If you tell the average American that they might benefit from having a foreign bank account, they will probably look at you funny and say something like, "Why in the world would I want to do that?"
When it comes to their money, Americans tend to be very close-minded, and they also tend to be suspicious of foreign banking activities in a way that seems almost unnatural. After all, the media has told them a never-ending stream of stories about political shenanigans, financial disasters, and criminal schemes in foreign banking.
Still, most Americans would be better off if they had a foreign bank account. Already, foreign banking, or "offshore banking" as it is more commonly called today, has become an important tool for thousands of legal businesses and people who are doing well. And in the high-tech, computerised, satellite-based world we live in now, it's easier than anyone could have thought.
Who would have thought, even 5 years ago, that someone asking for a check stub number in a simple transaction like talking to an American Express agent could be in India and speak better English than most Americans? On top of that, this person was likely born in a low-tech mud hut and did not have electricity or running water until 15 years ago. In practise, a foreign bank account gives a smart investor the chance to combine the benefits of different banking activities into a unique way to save money on taxes and make money. For a smart, careful investor, it is one of the best ways to increase their financial options because it is one of the most creative ways to spread out their assets.
Offshore banks don't do business in the United States, which is how they got their name. This means that our state and federal laws and rules don't usually apply to accounts held in offshore banks. Offshore banks can also offer a wide range of services that domestic banks are not legally allowed to do. Investors can make more money, pay less in taxes, and borrow money at lower interest rates by using these services in a smart way. All of this can be done without the confusing maze of red tape that is common in the United States. Around the world, there are about 45 places that call themselves offshore financial centres or banking havens. Many of these centres are far away, don't have enough support services, or have problems with their banking or tax laws that could affect your privacy or the rate of return on your investments. That doesn't mean you have to avoid banks in these countries when you're looking for a place to open a foreign bank account.
But it does mean you should be extra careful and make sure the bank is well run and has the services, experience, and security you want. You should think about getting one or more offshore bank accounts if you want to increase your wealth by spreading out your investments, lowering your tax burden, and making more money from your investments.
