While it’s currently unknown what the true overall impact will be, the COVID-19 pandemic has already made a huge dent in the global economy. The Dow Jones has seen its largest daily fall of 3,000 points, a statistic that underscored a trend of investors restructuring in the time of the pandemic.
As it stands, government resources are pushed thin as they continue their combat against the pandemic and work to assure that medications, ventilators, and personal protective gear are available to all of those who need it. As businesses have shuttered their doors in response to stay-at-home orders, economies are suffering greatly.
Capital Flight is Inevitable - for Good and Bad Reasons
Investors everywhere are looking for ways to cushion their investments and holdings in this unprecedented time. Unfortunately, scam artists are also doing the same. Criminals are taking advantage of this time in big ways.
For instance, in the EU, countries have seen where money laundering trends are being linked to the pandemic. Europol has conducted an analysis that has found an uptick in cybercrime, the trade of counterfeit products, and fraud. In the U.S., the Financial Crimes Enforcement Network (FinCEN) has warned people about financial crime during the COVID-19 pandemic such as investment scams, insider trading, and product scams. Financial institutions everywhere have been advised to watch out for money laundering tactics including shell companies and offshore bank accounts.
Offshore bank accounts always seem to get a bad reputation, but that’s only because they are a tool that can be used for bad. If someone is looking to launder money or evade taxes, then offshore banking is an obvious choice. Subsequently, they are also subject to the consequences of their actions.
If you are legitimately looking for a way to protect your assets during the COVID-19 pandemic, then you can absolutely use offshore banking to your advantage. Offshore banking is not bad, nor is it illegal. It’s a long standing strategy for asset preservation and diversification that’s available to you even in the time of pandemic. This strategy could potentially help you save on taxes, but it’s critical to note that tax evasion comes with harsh consequences. For that reason, offshore banking should be seen as more of an offshore asset protection strategy versus a way to get out of taxes.
In fact, your offshore holdings are likely going to be required as part of your reporting each year. While you can protect your assets right now by opening an offshore banking account, it’s important to remember that you must stay compliant. If you live in the U.S., that means that you’ve got to comply with FinCEN by reporting foreign holdings of over $10,000 with Form 114/FBAR, as well as reporting any foreign income via FATCA.
With that in mind, setting up an offshore banking account is typically a very easy thing to do. In many cases, you can open an offshore bank account with as little as $300. Thanks to online banking, you can open an offshore bank account from the comfort of home. Around the clock banking access makes the deal even sweeter, especially during the time of the pandemic.
Offshore Banking: Pandemic-proof Asset Protection Solution
Offshore banking presents a remarkable opportunity for diversifying your assets and protecting them not only during the coronavirus pandemic but also beyond this time. Now is a great time to start with an offshore banking account if you’ve never done so, as you only stand to gain. With the economic instability we’re seeing right now, and with the uncertainties that loom in the days, weeks, and months ahead, there’s no time like the present to diversify your assets with offshore banking.
In unstable times, there will always be people who capitalize in negative ways. For instance, with money laundering and scams on the rise, you’ve got to remain vigilant. Be wary of offers that seem too good to be true. At the same time, you’ve got to be sure that you are remaining compliant with the various regulations deemed necessary by your local jurisdiction. For example, tax requirements for your home country will include your offshore accounts, in most cases, and a failure to report those accounts accurately could lead to some very unfortunate penalties and fines. In some cases, further legal action can be taken.
If you are a well-intended offshore banker, as most investors are indeed, then you’ve got nothing to worry about. The most important things to remember are to choose reputable, solid jurisdictions and to ensure that you remain in compliance with tax requirements put in place by your home jurisdiction.
APR
2020
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