Setting up an offshore account is one way to protect your assets from creditors and frivolous lawsuits. Establishing an offshore bank account in certain countries, such as Switzerland and the Cayman Islands, is also one of the tax strategies utilized by wealthy folks looking to avoid the heavy taxation system in the U.S. Account holders are required to obey U.S. tax laws by reporting information about the account and declaring any interest income earned on offshore assets.
Once you have completed the steps and opened the account, you will decide how to make a deposit to an overseas bank. Many banks allow cash deposits, but you must follow the guidelines provided by the foreign country. This may include explaining to the appropriate authorities when and where you acquired the money.
Declare Those Funds
When you deposit cash into an offshore bank account, you may also be required to convert the money into the host country’s currency. For example, banks in Great Britain may convert your U.S. dollars into British sterling. Track the current exchange rates to time your deposits so that they are the most lucrative.
The offshore bank may also allow you to deposit funds through electronic transfers, using SWIFT MT103. The SWIFT code identifies the specific international bank to which you’re making a transfer, and MT103 identifies the transaction as a cross border/international wire transfer. MT103’s are globally accepted as proof of payments, and include the payment details – date, amount, currency, sender, and recipient. They can be used to trace the funds from start to finish.
Keep in mind that if you plan to begin depositing cash into an offshore account, when carrying large sums of cash, assure you use an abundance of caution on the journey. Some countries with favorable terms for banking, like Panama, have high crime rates. Landing at commercial airports may mean running the risk of being intercepted by criminals who prey on those arriving with cash. Chartered flights are a safer way to go in this instance.
Take a look at this article on how to withdraw money from an offshore account to answer your questions regarding the other side of international banking. And feel free to contact our law office if you have legal questions about or need help setting up an offshore bank account.