what is an off-shore bank account? how do you open such an account?

Question

how does an off shore acct work? where can one open such an acct? must you declare this money to the US govt for tax purposes? what amt can an off shore acct be? how do you take out money from your US bank acct to deposit to offshore acct? how do you reinstate money to US bank acct for the purpose of home purchasing? Many thanks, Ms. Bibi

Answer 1

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.

Go to the Bahama's, Cayman Islands, Bermuda, any number of island countries and open one.

Bermuda and the Cayman's are probably the two most famous for their financial institutions, both insurance and banking. Belize has been trying for the past few years to draw more customers in by having tax friendly havens. (Belize is a really poor country and needs the money they get from selling passports and banking services. A few years ago, when China was about to take back Hong Kong from Great Britain, Belize was selling passports to Hong Kong citizens for $20,000 each)/

Answer 2

An offshore bank account is simply a vehicle to protect your money. Offshore means the account is held in a jurisdiction that is usually provides banking secrecy. To make an offshore account bulletproof you need to combine it with an offshore foundation or an offshore bearer share corporation. Money can be wired back and forth to these accounts easily. What you have to think about is setting up a legitimate structure for what you want to do. I cannot give you tax advice, but I can tell you there are ways to get everything done if you spend some time thinking about it. For example, hypothetically if a man named John were to purchase a house with offshore money why wouldn't John get a mortgage from an offshore corporation. Now an offshore bearer share corporation's ownership is unknown to everyone. Who ever holds the physical shares (pieces of paper!) owns the corporation. This is very useful. Anyway this offshore corporation would loan John the money for the house. Now there is a registered mortgage against John's house which is also extremely good asset protection. If someone sues John and tries to take his house, only the equity is at stake. If John has a large mortgage there is nothing to come after!! Courts do not set aside mortgages or the entire mortgage business would be ruined. This is far to complicated to discuss in full here. Please read more here http://www.searchallinone.com/offshore-banking

Answer 3

Faye is correct. Although you can also hire a company to send someone to one of these places to open the account for you. Costs range around 2k.
http://www.offshorecompany.com/banking/accountcosts.asp

With regard to taxes, though, you will be required to declare any money coming into a US bank/depositor as income to the IRS. If you do business with a company, they can pay you via deposit to your offshore account, which does not need to be reported as income by you to the US government. Once it is transferred to the US, it is considered income and taxable.

Transfers of these funds are usually done via wire transfer through your bank or outside service such as:
http://www.orderwires.com/

BTW - Unless you are making very serious money with a business, it does not usually make sense to try to go offshore. I am speaking about amounts nearing 500k annually or higher.

If you have a US business that is earning less, it makes sense to open regular business accounts through your corporate entities, registered in either Nevada or Delaware due to their privacy advantages.

If you do not own a business, there is no purpose to having an offshore bank account.

Be blessed,

Answer 4

An offshore account is NOT a legal way for a U.S. resident to avoid taxes. You must report all your income, whether you deposit it offshore or onshore. And you must report transactions such as the sale of a home.

Transferring money between bank accounts is easy, usually done via wire transfer. Most any bank anywhere in the world can process a wire transfer.

Answer 5

If you don't want to declare any thing you can keep your money with me, where in I can keep your money and keep giving you monthly interest of 3% and whenever you want your money back I can transfer you money to your account in US or western Union way