Switzerland, Panama and the Cayman Islands are popular locations for establishing an offshore bank account. One of the primary reasons for starting an offshore account is to escape taxation, and to keep your assets safe. Even though an offshore account is maintained in a foreign country, you're still required to report information about your account to the Internal Revenue Service, including any interest income gained.
Making a Deposit in an Offshore Account
Deposit cash into your offshore account. Most offshore banks allow you to physically deposit cash into your offshore bank account, as long as you declare the funds when entering the country. When bringing cash into your offshore banking country, be prepared to explain how and where you got the money. Depending on your offshore bank, your funds may need to be converted to the appropriate currency for deposit in your account. For example, if you maintain an eSaver account at an offshore bank like Alliance & Leicester International Ltd., your deposits must be converted into sterling, which is British currency.
Transfer sterling payments or other currencies like the U.S. dollar electronically. You can deposit funds into your account using SWIFT MT103. A SWIFT code identifies the international bank where your funds will be deposited. An MT103 is an international wire transfer. The SWIFT code may vary depending on the type of currency you're depositing in your offshore account.
Include the applicable sort code. The sort code you use may be determined by the currency you're depositing. For example, with Alliance & Leicester International Ltd., your sort code is 40-19-38 when depositing sterling. If you're depositing euros into your offshore account, your sort code is 40-05-15. Indicate your name and account number on the transfer. This is accompanied by the International Bank Account Number and any associated routing numbers.
Execute a global transfer. Banks such as HSBC allow customers to globally send funds to offshore banks inside as well as outside their network. Global transfers may be executed by automated phone call or online banking. In most cases, your funds will appear on the same day as the transfer, if you transfer funds between participating banks in eligible countries like the U.K. or Hong Kong. Transferring funds to an offshore account in a different country outside of the network may take up to three business days.
Some offshore banks don't accept cash or checks as a way to deposit funds into your account.
Physically depositing cash into your offshore account may cause more harm than good. This is particularly true if you're doing offshore banking in a country with a high crime rate. If you're depositing significant sums of money, you may want to consider chartering a plane as opposed to flying your money on a commercial flight. Thieves and a myriad of unsavory characters may be lurking about at airports of popular offshore banking countries such as Panama.
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