What are Offshore Bank Accounts.
In the last six months , offshore bank accounts in Jersey has been a household name in Kenya. Many Kenyans are wondering where in the world this place is what could our prominent members of our society have to do with the place anyway. how is banking in kenya affected or connected to Jersey?
What are Offshore bank accounts
Jersey is one of the places in the world which provides Offshore Bank accounts. Offshore Bank accounts are accounts that are located in a bank outside the persons’ country of residence. These are countries which typically have a low tax jurisdiction that provides financial and legal advantages. Many people are aware of the offshore swiss bank account.
There has been a strong appeal to have the law of anonymity reviewed especially since the world is faced with the threat of drug trafficking and terrorism. Apart from Jersey which falls under the Channel Islands (that is Sark and Herm) other countries which offer these services include Bahamas, Seychelles, Switzerland and many others.
Disadvantages of offshore bank accounts
Due to the privacy and anonymity these accounts have the following disadvantages
- Many leaders especially in developing countries, have taken advantage of these offshore accounts and siphoned cash from their countries. this actions have led to the detriment of the economic development.
- Offshore bank accounts have made it easy for money laundering. Illegal dealings, for example, corruption, drug trafficking and even funding of terrorist activities have been encouraging.
- Offshore bank accounts deny income to countries in terms of tax to be charged on interest paid for these investments, especially in the developing economies.
The advantages of offshore bank accounts
- Offshore Bank accounts offer greater privacy and anonymity which the depositor enjoys, that is ‘top secret’ on any account activities. Therefore the amount of ones wealth never raises eyebrows and they are protected from ‘witch hunting’.
- Offshore Bank accounts have very low or no taxation charges on the interest paid to the account holders.
- Offshore Bank accounts holders can easily access their deposits, especially with the currently improved communication technology.
- Offshore Bank accounts leads to tremendous growth in investment due to high interest rate paid and the same is not taxed.
- Deposits made to Offshore Bank accounts are protected against local political instability or even financial instability.
Offshore accounts are tremendously beneficial investment to honest investors who have acquired their wealth in transparent manner and not through fraud or embezzlement. Investors should actually take advantage of these accounts provided their wealth is not ill gotten otherwise the full force of the law will soon catch up with them. countries can now follow up on monies they have investigated and proved to be fraudulent.
This new developments on offshore bank accounts visibility has reduced the advantages of privacy and anonymity.