What Is Expat Offshore Banking? Should You Get An Expat Bank Account?
Expatriates live and work all over the world in different countries. They do not only have to get accustomed to different cultures and food, but also managing money in different currencies.
Many international banks offer expat offshore bank accounts with a centralized, economically stable location that makes life easier for expats.
What is expat offshore banking?Expat offshore banking aims to give expats who travel widely for their work a range of solutions to help them manage and stay in control of their finances.
Expats offshore accounts are ideal for people who are on the move and live in different countries, make regular international payments or have multiple accounts in different currencies.
As an expatriate, your work or profession takes you to different parts of the world. Without a proper financial plan, you might end up with money scattered across the continent and with financial obligations both at home and abroad. Expat banking can help you manage your money in a central location and help you understand and meet your tax obligations abroad and at home.
Is having an expat offshore bank account legal?Offshore relates to jurisdiction other that the one the account holder is a citizen. There is nothing illegal about having an expat offshore bank account. In fact, the terms of international bank accounts and offshore bank accounts are interchangeable.
There is a commonly held misconception that offshore banking relates to immoral or illegal activity and is often seen as a way for the rich to hide their wealth and evade tax obligations in their home country.
But this could not be further from the truth. Putting money in offshore accounts doesn’t eliminate the responsibility to pay tax. It’s due to such unpleasant connotations that some institutions use international accounts to describe offshore accounts.
What is the difference between expat offshore banking and onshore or local banking?Expat offshore banking is a banking solution offered by international banks to mobile expats in a foreign jurisdiction other than the one the account holder resides.
It helps expats to manage their money in different currencies eliminating the need to open a different bank account for each country they work in. Expat offshore accounts can help you retain one central account when working abroad.
On the other hand, onshore or local banking relates to accounts operated under rules and regulations governing the banking institution in that country. A Local bank offers different accounts in the local currency to customers in the country where the bank is registered.
You will need an expat offshore account if;
Why do I need an expat offshore bank account?
- You are an expatriate who travel widely for work
- You make international payments regularly
- You live abroad
- You have accounts in different currencies
- You need a central economical location for your money
- You have plans to retire abroad
Contrary to popular beliefs, you don’t need to be wealthy to open an offshore account. The modern offshore banking sector offers a variety of offshore accounts that are easy to operate and manage.
Do I need to be very wealthy to open an offshore savings account?
You don’t have to be a millionaire to operate an offshore savings account. Some banks offer currency instant savings accounts with no minimum balance. You can save in your choice of currency, get travel and investment advice overseas and access your money instantly for as low as $5 or equivalent monthly fee.
What are the Benefits of expat banking?
Secure central location for funds
Expat banking offers an opportunity to keep all your money in a secure central location. When you reside in a country where the currency is volatile or the banking environment is not secure, a secure offshore account gives you peace of mind knowing your money is protected.
Having a centralized account where you manage your finances in multiple currencies helps you to grow financially and develop a stronger relationship with your bank. Your bank is able to recognize and understand your requirements and can design a service specifically for you.
Flexibility and convenience
Expats are always on the move, working in different countries around the world. Having one central account means it does not change every time one moves. Expat banking offers financial support to manage finances and meet financial goals regardless of how many times you move.
Offshore accounts are beneficial to those who are paid in one currency, and have debts and financial obligations both abroad and at home. You can maintain one account with different currencies and access your money anytime anywhere.
Potential tax efficiency
If an expat is resides in a no or low tax nation, he or she can benefit from potential tax efficiency. Many international banks that offer offshore expat accounts give financial advice to their clients on tax obligations aboard and at home.
There are more advantages than disadvantages for expat offshore banking. However, managing offshore accounts is a personal choice which differs from one person to another.
Are there any disadvantages of expat offshore banking?
Unstable offshore havens, misconception of offshore banking and lack of enough information on rules and regulations governing offshore banking are some of the disadvantages cited by expats.
Additionally, it can be more difficult to solve issues arising from offshore banking than in onshore banking. That being said, each individual expatriate should make his/her own choice on the best way to manage their financial affairs.
Different financial institutions offer different banks accounts to expats. Some of the common expats accounts across international banks include;
Types of bank accounts available to expats
Multi-currency accounts are available in US dollars, Sterling and Euro. It can be linked to debit and credit cards making expats international lifestyle easy and manageable.
Currency instant access saving account
For international daily transactions that are flexible and convenient. Some banks offer currency saving account that has no minimum balance and the monthly fee is only $5 or its equivalent.
Fixed term deposit account
You can deposit your money in a fixed deposit account for a term of between 1-12 months and earn interest depending with the term and the bank you go for. The minimum balance for some banks is $10,000 or its equivalent.
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