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Article - Offshore Banking

Considering a Swiss Bank Account?

Offshore banking can offer companies and individuals real benefits such as higher interest rates, tax savings, easier access, and greater privacy. But the ease with which offshore banking can be conducted makes it a magnet for criminal activity. A bank is considered "offshore" if it is located in a country other than that of the account holder. Regulation of the industry varies widely and offshore banking has long been a favored means for money laundering and tax evasion. The advent of the internet and electronic banking only made it easier for just about anyone to setup an offshore bank account.

However, fraud in offshore banking is considered a white collar crime. It can be as small as a one or two man operation that pockets your money or a sophisticated crime syndicate that fuels their operations with illicit funds. Some fraudulent entities will sell their scheme to the victim as an account with comprehensive management and bookkeeping services and others offer unrealistically high interest rates. Offshore banks are often used to perpetrate Ponzi schemes. Even promotions that say they are legal need to be checked into thoroughly because scammers know that only the client needs to be convinced in order to make the sale, not the IRS.

In the past, offshore banking was mostly the concern of the wealthy, but today offshore banking's benefits and pitfalls are available to more middle income people. One way that people who are not wealthy can get into offshore banking is with a forex account. It can take as little as five hundred dollars to open a small account, making it more accessible to many people. As a result, fraud in forex is becoming a serious and growing problem.

Banking offshore as a tax avoidance strategy is a serious enticement to many individuals and companies. Many taxpayers are unsure of the difference between what constitutes legal tax deferment and what would be considered a fraud. As many as forty countries actively promote themselves as being tax havens. A few even extend asylum to criminals who wish to establish offshore accounts, provided that they have the necessary funds. The IRS is tightening up its focus on United States citizens who have ten thousand dollars or more in offshore assets. Advice from an accountant with experience in offshore banking is helpful for those who need to file a Foreign Bank Account Report.

The IRS Website lists several kinds of tax abuse schemes to be wary of. A few of the examples on their list include foreign, offshore partnerships as well as private annuities, bank accounts, and credit cards that are located offshore.

Those who desire to legally use and establish offshore accounts need to use caution both in finding a reliable and dependable source for banking services, and in finding accountants specializing in the intricacies of offshore bank accounts. A number of reputable websites help to keep investors informed and rate the quality of offshore accounts.