History of Offshore Banking
How did offshore banking come about? We all know that both Britons and Europeans (often more so) have always been subject to heavy taxation in all areas of life and commerce. It is the sad fact that the government, in the form of the Inland Revenue, reaps the benefits of individual’s and family’s hard earned assets and wealth through high taxation. It is the same with the appropriate authorities throughout Europe. The affluent were ready for a solution to help in this endeavour. The solution came in the form of small fragments of land off shore of the North West Coast of France: the Channel Islands. These island nations provided dejected investors and individuals respite from diminishing wealth through two key offerings: confidentiality and lower taxation.
The Channel Islands bankers persuaded European clients that any deposits placed into its offshore banks would be anonymous, free from the scrutiny plaguing the mainland and the UK, and from minimal taxation. As word spread through the affluent communities of Europe, the Channel Islands became the premier European Offshore Banking location. What happened next was a ‘snowball’ effect. Other very small ‘offshore jurisdictions’ saw what was happening and the revenue flowing into these small islands and quickly followed suit. Banking institutions were revamped to address the need for sound, secure financial regulation and banking practices were augmented dramatically to cater to this demand. The updating and refining of the rules placed great confidence in these offshore jurisdictions and foreign capital was attracted in its tens of thousands. The birth of the offshore bank had occurred.
Very soon the expression ‘Offshore Banking’ was used to describe small tax havens and offshore financial centres which provided strong, secure and anonymous banking with the back-up of sound regulatory financial practices. From its inception in Europe, offshore banking soon spread to the rest of the world and investors from further a field came to take advantage of these tax havens. These offshore banks were situated within politically stable and economically sound locations, unlike some of the South American and African countries, which provided security for deposits as well as strong asset protection vehicles.
From the province of the affluent, offshore banking institutions have become increasingly accessible to any individual concerned about making the maximum return upon investment. As they have become more visible, however, offshore banks have also been portrayed, unfairly, as locations for money laundering and for storing the proceeds of criminal and terrorist activity. Intelligent investors have long been aware that these prejudices could not be further from the truth. This tabloid perception is, thankfully, being readdressed through education and the wealth of knowledge available on the internet today. More and more people are turning to the offshore bank account to safeguard and grow their wealth plus enhance their financial privacy. They understand that offshore banks can be remarkably effective offshore havens for assets and funds in need of safeguarding from the perils of any civil, economic, or political turmoil in their home countries. Offshore financial centres continue to deliver lower taxation, confidentiality, security and effective asset protection currently and will continue to do so for certainly the foreseeable future.
Discerning investors benefit hugely from the safe, private and low tax environments that an Offshore Bank Account offers and with offshore bank account setups becoming more accessible for individuals, people are able to take advantage of offshore bank accounts and security they offer for asset protection. Whilst it is essential to understand your banking and financial goals and discuss these with a competent, experienced offshore services agent before plunging into foreign territory (literally!), there are many undeniable benefits in establishing an Offshore Account. These Offshore Financial Centres and tax havens have established and maintained a solid reputation for providing a highly effective offshore banking location which delivers: protection from liability; strong asset protection; less taxation; and confidentiality of ownership and deposits.