The term “offshore” simply relates to a jurisdiction other than the one in which the account holder resides.
You will benefit from an offshore account if you live outside your home country, frequently move between countries, or are perhaps thinking of retiring abroad. You will especially benefit from an offshore bank account if you are a resident here in the UAE.
For those living in the GCC offshore accounts can be of use if you do not wish for your savings or investments to be subject to local laws in the event of death. Offshore accounts can therefore provide peace of mind and safety. Local laws here in the UAE mean that the government has the right to freeze your bank account without notice, meaning you and or your spouse could be in a position where you have no access to any money. Sharia law prevails and thus with it the Government have ultimate power over your bank account.
If you are based in a low, or no-tax nation such as the UAE then the tax efficient element is important too. Sending your money back home is likely to have tax implications. Interest within an offshore account is generally paid without the deduction of tax, which can make matters easier for women who are not subject to tax on their worldwide income.
Most offshore banks offer accounts in numerous currencies, a service that is not usually available from the average high street bank. With this service, you can set up accounts to cover payments you need to make back in your home country, or everyday expenses in your host country, without losing any money through currency conversion fees.
Having one centralized account with one bank through which you manage all of your financial affairs can lead you to develop a stronger relationship with the bank, this can in turn bring with it a whole host of additional benefits, such as discretionary portfolio management or cheaper and easier currency conversion.
Even if you don’t consider yourself a savvy saver the least you should be doing is protecting your wealth. Stronger depositor protection can be found in offshore jurisdictions such as the Isle of Man and Guernsey. These are independent jurisdictions under the crown of the UK. They have been used as offshore banking centers for many years, are politically stable and have a depositors’ protection scheme in place.
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