Future Developments in Offshore Banking

Many geographical and political reasons driving the increasing popularity of offshore banking in other regions of the world pertain as well to those living in the United States. An ever increasing population, demanding continually improving living standards, places an undue burden on our financial system. This creates an ongoing need to increase taxes in order to support the costs of developing new infrastructure. Offshore banking provides companies and individuals the opportunity to invest their assets in a location where they will continue to grow without being subject to excessive taxation.

Individuals utilizing offshore bank accountsinclude high net worth individuals such as: Businessmen and entrepreneurs, entertainers, authors, sports celebrities, inventors, engineers, medical practitioners, emigrants and expatriates seeking to deposit funds in a location where they will be easily accessible, without limitation on how those funds are used.

Corporations are forming offshore bank accounts in numbers that increase exponentially each year, and are expected to continue to do so well into the future.

In 2000, 80,000 offshore companies were incorporated in the Caribbean alone, with an estimated worldwide total of over 900,000 incorporated offshore companies. It is also estimated that the number of offshore incorporated companiesincreases by 150,000 each year.

Other factors leading to the increased number of offshore corporations include ongoing political and economical instability, government trade deregulation and the lifting of trade barriers, and the general trend towards globalization of commerce driven largely by the Internet.

Offshore bank accounts offer corporations the ability to greatly reduce banking costs and increase revenues by investing in opportunities not otherwise available to American markets, even though many are managed by American companies. Minimal tax exposure increases profits, and the ability to accept a wide variety of currencies facilitates easier trade relationships.

The ability to develop a multi-national corporation is enhanced by the financial security offered by offshore banking. Since most commerce is market driven, maintaining a financial base in a low-tax or tax-free safe haven offers companies a competitive advantage in the global marketplace.

In addition to establishing offshore bank accounts, many companies are now electing to establish a physical presence as well in the form of regional headquarters, manufacturing and assembly plants, administration centers, and distribution centers. Foreign territories continue to offer incentives to lure businesses and their money into their countries.

Many developing nations or under developed nations have discovered the benefits of attracting offshore businesses. In addition to the influx of currency into the country, the establishment of offshore corporations and offshore bank accounts creates a variety of new employment opportunities and significantly increases the standard of living for those individuals. This has led many countries to significantly slash both personal and corporate income tax rates in hopes of enticing new businesses.

As the popularity of offshore incorporation and banking increases, so does the competition among those providing services. Future offshore users will be expecting a level of service and security comparable to that found in the United States, yet at a significantly reduced cost. The attractiveness of bringing corporations into the international marketplace will ensure the continued rise in these standards.

About the Author

Steve Holder is a writer for LOM Offshore Financial Services . For more information related to offshore investing, please visit www.lom.com