The Risks of Banking Offshore

The Risks of Banking Offshore
If you are looking for a way to keep your money safe, keep
your transactions private and lower your tax burden, you
may be considering opening an offshore bank account. An
offshore bank account can be a good idea for some people,
but there are some things you should know before you set up
your account.

Unlike what you see in the movie's, offshore bank accounts
are not illegal on their own. If, however, you set up an
offshore bank account for an illegal reason, like tax
evasion or money laundering, you could still be in a lot of
legal hot water if you get caught. Even if your offshore
bank account was set up for illegal purposes, your money
could still be protected, depending on the laws of the
country where you have an offshore bank account.

For all of the benefits in having an offshore bank account,
there are some risks involved. If you keep you money in a
U.S. based bank account, your account is protected by the
FDIC. Offshore banks offer no such guarantees. If your
offshore bank account is in a country that is hit by a
natural disaster, strife or civil war, your money could
vanish and you would have no recourse to recover your money.

Even though you don't have to be a millionaire to have an
offshore bank account, you should have enough cash to
deposit to make your time and trouble worthwhile. There is
no one minimum amount for an offshore bank account.
Different banks have different rules, but if you want to
get the most out of your account, plan on depositing at
least $10,000.

The Internet has made managing your offshore bank account
easier than ever, but even with secure websites and
excellent security, it is still possible for someone to
hack into your system or to gather your personal
information through a phishing scam.

If your account information is compromised, you could lose
your entire investment and there would be little you could
do to get your money back. To minimize this risk, never
access your account with a wireless connection, especially
in a public place. Stick to accessing your account at home
with a protected wired network. Never respond to an email
from your bank asking for your password or other account
information. Reputable banks will never ask for account
information in an email.

If you have decided that an offshore bank account is for
you, do your research and select a location with laws that
are the most favorable for your situation. You can move
your money fro country to country, but each time you move
your money, you take a risk that you account information
will be compromised and your money will be lost.

An offshore bank account provides many benefits, but before
you open your account, you should carefully weight the
benefits versus the costs and risks involved. If you decide
to open an account take steps to protect yourself to
minimize the risk.

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For more information about offshore banking and asset
protection in Panama please visit:
http://www.offshorelegal.org/