Offshore Banking

InvestmentINTERNATIONAL

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OffshoreBankingA guide to the products and services available

Another magazine from The Publishing Group

EditorMartin Fagan, 0207 490 [email protected]

Editorial DirectorNia Williams, 0207 490 [email protected]

PublisherMarco Callegari, 0207 490 [email protected]

Managing DirectorRamesh Sharma, 0207 490 [email protected]

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Head of ProductionMelanie Jones, 020 8290 [email protected]

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www.investmentinternational.com Offshore Banking Guide

Offshore Banking Guide

Not just for the Jet Set

03

Contents4 The real picture

You don’t have to be rich totake advantage of offshorebanking so should youconsider it?

7 Choosing your offshorejurisdiction A look at regulation andhow to choose youroffshore jurisdiction

9 Changing legislationA look at how legislationhas affected offshoreinvestors

10 Offshore banking servicesA look at the products andservices on offer

12 Security is keyRay Clancy talks to PeteHorrell, MD of BarclaysWealth International andWealth Intermediaries



Martin Fagan, editor

Once seen as the province of the wealthy Jet Set, in this era ofglobalisation, discount air travel and the benefits of the digitalworld that enables us to monitor anything 24/7, offshore banking

can benefit UK citizens who decide to retire abroad, or whose jobrequires quite a lot of international travel. And foreign nationals workingin the UK will only be taxed by the Revenue on the money they earn orbring into the country, so any overseas earnings or savings are better offin an offshore account.However, many people perceive an offshore bank account as a

mythical thing, best characterised by the movie The Bourne Identity,where Matt Damon as Jason Bourne armed with only the number of aSwiss bank account and his palm print, gets access to a safe deposit boxcontaining bundles of cash, passports and a handgun.Romantic as this notion is, it’s also completely wrong: safe deposit

boxes are one thing; an offshore bank account is something else entirely.In this guide we’ll look at the brief history of offshore banking, whatprecisely “offshore” means, the legislation surrounding it, the regulationto protect offshore customers, the tax consequences of banking offshoreand the advantages.We’ll also look at what kind of services are on offer -

multicurrency card services, tax management, privatebanking, Internet services, investment funds,pension assets - with a brief review of each.Offshore banking has many uses and many

people can embrace its benefits – and the goodnews is you don’t have to be a millionaire or amember of the Jet Set to bank offshore. Wehope this guide proves useful to you.

Offshorebanking hasmany usesand manypeople canembrace itsbenefits

Offshore Banking Guide www.investmentinternational.com

4 | Offshore Banking

You don’t have to be rich to take advantage ofoffshore banking so should you consider it?

If you think that offshore banking isexclusively for the rich and famous thenyou are very much mistaken. In factoffshore banking is much more relevantnow than it has ever been and the factthat many, if not most, of the UK banks

offer offshore banking services alongside theironshore banking services reflects this. With more and more people working overseas,

it becomes crucial that your money is put into abank that you know and trust. Stability is keyand, rather than trust local banks / governments/ economies with your hard-earned cash,consider all your options.

So what is “offshore”?WG Hill, the author of the underground classicPT (for Perpetual Traveller or PermanentTourist), is quoted as saying: “Get your moneyout of your country, before your country gets themoney out of you”. And this, for some, is thecentral tenet of what offshore banking is allabout.Offshore banking is really just the practice of

banking in a country other than the one you’re acitizen of. You may reside in the country inwhich you’re a citizen or the country where thebank account is registered – or neither. Before

the EU introduced the European SavingsDirective (ESD – to be discussed in greater detaillater in this guide) in July 2005, an offshore bankwas simply a bank located outside your countryof residence, usually in a low tax jurisdiction. Theappeal of offshore banking is that it offers thepotential for tax efficiency, the convenience ofeasy international access and a safe haven foryour money.

Safe havenAsset protection, trust, good service andaccessibility are key elements of today’s offshorebanking industry. Just as onshore banking hasdeveloped with more providers adding extras totheir products, such as free travel insurance, AAcover and so on, the same can be said of theoffshore sector. Fortunately the internet helpsmakes sure each provider’s service, products andfees are completely transparent – you can easilycheck out the huge range of products andservices available, online.In addition to that peace of mind regarding

the safety of your finances, there are otheradvantages. There are many tax breaks as well,with potential tax holidays. Plus providers tendto have lower operational costs and can thereforepass these savings on to their customers through

higher rates of interest or reduced or no chargeson certain accounts or products.

