Do you ever bother to know how to send money to Bangladesh? In this article we will throw light on why having an offshore account is important for an expatriate.
We will take a look at different aspects of having an offshore account along with its types, merits, demerits and the opening requirements of offshore accounts.
Offshore account:- An offshore account is held outside holder’s country of origin or residence. This service is offered by many banks and these accounts operate similar to the normal and standard bank accounts.
A myth debunked:- There is a common belief that an offshore account is held by the mega-rich to serve the purpose of money laundering and to avoid taxes. It is only a myth despite the misuse of offshore accounts by people around the world. The fact is that an offshore account can be opened by anyone working abroad, and he is a frequent traveller and transfers money to different countries.
Offshore account types:- The most common type is the savings account available as a variable of fixed-rate accounts.
Variable-rate account:- With this type of offshore account, you have easy and normal access to your funds.
Fixed-rate account:- With a fixed-rate offshore account, you cannot access funds for a stipulated period which typically ranges between 1 to 5 years. But, these periods can vary from bank to bank.
Let’s now see the reasons for opening an offshore bank account.
Multi-currency dealing:- An offshore account enables the account holder’s money transfer to Bangladesh or another country in different currencies.
Fixed rates:- Foreign currency exchange rates keep fluctuating, but with an offshore account, the holder can fix a currency price in advance, which removes uncertainty.
Multi-currency under one roof:- An offshore account allows the account holder to deal in different currencies under one roof and on one window. Normally, banks restrict dealing in different currencies to one or two currencies at best and people approach different channels to deal in more currencies. With an offshore account, this fatigue can be avoided.
Security:- An offshore account is safe and secure and will not be affected by domestic problems.
Easy account opening:- For the relocation to a foreign land later in your life, an offshore account can be of help in opening an account well in advance of relocating. With an offshore account, you can send money to Bangladesh online into your domestic account.
Let’s now take a look at the advantages of an offshore account.
Flexible:- An offshore account makes it easy to deal with international financing by offering more flexibility than by domestic arrangements.
Tax benefits:- With an offshore account, you typically get higher interest rates and the holder must pay low taxes.
Diversified investment:- An offshore account enables the holder to invest in diversified opportunities available in different countries in their respective currencies directly.
Enhanced privacy:- An offshore account is more securer than a domestic account since leaking of its information is almost impossible. Some banks even offer anonymous offshore bank accounts.
Let’s now take a look at some of the disadvantages that come with offshore bank accounts.
Deposit huge sums:- Most of the offshore accounts require huge amounts as initial deposits and also to maintain a minimum amount to avoid paying different charges.
Cost-ineffective:- Normally, offshore accounts charge higher maintenance and transaction charges than domestic banks. It is admissible to check the full list of charges before opening an offshore account.
Low protection of funds:- Despite the fact that offshore accounts offer enhanced privacy, funds are not protected by guarantee schemes. Different countries, however, offer separate offshore account protection schemes. But, there is no uniform protection policy of funds in offshore accounts.
Let’s now take a brief look at the requirements to open an offshore account.
There is not much difference in requirements to open an offshore account than a domestic account.
Here is how.
- You will provide your full name, date of birth and full address;
- Provide passport or valid photo ID;
- Proof of address; and
- Income proof.
According to some new offshore banking regulations, an offshore bank may request additional information to avoid fraud. This additional information can consist of:
- Account statements and references from your existing bank;
- Details of your day-to-day financial transactions;
- Information relating to the type of account you wish to open such as information about your investments if you wish to open a savings offshore account;
- Complete information about your business if you want to open an offshore business account.
Although these requirements mostly remain the same, different banks can request more information.
Conclusion:- This article is our complete guide to help us understand an offshore account and its importance for an expatriate living anywhere in the world. Although people prefer online money transfer to Bangladesh through reputable and credible online money transfer companies such as ACE, the importance and necessity of having an offshore bank account cannot be overemphasized.