Offshore Banking Myths

Offshore banking comes with a stigma, so many entrepreneurs and business professionals cringe at the mere mention that their money can be safely kept in an Offshore bank account. Images of fast, expensive boats, drug kingpins, and white suits come instantly to mind. This perception, of course, has not been helped by the proliferation of bad Hollywood movies, television shows, and negative portrayal in the press--they could not be further from the truth.

The fact is that offshore financial centers (OFC) or banks, also known as tax havens, exist mostly for the purpose of providing asset protection, asset growth, tax reduction, and excellent service for foreign individuals and corporations, large and small, around the world. While not as glamorous nor exotic as they are so often portrayed, offshore banking and financial centers can present real world solutions to many of the issues facing people looking for asset protection from pending lawsuits, extraordinary home tax burdens, or as a way to mitigate the ramifications of a local unstable government. To be sure, an offshore bank account can also provide asset protection from the ordinary perils of things such as divorce, poor market conditions, or extraneous litigation that is so often a marked consideration in the Western world.

Offshore Bank Accounts, Money Laundering, and Other Criminal Activity

It would be a misstatement to state that no illicit funds find their way into Offshore bank accounts--but as we will soon see, that isn’t really saying much. In reality, those jurisdictions that the average lay person would least suspect to be guilty of this or other illegal banking activities have turned out to be the major money laundering and criminal enterprise-funding centers in the world. And the United States is chief among them, with an estimate half of all of the money laundered in the world laundered within its 50 states. This half translates to a conservatively-achieved estimate of $300 billion US.

Of course, the United States is not the only high-tax, or “large” jurisdiction that is home to this activity, with other countries such as the UK and Germany sharing in this dubious distinction.

So although the haven offshore banking jurisdictions are perceived to be the ideal locale for the financing of the criminal underworld, the reality is that the high-tax jurisdictions house the vast majority of these funds, with the low-taxation havens representing a much smaller percentage overall.

These type of facts, of course, are very rarely ever reported by news and print media, or by the jurisdictions that are frankly quite embarrassed by these astonishing figures.