16. The 8 Best Reasons to open an Offshore Bank Account
Many little-known advantages speak for an overseas account for investments.
Deferred benefits that the person concerned does not know are only properly recognized and appreciated when he discovers them.
You should not leave all of your assets on the control of a single government at your place of residence.
1. Geographical Diversification of Political Risks
As you invest your assets in various asset classes (bonds, stocks, real estate, precious metals, commodities, art, car collection, gold coins, etc.) to diversify the risks of the investment, assets placed outside of the influence of your government will diversify the political risks.
Diversification with asset classes is well known to many investors. On the other hand, few investors know that you can diversify the political risks with offshore investment accounts. Avoid that a single state controls your entire fortune! Disconnect your assets from the influence of your government and courtrooms.
Opening an offshore savings account with an overseas bank is the first step to protect your assets. This is best done in a country and with a bank, where you can be certain that your fortune can not be pulverized overnight with Bail-in laws.
“Today, you do not have to ask whether your fortune abroad is sufficiently secure, but rather whether your wealth is still safe enough at home.”
2. Reduction of Legal Risks
Authorities shoot first from the hip and ask questions later.
I advised several German business people whose accounts were blocked in a tax audit. These were happy that they could handle their most urgent payments through their Swiss account. If they had not had an account in Switzerland, they would have long gone bust.
The competition is merciless today. Every businessman has to expect that he is wrongly accused by a competitor. It does not take much to get you involved as an innocent person in a criminal procedure.
Experience shows that the first step of a prosecutor is always to freeze the bank accounts. Every successful businessman is used for planning. That’s why every businessman has to expect frozen bank accounts as part of his business life. Who does not do it, is a fatalist. Having or not having an account abroad, where the authorities in the home country have nothing to say, can decide on life and death in business, regardless of whether you are guilty or not guilty.
A few years ago, the German Intelligence Service bribed a banker with LGT Bank in Liechtenstein and bought stolen account information (Known as the LGT Bank Tax Compact Disc Case). The former employee with LGT Bank received compensation of 4’600’000 EUR. What they did was illegal. Subsequently, the German government acted as a fence (stolen bank information passed on) and forwarded the illegally obtained account data to other states, such as France, UK, USA, Italy. This incident proves that no one has questioned the ethically questionable behavior of the state. When the State is involved in illegal activities, everyone just looks away.
As mentioned earlier, Bail-in legislation in the EU has been converted into domestic law since 2017. The next financial crisis will come for sure. What happened in Cyprus in 2013 will be repeated, because the framework conditions have not changed significantly since the 2008 financial crisis.
Invest part of your assets via an Offshore Bank Account in Switzerland.
“Take a part of your assets out of your country of residence before your country takes it out from you (and saves your house bank).”
Switzerland is one of the few countries (besides Liechtenstein, Luxembourg, Norway) that has a Credit Rating of AAA (Standard & Poor). Also, Switzerland has signed the Hague Convention on the recognition of trusts. Trust structures are needed for international asset protection strategies.
Switzerland has become particularly attractive in recent years. That’s why many Family Offices have moved their headquarters from London to Zurich. Since the Brexit, the Swiss financial centre is in high demand.
Once the crisis is there, it is already too late. Capital export restrictions are the result. Capital exports abroad become illegal overnight. Then it’s definitely too late to implement your asset protection strategy.
“That EU States will expropriate wealthy investors with more than EUR 100,000 on the account is as clear as the Amen in the church.”
Experience has shown that tax revenues for some countries are not even enough to offset national commitments. Unconstitutional emergency law becomes the norm. Bank accounts of wealthy clients have already been used in Poland, Hungary, Cyprus, Argentina and other countries to top up the treasuries. In 2013, Poland forced the owners of private retirement funds to invest in government-controlled investment vehicles.
Spain has taxed savings accounts. Hungary and Portugal have nationalized pension assets. If your account is located overseas, the authorities’ access to your account is much more difficult. I guarantee that you will have a reassuring effect on knowing your fortune abroad.
Aggressive lawyers, supposed creditors and frustrated partners will bite their teeth.
You protect your assets by effectively outsourcing business activities in tax-efficient countries and legally reducing the tax burden. You must do this by following the law, because draconian punishments are intended for those who make mistakes here.
Avoid banks having a physical presence in your country of residence. Credit Suisse and UBS are not ideal because they have a strong presence overseas. As a result, they can easily by a victim of extortion as the high penalties from the USA have proven. If you select a bank in Hong Kong for diversification, forget HSBC. If you already open an offshore account in China, then you should choose a real Chinese bank. If a state official of your country of residence calls, then a reply will come in Chinese. No one speaks English.
4. Diversification of Currency Risks with Multi-Currency Accounts
Offshore banking offers multicurrency accounts, allowing you to diversify currency risks. The strong Swiss franc is popular as an escape currency. When the EUR was introduced, 1 EUR cost 1.72 CHF. Today, 1 EUR costs only 1.10 CHF. To protect the Swiss export industry, the Swiss franc is purposefully devalued by the Swiss National Bank through interventions. The true value of the Swiss franc would be much higher in reality. Our private banks offer offshore accounts in up to 15 foreign currencies (multi-currency account).
The European Central Bank and the Federal Reserve have manipulated interest rates down to near historic lows. These artificially low-interest rates destroy the return on wealth, so even real inflation can’t be cushioned. Abroad, you will find banks that offer significantly higher interest rates. But you have to accept currency risks, which you can hedge through currency options. Multi-currency accounts give you access to investments with higher interest income. Swiss banks offer Lombard loans at 1% interest rate in CHF. You can pledge your portfolio to the bank as collateral and receive a loan (Lombard loan) at an interest rate of around 1% in CHF. The interest rate is very attractive because the bank has your assets as collateral.
Foreigners are allowed to purchase commercial properties in Switzerland that generate a return of between 4% and 7% in CHF. Banks grant mortgages up to 70% (LTV) of the value of the commercial property (LTV, Lending –to-Value). For this mortgage, you pay about 1% interest in CHF. This allows attractive returns with controlled risk. Consequently, real estate is ideal for the diversification of your assets.