What is an Offshore Bank Account?
As exciting as the term "offshore bank account" sounds, it's really less about James Bond than you might think. Offshore bank accounts are any bank holdings you have in another country. Despite the associations many people have, there isn't anything illegal about opening an offshore investment account.
Advantages of Offshore Bank Accounts
Offshore bank accounts come with a multitude of advantages. Most people find that the many benefits of offshore investment accounts help them overcome their preconceptions about the topic. Some of those advantages include the following:
- Keeping your money in an offshore bank account can have significant tax advantages, since the income from these accounts is not reported to your home country.
- When liability is a concern, offshore investment accounts are a good idea. A creditor is limited in accessing your money when it is held in an offshore bank account.
- Privacy is another important advantage of offshore investment accounts. When your money is kept offshore, you are the only one who has to know the details about your account.
What are QROPs?
"QROP" stands for "qualified recognized overseas pension schemes." QROPs are offshore investment accounts that are a great alternative for citizens of Canada and the UK who are living in other countries. This is a completely legal way for citizens to move their pension accounts off shore. Citizens of the UK and Canada must have lived overseas for more than five years to be eligible for QROPs.
Advantages of QROPs
There are several advantages to setting up a QROP. It's important that investors work with a reliable, responsible offshore investment firm to ensure the process is handled legally and correctly. Some of the many advantages of QROPs include the following:
- QROPs allow investors to consolidate their pension accounts. Rather than hassle with managing several accounts, pension-holders can handle one QROP instead.
- QROPs allow pension-holders to choose exactly how much they receive from their accounts and when they receive it. This flexibility is extremely helpful to most people.
- If you have a QROP, your assets may not be vulnerable to estate taxes. This is important for investors who hope to protect their assets for their families.
- Setting up a QROP is easy!
Typical Services Provided for Offshore Investment Accounts
In many ways, having an offshore investment account is much like having any other type of bank account. Many of the same services are provided, including the following:
- Offshore banks take deposits and extend credit to customers.
- Electronic funds transfer is available for most offshore bank accounts.
- Most offshore banks provide fund management, trustee services, and investment management.
- Offshore banks usually provide letters of credit and participate in foreign exchange.
These services are not offered by all offshore banks.
More About Offshore Investment Accounts
It is estimated that about one third of the money belonging to wealthy individuals is held in offshore bank accounts. This amounted to $6 trillion in 2000. In addition, more than a quarter of the world's wealth is held in offshore investment accounts.
Offshore investment accounts are a great alternative for many people. These accounts have many of the same benefits as regular bank accounts, as well as many unique advantages.
Wondering how an offshore bank account can benefit you or if you can apply for Qualifying Recognised Overseas Pension Scheme , contact LOM.com. Our market professionals can answer any of your questions related to your offshore bank account.View all articles by Amy Nutt
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