Offshorecash.net

In many cases, foreign workers in Saudi Arabia find that they’re able, for the first time, to save part of their income for the future. You should therefore investigate the best ways to obtain (safe) returns on the money invested and (legal) ways to avoid tax. Before leaving your home country, declare your trip to your home tax authorities. Provided you establish non-resident status in the Gulf country in which you’re working, you will normally be outside the remit of your home country’s tax regulations and will therefore minimize (or avoid altogether) tax penalties. If you keep your home bank account open in order to pay expenses (e.g. related to a property), the money that you remit to this account should be kept to a minimum. If you’re also earning income in your home country (e.g. from property rental), you may be liable for tax on this and you should check with your home tax office or a financial adviser. US citizens must also pay home tax on their overseas earnings.

An offshore bank account may be advantageous if you want to earn interest while keeping funds reasonably fluid in the short to mid-term. An offshore account can be used as a central source from which to send funds to other locations, including an account in your home country. Other attractions are that money can be deposited (and maintained) in a wide range of currencies, customers are usually guaranteed anonymity, there are no double taxation agreements, no withholding tax is payable and interest is paid tax-free.

There are over 50 official ‘tax havens’ offering offshore banking, including the Channel Islands (Jersey and Guernsey), the Isle of Man, Gibraltar and the Virgin Islands. A large number of American, British and other European banks and financial institutions provide offshore banking facilities in one or more locations. Most expatriate financial publications, such as Resident Abroad, carry advertisements for offshore banks and their services.

Most institutions offer high interest deposit accounts for long and mid-term savings and a variety of investment plans. Accounts have minimum deposit levels that usually start at around $1,500 (£1,000), with an upper limit of around $150,000 (£100,000), above which you may be able to negotiate a special interest rate. The major disadvantage of offshore accounts is that there are usually stringent conditions relating to withdrawal periods and penalties for early withdrawals. You can deposit funds with instant access or for a fixed period, for example from 30, 60 or 90 days up to a year or more. Interest is usually paid monthly but can be paid annually, in which case interest payments are slightly higher. There are usually no charges if you maintain the minimum balance in the account. Some accounts offer a check book but are likely to impose a limit on the number of checks that you can issue in any year, after which you must pay charges. Cash or credit cards are frequently offered, usually underwritten by Visa or Mastercard, and these can be used in ATMs worldwide.

When reviewing financial institutions and offshore banking centers, your first consideration should be the security of your money. Offshore branches of larger companies are in most cases separately formed companies, with rules and regulations applying to the countries in which they’re formed and operate within. In the event of any difficulties, the parent company is likely to bail out its subsidiary, but might not be legally required to do so. Nevertheless, big is generally best when it comes to selecting a home for your money. The major international banks are hardly likely to fold and you might feel more comfortable with those that you already know. If you’re offered unrealistically high terms of interest, the chances are that they’re just that – unrealistic. However, some of the northern European banks, e.g. those in Finland, offer much higher rates than average, presumably to attract funds, and they’ve been operating safely for a number of years.

Many banking centers offer a protection system whereby a percentage of bank deposits up to a maximum sum is guaranteed in the event of a financial institution becoming insolvent (Guernsey, Jersey, the Isle of Man and other offshore centers operate such a protection scheme). You can check the level of deposit insurance offered by the various financial institutions with Moody’s Investor Service or via your financial adviser; you can also verify their credit ratings. All banks have a credit rating, from the highest of triple ‘A’ downwards, and most are happy to tell you about it, particularly if they have a high rating. Ratings just below ‘AAA’ don’t necessarily mean that the financial institution’s status is doubtful.

Some people regard savings and deposit accounts as attractive only to the smaller investor. Those with larger amounts to invest, who are seeking greater returns, might consider other types of investment.

If there’s one place in Switzerland where you can expect a warm welcome, it’s a Swiss bank. There are some 600 in Switzerland, so competition for your money is intense. You will probably not be surprised to hear that Switzerland has one of the most effective banking systems in the world. Financial operations are usually straight-forward and customer service is excellent. The world-famous secrecy in the banking industry covers all customer accounts. Foreigners are very welcome when it comes to parking their money in Switzerland.

The major Swiss banks are UBS and Crédit Suisse (Schweizerische Kreditanstalt). However, the biggest banks don’t always offer the best conditions to private customers. There are quite a few smaller cantonal banks that offer excellent service for private customers – so shop around.
Opening hours
Banks usually open Monday to Friday from 8am to 4.30pm. Many banks open late one day a week, in major cities some branches also open on Saturday. Outside of cities, some smaller banks close for lunch.

In larger cities, you can also find 24 hour “automatic” service centers where you can change currencies, do transfers, withdraw money, buy travelers checks etc. Most banks offer internet banking as a standard service.

If you plan to stay in Switzerland for a while, one of your first things to do is open a Swiss bank account. You will need it for many transactions, including rent and salary payments.

Opening an account is a straightforward process, just go to a bank of your choice and tell them that you would like an account. Different types of accounts include the following:

* Current accounts – useful for day-to-day management of your money, but pay little interest.
* Salary accounts (Lohnkonto – compte salaire) pay a little more interest than current accounts, but you don’t get a chequebook and/or some other services.
* Saving accounts (Sparkonto – compte de livret) offer higher interest, but are not very useful for many transactions.

You can open a foreign currency account in Switzerland, however, these don’t usually pay interest. The Swiss franc is one of the most stable currencies in the world (and unique among major currencies in that it is still backed by gold), so the risk of holding the currency is lower than in many other instances.

Many banks also have special types of accounts that don’t fall into a specific category – bear in mind that fees can vary considerably between them. The best thing to do is to ask several banks for full information and compare different offers.
Student accounts

For students and young people, there are usually special accounts available with few or no account fees. Shop around and ask for special offers.

Bank statements are usually issued monthly. With a salary account you often only receive quarterly statements. At the end of the year, you will probably receive a listing of all bank charges, interests paid and taxes withheld. All information from Swiss banks can be requested in English, German, French and Italian.
Account cards

With most accounts, you will receive a free account card (Bankkarte – carte bancaire). This card can be used for cash withdrawals from ATMs and other transactions on your bank’s electronic terminals.