What is an Offshore Bank Account?

An offshore bank is a bank that is located outside the country that the depositor resides in. The term was originally used for deposits made by UK residents into the Channel Islands as the funds deposited there were offshore and hence the name offshore banking.   Offshore banking is, at its simplest, the provision of financial services by banks  to non-residents.

Advantages of Offshore Banking and Bank Accounts

One of the biggest advantages of offshore banking is the potential tax benefits you will get on your savings. Interest is normally paid gross of tax meaning you can benefit from your individual circumstances. You may be interested in taking advantage of potential financial planning opportunities that working or living outside of your normal country brings.If you are liable to pay tax elsewhere it is your responsibility to notify your offshore bank account details to the relevant authorities.Sometimes offshore banks can operate with lower costs due to less government regulation allowing the payment of higher interest. If you are resident and domiciled in the United Kingdom you have to declare all  your worldwide income to HMRC and it is probable that you will have to pay tax on the interest you receive from offshore bank accounts failure to declare the income will result in financial penalties.

Main Centres for Offshore Banking

In Europe the main areas for offshore banking and bank accounts are Andorra, Campione, Cyprus, Gibraltar, Guernsey, Ireland, Isle of Man, Jersey, Liechtenstein, Luxembourg, Madeira, Malta, Monaco, Sark, Switzerland.   The Caribbean and South America countries that are often used for offshore banking include Antigua, Aruba, Bahamas, Barbados, Belize, Bermuda, British Virgin Islands, Cayman Islands, Costa Rica, Grenada, Montserrat, Panama, Puerto Rico, St. Kitts and Nevis, Turks and Caicos Islands.

Banks providing offshore banking and bank accounts

Bank of Scotland International provides an extensive range of financial products to specifically meet offshore banking needs by delivering long-term value, security and service.