Offshore Internet Banking – Is It A Risky Business?
Is offshore Internet banking a risky business? Is this practice illegal? The answer is that banking with offshore institutions can be risky and may be illegal, but this practice can also be done legally and in a safe manner as well. Offshore savings accounts have gained a reputation as an illegal haven from taxes for Americans and Europeans, but this is not always the case. Another view is that offshore Internet banking is very risky, and this may or may not be true, depending on a number of factors. Some foreign banks will report account information to the tax authority of the USA or Europe, while others protect account holder secrecy.
Recent legal cases have shown that even the best offshore banks may turn over secret account information, and if the offshore accounts are used for illegal purposes or criminal activities then there is a big risk of being caught and facing criminal penalties. Offshore Internet banking is used by criminals to launder money and hide assets, but if the account assets and activity are legitimate and the income is reported then there is nothing illegal about these transactions and accounts. Almost every country allows citizens to open online bank account in other countries, as long as any taxable income is reported and no laws are broken.
The risks involved in offshore Internet banking will depend on the bank and global area chosen. Some offshore banks have a solid reputation and an extensive business history, and these are located in stable areas of the world. Other offshore banks may offer many perks and features, such as fixed rate savings accounts with high interest rates, but may be relatively new in the industry or located in countries with an unstable political climate or repressive government. The risks involved may be different in each case, and should be evaluated thoroughly before making any banking decision.