If one were to read the normal information available through media outlets they would think anyone who uses offshore banking is a criminal. One only hears about offshore banking in the media when a criminal is apprehended. There are many legitimate reasons to bank offshore that don’t involve drugs or money laundering. This article will attempt to debunk the common misconceptions about offshore banking and help the reader gain a better understanding of the industry.

The first misconception about offshore banking is that it is very difficult and expensive to set up so only rich people need to consider it. There are cases where setting up an offshore bank account can be difficult, especially if you are not utilizing the services of a legal firm to help you with bank introductions. But if you do a little research and are able to find a firm that has experience setting up accounts in the jurisdiction where you want to bank then it is actually a fairly easy process to complete and not expensive at all. You can even get an account without visiting the country in many cases.

The second misnomer about offshore banking is that every offshore banking destination has the same features and services so it doesn’t matter which one you use. This is simply false, if you want banking secrecy and rock solid privacy protection many of the Carribbean Islands no longer offer this type of protection. Their laws say this is true but in practice they are not enforced like they should be. Panama on the other hand has a solid reputation for banking secrecy and privacy with laws that punish offenders with jail time.

Another myth associated with offshore banking is that setting up an offshore bank account is an illegal act and you are involved in tax evasion in your home country. This is not true so long as you follow the tax laws in your home country and pay what you owe prior to sending money offshore. Having an offshore bank account simply allows you to earn and invest money without paying taxes on the capital gains you earn in the offshore destination (assuming you selected wisely and your offshore banking destination has this type of tax law in place).

People that perpetuate the myth that offshore banking is for criminals only are people who only know what they read in the mainstream media. The mainstream media only reports on offshore banking when a crime is committed. Nobody reports that “John saved a bundle on his stock investing by moving some money to his offshore account in Panama where there is no capital gains tax or tax on foreign derived income”.

The government’s of the world are not exactly about to advertise that you can reduce your tax burden by moving money to another country. That would weaken their economy and also their position of power. They may utilize offshore banking themselves but they will never tell you that they do. And while offshore banking, due to it’s very nature of secrecy and privacy, will attract some criminals this does not mean that offshore banking is only for criminals.

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