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Offshore bank accounts are mostly used by spies and criminals -- It would be silly to say that this does not happen, but the reality is that most of the funds kept offshore are deposited by fortune 500 companies shielding their asset base as part of their risk management strategy. I personally know a TV personality that every person reading this knows, and He banks in Panama among other countries to reduce his risk and protect his assets. Offshore banking is too complicated for the average Joe -- This is actually true if the average Joe were to do all the legal work himself. Typically an offshore bank account is created in conjunction with an offshore corporation due to many governments taxing worldwide income of individuals. This sounds complicated but a good lawyer will have the entire package done in less than a week. Its not worth going offshore unless you are wealthy -- Since it costs less than $2000 USD for an offshore bank account and a bearer share corporation with all the trimmings, offshore banking is within most people's reach. It is a very strong vehicle to protect your assets from lawsuits. Every business owner should have an offshore bank account and offshore company. In today's lawsuit happy world this is just good business practice. Because of 9/11 bank secrecy has been eroded severely -- It is true that the MLAT treaty has been adopted all the offshore jurisdictions pretty much, BUT what most people don't understand is that this treaty only allows for co-operation in crimes. The issue under investigation must be a crime in both countries and the requesting country must produce evidence that they have a strong case against you. Also the activity must be a crime in in BOTH countries. Tax evasion is not a crime in Panama for example, and as such the Panama government would not co-operate with an MLAT requests under those circumstances. You must visit the offshore jurisdiction to open a bank account -- This is the case with some Swiss banks. Without an introduction in some offshore jurisdictions you can't get a bank account. Many banks in Panama work in this way. Fortunately, your offshore professional can provide the introduction necessary. Most clients don't even realize this is taking place in the background. They simply place their order and in a matter of a week or so they have an offshore corporation and bank account. Bank secrecy is useless now that all the offshore jurisdictions are in the MLAT (Mutual Legal Assistance Treaty). -- If you are a criminal there is some merit to this statement. If you are not a criminal, but just someone trying to protect your money this statement is false. For an MLAT request to be honored, it must be based on a crime in BOTH countries. If the offshore country doesn't consider the activity a crime, they will NOT comply with the request. A great example is tax evasion. This is a crime in countries like the USA and Canada but in countries like Panama for instance it is not a crime. MLAT requests for tax evasion are simply denied. Tax treaties now allow most governments to share information freely -- Sadly this is true for many countries, but it is not true of serious offshore jurisdictions like Panama. Panama has NO TAX TREATIES WITH ANYONE! The authorities will know if I use an offshore bank account -- That is simply not true. E-commerce and banking all over the internet today rely on secure online encrypted communications. The largest banks in the world use it and it is completely secure. It is impossible for anyone to see what you are doing. Companies like findnot.com can add a second layer of security for those who feel they need it. Offshore banking won't protect me in a lawsuit because the court will order that I bring the funds back. -- If you setup your asset protection plan before you get sued you are well protected. Once you donate your money to an offshore foundation, for example, they money is not legally yours to get back. The judge cannot order anything illegal. If legal proceedings are already under way and you move the funds you might be charged with fraudulent conveyance. There are ways to avoid this, but it is beyond the scope of this article. It's impossible to move money offshore without someone being able to track down where it went. -- Moving money to a secret offshore bank account is done by passing the money through a second offshore jurisdiction. For example, if the money is wired to a bank the Cayman Islands and the money is wired again from the Cayman Islands to Panama, it is impossible for anyone to know the money is in Panama. Offshore bank accounts can be used to do all the same activities as an onshore account -- This is almost true. The only exception is online bill payment. This popular feature doesn't make sense offshore and to my knowledge no offshore banks offer it. Typically, the money held offshore is not used onshore anyway. Having said that, most offshore banking clients have a bank card that allows them to withdraw funds anywhere in the world. The card only leads back to the corporation which owns the bank account (and would require breaking bank secrecy even to find that out). The corporation is usually a bearer share corporation which means that it's ownership is anonymous anyway. Americans, Canadians, and Europeans can't own an offshore account legally -- This is totally false. This mis perception is based on the fact that these jurisdictions now require an individual to report his/her worldwide income. Offshore bank accounts almost always come with a bearer share corporation or a foundation, which means the individual does not legally own the money. When the money is paid from the corporation to the individual then it becomes taxable income.
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