concept with respect to international banking these days. Don't use an offshore bank because you're looking for secrecy. It doesn't exist. A blizzard of anti-avoidance legisation from tax collection agencies all over the world fatally wounded it in the 90's and then the stricter banking regulations post-9/11 finisihed it off. Today it's a dead issue everywhere.