Offshore banks are those that are located outside country of any bank account holder. But in normal usage, the banks that provide offshore banking services are called offshore banks. They are different from local banks that are also known as onshore banks. Offshore banks are mostly located in various offshore jurisdictions. These locations provide specific facilities for establishment of offshore companies. Apart from that, several banks in these jurisdictions are also licensed to provide exclusive services to overseas companies.
There are several features that distinguish offshore banks from onshore banks and there are different pros and cons for opening accounts in both these different types of banks. Following are important factors that distinguish between offshore bank accounts and local (onshore) bank accounts.
Opening bank account:
In case of opening an account in an onshore (or local) bank, the consumer will adopt well known process of filling the required CA/SA form, submit required documents, provide proofs about his/her address and identity and pay the required fee.
On the other hand, opening offshore bank account doesn’t need the physical presence of the person who wants to open his/her account. The overseas bank accounts can be opened by phone, email, internet, fax or via courier.
Protection and Security:
Onshore bank accounts not only require complete identification of bank account holder but their names are also available to public. In case of any legal issue, complete details are provided to authorities.
The situation is completely different in case of an offshore bank account. Now, many overseas banks require identification and capital proof of the account holder but the identity of the owner remains private and the capital in the offshore bank account is kept secure by law in case of any legal issue. This also applies in case of divorce or other legal problems.
Taxation:
An onshore bank account is affected by all type of taxes that are applied by the government. That doesn’t happen for an offshore bank account. Usually overseas jurisdictions are free from taxes or have very few taxes and these rules are abided by offshore banks. Therefore, opening a bank account in overseas jurisdiction provides benefit of less taxation.
These are the basic differences between an onshore and offshore account. If you want to take advantage of the benefits provided by an offshore bank account, then you can contact Riz & Mona Consultancy for complete information and practical assistance. We are available via landline # 971-4-5586339 or email address info@rizmona.com.
