How offshore bank account can help you avoid pay taxes

First, you will have to choose one of many tax havens, where your assets will be located. There are 60-70 tax haven jurisdictions around the world. Each has its pros and cons.

Second, you will want to create a new legal entity. That means a new corporation, trust or another legal entity to disguise the true name behind you offshore money.

For an extra layer of secrecy, you will want to pay front end person called nominee to serve on paper as the entity’s director, so there is no your name on papers.

Next you will want to open an offshore bank account. Your new legal entity, which is a company or trust or another type, needs a bank account.

At this stage bank may ask you about the source of income money to avoid registering bank account for money launderers. You might want to open bank account in different offshore locale, than where your new legal entity is registered. This will give you another layer of secrecy.

Now, when you have your new legal entity and an offshore bank account registered, you will move funds offshore.

Note that registering an offshore company or bank account isn’t illegal, but some people use it to skirt the law.

When you have your assets moved abroad, you can invest money into bonds, stocks, real estate, mutual funds… For people who don’t want to declare investment income, as required by law, this is where offshore company an bank account works for you.

You gain your income by investments, but the profits are made and located abroad, so out of sight of the taxman.

If you must declare offshore income to the taxman or not, it really depends on where you live. In most cases you have to report income gained abroad, otherwise this is considered tax evasion and you could face possible jail time.

However, tax evasion is not the only reason to hold an offshore bank account. There are plenty of legitimate reasons do have one.

First there is tax treatment. In many jurisdictions you can earn tax free money. So with putting money into offshore jurisdiction you can technically earn money with capital gains and pay no taxes to that country.

There are exceptions even in the US, where states like Nevada and South Dakota now hold a large amount of money from abroad.

Having money in an offshore bank account gives you peace of mind, because tax haven jurisdictions are in most cases political and economical stable.

If you have your money in an offshore bank account, your government can’t seize it for whatever reason. It also protects you from collapsing economy of your home country, civil war and other unpleasant situations.

Offshore bank accounts also give account holders more opportunities to invest abroad and serve as a protection against your home country currency collapse.

Note that with an offshore bank account your are not of the hook for U.S. taxes. The IRS requires that you file IRS form known as the FBAR. You have to report any money exceeding $10k that is held in foreign accounts.

You can avoid that by buying gold and store it abroad. If you buy physical gold you don’t have to report it. That way you invest (in gold) and have your assets safely hidden.

It is not illegal if you open an offshore bank account, unless you do it with the intent of tax evasion.

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