Offshore accounts have gotten a bad reputation as it has become a way for some shady individuals or businesses to avoid paying the right taxes.
However, like all banking products, offshore accounts were introduced to serve legitimate purposes, and there are a number of benefits to opening an account overseas.
Here are a few great reasons to get one according to a reputable UAE bank offering offshore accounts facilities:
1. Reduced risks due to political tensions
The political climate in much of the West has become murkier over the years. Some people believe that their local governments are finding ways of trying to garner more funds from its people.
For instance in Iceland and Cyprus, capital controls have been introduced while Spanish residents pay for bank deposit countries. It may only be a matter of time before similar regulations may be imposed by your local government.
By placing your personal or business savings in an offshore account, this makes it more difficult for your local government to easily confiscate, freeze or even devalue your hard-earned assets.
2. Access to more stable banking systems
Banking systems abroad tend to be healthier and more stable than banks in the West. For instance, banks based in the Cook Islands hold large amounts of cash deposits.
Another popular option for offshore accounts is Singapore. As tiny as this country may be, it has never experienced a banking failure. By placing your money in countries abroad known for stability and secure banking facilities, you lower the risk of losing your cash in the event of a financial industry meltdown in your home country.
Look for banks that are capable of holding a lot of cash at hand. Also, take note of the country where the bank is based. More stable jurisdictions are known to have low levels of debt as compared to less stable ones.
3. Currency diversity
Having your savings in several different currencies is one way to reduce risk to your financial assets. Currency diversification also protects the value of these assets.
Most local banks are unable to provide you with options to hold or own several foreign currencies in one account. This is not the case with offshore accounts.
For instance, banks in Hong Kong offer account holders the opportunity to own more than 12 different currencies. Some banks in the Cook Islands provide at least 11 currency options.
4. Better access to medical treatment abroad
There are several possible reasons why you may opt for medical treatment abroad. Perhaps you are a frequent business traveler, you are denied treatment in your home country, the cost of the treatment locally is exorbitant or too high, or the operation is not available locally. Whatever the case may be, opening an offshore account offers you more medical financing solutions.
Imagine having an expensive operation or medical treatment performed abroad. Most airports do not allow passengers to carry large amounts of cash. If you don’t have an overseas bank account, you will be forced to transfer money from the account in your home country to where you are having the operation.
The issue arises if your home country imposes some form of capital controls. In such cases, you may have difficulty transferring the amounts you need to pay for your medical fees.
Having an offshore account gives you better access to your personal funds while you are abroad. By placing some of your funds in a bank account overseas, you avoid implications, complications and potential capital control fees imposed by your home country.
5. Higher interest rates
Most banks in the West offer dismal interest rates. These rates are nowhere near the rate of inflation. As a result, the value of your savings gets lower over time.
If you wish to enjoy better returns on your deposits and savings, it would be better to look for banks abroad. There is a better chance that you will find a bank that offers higher interest rates abroad than in your home country.
By placing some of your savings in an offshore account, you are ensuring that a part of your assets remains safe and protected regardless of the political or financial issues in your home country.
Open an overseas bank account for yourself or for your business today and see the difference.