Criminals using offshore businesses as a method of money laundering have given a perfectly legal investment opportunity a bad name. Jurisdictions such as the Bahamas, Belize, Cook Islands, Nevis, and Panama have felt the pressure by the United States and countries in the European Union.
Several years ago it was possible to open an offshore bank account with only corporate documents and a company nominee’s signature. The real owner’s name was not required.
Criminals found this benefit irresistible and misused this confidentiality to hide illegal activities and money gained from those activities.
Thankfully, this criminal behavior has been put in check. Offshore companies can no longer be used to hide assets, finance illegal activities, or launder money. Any attempts to do so will be caught and stopped, as businesses are now required to provide verifiable proof of the company and the account holder.
In cutting off illegal activity, however, governments have made it impossible to hide electronic money transactions, such as bank or credit card transfers.
Investors still turn to offshore business formation for anonymity. This is helpful in cases where privacy is a must. With standard banks, just about anyone can access your bank information and wreak havoc on your personal and financial information.
Hackers aren’t your only concern. In cases of legal problems, onshore banks are required to release your financial information to those who request it. Lawyers, private investigators, and government agencies have complete access to your assets.
Investors also choose offshore businesses in order to reduce taxes or in cases to have creditor protection in special circumstances.
Sometimes, though, people choose to form an offshore business because they want freedom. If the home country’s spending is out of control and taxes are unbearably high, hardworking businessmen may chose to form an offshore business to achieve more profits in a low-tax or no-tax jurisdiction.
Regardless of your reasons for considering an offshore business, be assured that it is not illegal. You have your rights and you should take advantage of the benefits that are available to you.