How to Choose an Offshore Bank that Won't Lose your Money

As the pandemic hits the banking sector, many banks around the world are going belly up - both domestic and offshore. Many banks are at the mercy of government bailouts, clinging to federal assistance to stay in operation. In this unprecedented economical and political climate, investors ranging from corporations to individuals are looking for ways to keep their money safe.

For years, people interesting in sheltering or diversifying assets have turned to offshore banking. Offshore banking is still a highly viable option, but investors must be careful in choosing the right offshore bank right now.

In this article, we’ll discuss ways to choose an offshore bank that’s strong and won’t lose your money during the pandemic and beyond.

1. Choosing a Stable Jurisdiction

One of the first steps to choosing a fundamentally sound offshore bank is to make sure you’re shopping in a stable jurisdiction. Finding a stable jurisdiction means finding an area that’s economically and politically stable.

When economic or political problems are present, there are going to be more problems with the banking sector. Consider the damage done by the COVID-19 pandemic or the protests in Hong Kong. It’s always better to choose an offshore bank in a stable jurisdiction.

2. Identifying Jurisdiction Regulations

Once you’ve found a jurisdiction that’s politically and economically sound, then it’s important to take a look at the offshore banking regulations put in place by the jurisdiction. You’ll have to be sure that these regulations align with your needs.

There are several things to consider. For instance, are you looking for privacy or anonymity in your offshore bank? Are you looking to reduce your tax liability? Regulations such as AEoI/CRS mean that banks are required to report your banking information to your home government. If you want complete privacy, you want to bank in a jurisdiction without AEoI/CRS.

Keeping regulations in mind can help you find a trustworthy offshore bank that will suit your needs.

3. Choosing a Reputable Bank

Once you’ve found the right jurisdiction for your needs, the next step is digging in and finding the right bank. The first step is to look for a bank that’s reputable. The forefront offshore banks are going to keep your funds safer, lessening the chance that your money is going to get lost or seized.

There are a few ways to go about finding a reputable offshore bank. For starters, talk to people. If you have an investment manager, talk to them. If you know people who are involved in offshore banking, ask them for advice on finding a reputable bank. The next thing to do is easy: get online and do a bit of research. Read reviews and articles centered around offshore banks you’re interested in. The banks with the highest feedback will usually be your best bet.

4. Leveraging Full-Reserve Banking

Most banks around the world only keep part of your investments on-hand; the rest is used for loans. There are some banks, however, who keep all of your deposits on-hand. This system is called full-reserve banking, and it’s safer than typical banking system.

When you choose an offshore bank, keep in mind that a full-reserve bank equates to stability. One example - our partner bank in Puerto Rico adopts full-reserve banking, which gives depositors peace in mind in knowing they can withdraw their funds at any time.

5. Finding Trading and Investment Opportunities

When looking for a solid offshore bank, we recommend looking for a bank that offers trading and investment opportunities. Some offshore bank feature access to trading products, such as equities, EFCs and EFTs, forex, and bond opportunities around the world. In addition, investment opportunities such as physical precious metals can be found with some offshore banks.

Altogether, a diverse array of trading and investment opportunities can lend to the strength of an offshore bank. If you are interested in investing globally, this can be an all around win-win situation for you.

Takeaway

Keeping your assets safe is always important, but there’s extra pressure to do so now because of the coronavirus pandemic and the unrest going on in places around the world. Offshore banking is still an exceptional way to diversify your assets, strengthen your portfolio, and keep your finances safe, even during these uncertain times. Now, perhaps more than ever, you’ve got to be careful when choosing an offshore bank.

With mounting pressure on offshore jurisdictions, it’s important to make prudent decisions when choosing an offshore bank. This all starts with finding the ideal jurisdiction for your needs and choosing a bank that is reputable and offers everything you need.