The Cayman Islands Banking Guide - The Official Website of The Cayman Islands

Offshore banking has often been associated with the underground economy and organized crime, via tax evasion and money laundering; however, legally, offshore banking does not prevent assets from being subject to personal income tax on interest. Except for certain persons who meet fairly complex requirements, the personal income tax of most countries makes no distinction between interest earned in local banks and those earned abroad. Persons subject to US income tax, for example, are required to declare on penalty of perjury, any offshore bank accounts—which may or may not be numbered bank accounts—they may have. Although offshore banks may decide not to report income to other tax authorities, and have no legal obligation to do so as they are protected by bank secrecy, this does not make the non-declaration of the income by the tax-payer or the evasion of the tax on that income legal. Following September 11, 2001, there have been many calls for more regulation on international finance, in particular concerning offshore banks, tax havens and clearing houses such as Clear stream, based in Luxembourg, being accused of being a crossroads for major illegal money flows. An offshore bank is a bank located outside the country of residence of the depositor, typically in a low tax jurisdiction (or tax haven) that provides financial and legal advantages. These advantages typically include some or all of: Strong privacy, Less restrictive legal regulation.

While the term originates from the Channel Islands "offshore" from Britain, and most offshore banks are located in island nations to this day, the term is used figuratively to refer to such banks regardless of location (Switzerland, Luxembourg and Andorra in particular are landlocked). What type of services is available from offshore banks? The same as the services from any high street bank, plus the extremely confidential Swiss style numbered accounts. Many of the offshore banks listed on this site are respected AA credit rated international banks that everyone has heard of before. They have simply set up an offshore division or branch division within a tax haven to attract a share of the enormous international trade, and offer almost the same services as any domestic bank.

Such as the following:

* Personal and corporate current/checking account

* Personal and corporate savings accounts

* Secure internet banking facilities

* Anonymous numbered accounts (extremely confidential)

* Debit and ATM cards, which are accepted globally

* Credit cards

* loans

* Mortgages

Going offshore in simple terms means placing your savings, investments, assets or business concerns outside of your home country, within one of the many tax havens. A tax haven is a country that has very favorable tax advantages, which means that your savings, investments, assets or business profits can grow free of almost any taxation. Although taxation is only one reason why many decide to go offshore. To protect the free flow of your personal information and dealings. An offshore entity has no obligation to release your personal or business information, affording you with a great deal of privacy & confidentiality. In general terms your personal information will not be divulged to any governing body or tax authority unless suitable evidence can be shown to prove that you have been involved in criminal activities, such as money laundering or drug trafficking. Financial privacy is becoming a thing of the past. Almost every single transaction made at a bank or ATM, by law, must be recorded and filed. Consumer credit agencies maintain databases full of sensitive information that is used and shared by other organizations and agencies. Asset collectors routinely advertise their ability to locate bank accounts, brokerage accounts, and real estate and business holdings. Should asset collectors find substantial wealth, the individual or corporation becomes an easy target for a lawsuit. Unless ethical and legal steps are taken to insure privacy, sensitive and confidential information could easily get into the wrong hands. Placing your assets, investments, savings bank and brokerage accounts offshore will keep them off the asset collector's radar screen. Consumer credit agencies and government departments do not have access to foreign account records or transactions. Domestic property may be held in the name of a foreign corporation (IBC) or trust. This insures that asset collectors and agencies cannot locate it. By taking advantage of these methods an individual or corporation becomes a smaller target and the likelihood of being sued is reduced. Utilizing offshore tools to protect privacy could mean the difference between keeping and losing what is rightfully yours. As stated above, your savings, investments, assets or business profits can grow almost free of any form of taxation. This does not mean tax avoidance, it simply means whilst your assets are held offshore they will benefit from very favorable tax advantages. There will for many however, is a potential tax liability when you look to repatriate your assets to your home country. This will depend on your nationality and your country of residence at the time of repatriation.