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There are many reasons to invest in offshore money market accounts. Most of these accounts are completely legal. While the term “Swiss bank account” often conjures images of exotic dealings and criminal masterminds, there are plenty of reasons why you may want to open an offshore bank account that are well within the confines of the law. Some reasons people make this decision include tax purposes and liability issues.

Instructions

Step 1
Consider why you are opening an offshore bank account. There are good reasons, and there are bad reasons to open an offshore account. Most of these reasons can be identified by their legality. If you are getting involved with tax evasion, insider trading, drug trafficking, or organized crime, you should know that many nations have treaties with the U.S. that compel them to reveal your account information. But if you are looking to reduce your tax liability for offshore investments or protect your from liability from divorces, inheritance disputes and bankruptcy, opening an offshore account may be highly advantageous for you.

Step 2
Research jurisdictions. Different countries have different laws and treaties when it comes to offshore accounts. Depending on what type of investment you are looking to make, certain nations may serve you better. For example, Swiss accounts are known for their secrecy while Cayman Islands accounts are ideal for corporations. Singapore accounts are notable for their access to the Chinese markets. Look into each nation and consider your situation before opening an account.

Step 3
Choose an institution. Once you choose a jurisdiction, you will have to choose between banking institutions. Because you’ll be dealing internationally (and in a rather gray area of the law), you’ll want to make sure you use the most trusted and reputable institution. You’ll also want to find a bank that has a presence in your home country for easiest access to your money.

Step 4
Contact a representative or consulate. When opening an account, you can usually get in touch with a representative based in your home country. Ensure that this person is credentialed and legitimate (avoid being scammed), and they will facilitate the account setup process. Alternately, you can travel directly to the country. Going to the country itself is not usually required, but is advisable when depositing large sums of money.

Step 5
Stay compliant at home. While the rules vary by country, you are required to disclose some information about your offshore account to the Internal Revenue Service. Also, when cashing out your foreign investments, you may need to pay capital gains taxes when converting currencies. Make sure you are aware of all the steps you need to take to avoid attracting undue attention.

Tips & Warnings
Money orders are the best way to make deposits in regards to privacy. Bank drafts and money wires work, too, but these involve a bit more red tape. Get advice from several different institutions before making a decision. You may also want to consult your own personal financial adviser as well. An offshore account is a good solution for expatriates and those traveling abroad.

Investing offshore is only worthwhile if you are depositing a larger sum of money. Fees, taxes and other costs can quickly negate any benefits of your offshore account if you don’t have enough money in play. Beware of con artists! With lack of face-to-face contact, paper trails and oversight, the realm of offshore investing is rife with fraud.

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