Offshore Accounts an Offshore Bank

Offshore Accounts

An offshore bank is one that is located outside of the country of residence of the depositor usually in a low-tax region that provides certain financial advantages to the depositor. The advantages may include the following:

• Low or no taxation

• Easy access to deposits

• Greater bank security and secrecy

• Greater political, local, or financial stability.

Some offshore banks also provide higher interest rates and are less expensive in maintaining due to decreased government intervention and lower overheads. Tax is also not deducted from interest. These facilities also offer opportunities that may not be available from conventional banks such as uncommon investment opportunities, anonymous bank accounts, and higher or lower loan rates. Finally, although not exclusively, these offshore banks may be linked to other structures such as offshore companies, trusts or foundations, which may have specific tax advantages for some individuals.

These offshore accounts are usually located on islands hence the description.

The Cayman Islands

The Cayman Islands is a British-owned territory located in the western Caribbean ocean. Its economy, fueled by tourism and its economic benefits, total 70-80% of its GDP. The Cayman Islands, in other words, profits hugely from its offshore banking services.

The Cayman Islands chose to become a British owned overseas Territory in 196s and, by so doing, relieved itself from direct tax enabling it to maintain one of the highest standards of living in the world. 40 of the world's largest banks, consequently, made their home in this region and more than 80,000 international companies registered in the Cayman Islands.

Advantages of banking in the Cayman Islands.

Some of the advantages include the following:

• No capital gains tax, corporation tax, withholding tax, property tax, payroll tax, or income tax payable by employees.

• Absence of government intervention, allowing free transfer of funds in and out of the Islands, in any currency, with equal freedom to open and maintain accounts in any currency.

• There are no reserve asset requirements.

• There is legal confidentiality of client information.

• Competitiveness in the Euro currency markets (Cayman Islands.com)

Depositors can also invest globally. There are minimal reporting requirements, and strong client confidentiality, and the Cayman Islands, being under British jurisdiction, has political and economic stability (Benefits of Cayman Offshore Banking)

Some of the Comnaonies in Cayman Islands

Famous U.S. companies located on Cayman Island include:

Deloitte (accounting)

Financial Consulting & Accounting Ltd.

Custom Accounting Solutions

Media Works

Xanadu Distributing Ltd. (Marketing)

Ford - Vampt Motors

Mercedes-Benz - Ultimate Imports Ltd.

Hi-Tech Electronics Inc.

Britannia Magazine

Alphasoft Ltd. (telecommunications)

(http://www.ecayman.com/)

Others are Coca-Cola, Oracle, and Intel that all use the Islands to avoid paying taxes

"One quarter of the 100 largest contractors with the U.S. federal government, including Altria Group Inc. And Tyco International Ltd. have had subsidiaries in the Caymans, according to a study by the Government Accountability Office." (Evans (May, 2009). Seagate is one of these companies.

Altria, Tyco, Coke and Oracle still have subsidiaries in the Caymans, as well as Santa Clara, California-based Intel Corp., which is the world's largest chipmaker.

The Future for Cayman Islands