Having an account that can complete transactions in several currencies could be very appealing to some expats.
Bags packed. Last goodbyes made. Accommodation arranged. All set. But what about your money? Each year, many expats leave their country, for work, new challenges or retirement. What they often neglect, however, is the money they are leaving behind. Money is often left in low-return savings accounts, when it could be earning more offshore.
Many reputable banks and building societies such as Skipton International offer offshore accounts based in jurisdictions such as Guernsey or Jersey. These can offer several advantages over accounts based in either your home or destination countries.
What are the advantages of going offshore?
The first advantage that springs to mind regards taxes. One way to potentially reduce tax burden is to open an offshore saving account, in a tax haven. This depends, however, on the country that you currently reside, and the country that you are depositing money. Interest rates are often very competitive in comparison to high street banks, due to variations in regulation and lower overhead costs. Some banks even offer gross interest payments, free from tax deductions. The customer is also better informed by overseas banks with regards to rate changes, and policy alterations.
Institutions who are ‘offshore’ often deliver a wide range of specialist products and services, as well as extra services to help unravel the difficulties of understanding your obligations and exemptions.
Another big advantage for expats is flexibility. Many expats move regularly or often travel due to work for months or years at a time. Bureaucracy and transaction fees mean that few open new accounts in a new country every time they move. Having a centralised offshore bank account can enable easy access, and is also useful when considering that several currencies can be associated with the offshore bank. Many expats receive a wage in one currency, live in a country that uses another currency, and also have financial obligations in a third currency. Not many cut all ties with their home country when they move and may still own a home that may be rented, or have regular debit payments.
In today’s economies, stability and security are very important. It may be advisable to ‘spread your bets.’ An account which holds Sterling, for example, is still very stable today, when compared to a developing country which lacks banking infrastructure and regulation.
Offshore accounts are no longer considered ‘underground,’ with rich or unsavoury characters using numerical Swiss bank accounts. They are now often a necessity for expats, with advantages that can help sway the decision. Beware, however. Offshore accounts are not a ‘one shoe fits all solution,’ and depend on the country, circumstances, taxation and terms and conditions which are relevant to you.
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