Is Offshore Banking Legal?
This is a question often asked about banking offshore and whether holding funds in an offshore bank account is legal or not. And the answer is it's perfectly legal.
However, it helps if one first clarifies the situation by defining the word "offshore".
"Offshore" simply means some place other than your home country. So if you're in the USA, then a bank account in the UK could be considered offshore, or one in Australia. Neither of these places are known tax havens of course, but never-the-less they would be considered "offshore" if you banked there but didn't live there.
That is the essence of what the word offshore means - just someplace else. Of course there are various associated inferences also - like linking the word with tax havens, or even nefarious activities like money laundering and other shady dealings.
Provided you live in a country without currency exchange controls - which is most of the developed world - then transferring your funds to an overseas bank account is a simple matter, and like I said 100% legal. However, there can be complications - if you don't know your local rules and regulations.
Give you one example. If you're a US citizen or resident, then you are obliged to report the existence of any offshore bank account with a balance of $10,000 or more. You're allowed to have as much money as you like there - but are required to report it. Many other countries do not have this requirement.
Another example would be the existence of various reporting requirements. These vary from country to country - but let's say you wanted to transfer $50,000 from you domestic bank account to an offshore one - then it's highly likely that transaction would be reportable by your bank - meaning they would have to notify the relevant authorities that it has been done.
Another obvious question would be, "Why does anyone want to bank offshore?". And the potential answers are many. It could be to seek more security, or more financial privacy, or to diversify currencies, or that overseas business dealings make having such a bank account necessary.
If opening an offshore bank account is something you're interested in, and would like a good overview of the subject before leaping in, then I would recommend you download a free copy of my e-report - The 10 Things You Really Need To Know Before Opening An Offshore Bank Account.
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