What is Off Shore Banking?
Offshore banking simply means banking outside the country of your residence. When you deposit funds in a bank that is located outside the country in which you live, it is termed as offshore banking. Often offshore banking is done in a country which has a legal or a financial advantage along with low taxation regime.
Why should you open an Offshore Bank Account?
- Through offshore banking, you can get a political and social stable jurisdiction to operate your account. It is beneficial when you fear the attachment or seizure of your assets in the case of a political turmoil in your resident country. It also protects your money against unsound banking system in your residence country.
- You might also get the advantage of lower cost and higher interest rates in offshore banks. It is mostly due to a lack of government intervention in that country or other economic conditions.
- Offshore banking is mostly done in tax haven countries. This means that your tax liability is lower or could be nil.
- Offshore banks can also benefit you in terms of regulations and formalities.
- Offshore banking offers privacy to your deposits.
- It also helps you operate in multiple currencies without incurring currency conversion fees.
Hong Kong is one of the largest international banking centres in the world. Offshore banking in Hong Kong offers the following additional advantages to your business and your finances.
- Choice of currency you want to trade and save with.
- Low tax regime
- An absence of foreign exchange controls
- Ease of offshore company setup
- Adherence to international standards on tax information and exchanges
Moreover, offshore banking in Hong Kong gives you the convenience of conduction offshore banking activities, international trade, investment activities and asset protection.
How to open an offshore bank account?
- An offshore bank account can be opened easily in a few hours once you are aware of all the formalities. Each foreign jurisdiction and offshore banks have different regulations and requirements. Therefore, the procedure can vary for each.
- Similar to opening an onshore bank account, for opening an offshore bank account in Hong Kong you would be asked to submit your personal details like your name, address, contact details along with the documentary proofs of the same.
- As per the government guidelines, the KYC procedure of Hong Kong banks are stringent and therefore you might also be asked to submit documents pertaining to your investments and deposits elsewhere and other financial reference document form your current bank.
- If you are planning to open an offshore account for your company, you would have to submit the following documents –
- A detailed business plan
- An initial deposit
- The contracts and invoices generated by the company to support the off shore bank account
- Recent address proof of the bank signatories.
- Passport copies of bank signatories
- Bank reference letters for bank signatories.
- It is recommended that you visit Hong Kong to open the offshore bank account. However, if you are unable to visit the country you can open the account through remote bank account opening.
Contrary to the beliefs, opening an offshore bank account is relatively simple. All you have to do is fill the application form, supply the documents and complete the formalities of the respective banks. You can also take the assistance of a service provider for the same.