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The pros and cons of making an offshore banking investment

Before becoming involved with an offshore banking investment, it is recommended you take the time to educate yourself about the nature of offshore banking such as what it involves and potential pitfalls and benefits. Offshore bank accounts have long received bad press as being the type of account a good-for-nothing gangster stashes his gains in to in an attempt to evade any number of taxes. However, this is a rather unfair picture and does not accurately portray the spirit of offshore banking in the slightest.

Most countries operating offshore bank accounts are known as tax havens. This means the person who owns the account may get to enjoy either reduced taxes or no taxes on his investment interest. This is not code for tax evasion, in fact it is a perfectly legitimate practice that anyone who has the money to make an offshore banking investment can enjoy. Another benefit of offshore accounts is the privacy they promise. If protecting your assets is important to you than you will be hard pushed to find an account more private than an offshore one. While they are not above the law, their banking privacy laws are much tighter and more in favour of the investor than the United Kingdom. Although confidentiality is guaranteed, this is only in the cases of genuine investors. If a bank were to suspect foul play such as money laundering or drug trafficking, they will turn all details in to the relevant authorities.

One of the major disadvantages of making an offshore banking investment is the costs involved. While you can open an offshore account with as little as £3,500, there are legal fees as well as administration and management fees to add to this, which can all add up. Some offshore banks know their facilities are in high demand and will put the prices of their services up to gain a larger profit. Some lesser known countries offering offshore accounts do not have completely secure facilities, making them the target of identity thieves and flat-out robbers. It is important before making an offshore banking investment that you seek suitable legal advice to ensure your account and assets are safe, secure and above all insured.

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