Is it for you?So, if you’re thinking of upping sticks andheading abroad, or if you already own anoverseas home or you perhaps regularly work abroad for your company, you maybenefit substantially from an offshore bankaccount.Expatriates, those who own a property

abroad or people termed as having an‘international lifestyle,’ can all potentially profitfrom an offshore bank account. By its verynature such an account is flexible – and whenyou’re living abroad or sending money back andforth between more than one country ortransacting in more than one currency, then thevery thing you need is flexibility from anoffshore account. Common misconceptions ofoffshore banking include theories on hidingmoney, a service reserved for the rich andfamous or a plan to evade or even avoidtaxation! Many of the leading high street banks offer

offshore banking services to clients – soaccessible is offshore banking to all. Basicallyoffshore banking is the management of

The realpicture


Offshore Banking | 5

financial assets from a jurisdiction other thanthe one in which you live. For some people itdoes have very real and legitimate taxationadvantages, but for the vast majority of us, it isall about simplicity of money management.Offshore banking in its simplest form suits

those who make the very most of the fact thatwe can travel, live and work anywhere, invest inproperties overseas or different money marketsand who think outside the small box that is theUK. If you want to know more about thefundamental basics and benefits of offshorebanking – speak to any of the main banks suchas HSBC, NatWest, Barclays or Lloyds and learnabout the services they offer. This will give youa good grounding and help you see whether anoffshore bank account could actually be ofvalue to you.

The History of Offshore BankingFor those of you who can remember the 1970s,you’ll probably remember the UK and Europelevied the highest, most punitive taxes in thedeveloped world, with high earners in the UKhaving their earnings taxed at a rate of 85 percent, giving rise to the phrase “tax exile”, wherethe likes of the Rolling Stones, Michael Caine,Pink Floyd, Sean Connery moved abroad for

years at a time to avoid paying high rates ofincome tax.And then the government and financial

institutions in the Channel Islands –predominantly Jersey and Guernsey – realisedthat, rather than a person leave the UK to savetax, their assets could be moved “offshore” toChannel Island banks and tax could be saved thatway. The Channel Islands fall into two separateself-governing bailiwicks – Jersey and Guernsey,both of whom are British Crown Dependencies,but neither is part of the United Kingdom. TheChannel Islands assisted dejected investors withtwo key offerings: confidentiality and lowertaxation. The offshore banking industry wasborn.The Channel Islands bankers persuaded

their clients that any deposits placed intooffshore banks would be anonymous, free from the scrutiny plaguing the mainland andthe UK, and would be liable for minimaltaxation. As word spread across Europe and indeed

throughout the world, other small island nationsand jurisdictions seized upon the opportunityand began strengthening regulations regardingbanking practices and client confidentiality in thehopes of attracting foreign depositors; thus

becoming offshore banking jurisdictions andoffshore financial centres. This became particularly popular in the small

island nations of the Caribbean, which manytend to associate with offshore bankingjurisdictions. Investors and depositors seekingpolitically and economically stable jurisdictionsfound their way to these offshore financialcentres and this practice continues today. Rightly or wrongly, offshore banking has

become synonymous with "tax haven",jurisdictions characterised by low - or zero -taxation on interest, dividends, royalties andforeign derived income, as well as having somedegree of banking confidentiality. Over time thisterm has evolved to include other popularbanking jurisdictions such as Switzerland,Austria, Lichtenstein, Luxembourg and morerecently the United Arab Emirates (UAE),Singapore and Hong Kong.These gained popularity for the same reasons

the small island offshore financial centers did:they implemented sound banking practicescodified in law and regulations guaranteeingconfidentiality, low taxation and security.Although an abridged and streamlined version ofhistory, these are, fundamentally, the roots of themodern offshore banking industry.


6 | Offshore Banking

Who is it aimed at?In the real world inhabited by youand I, whether you’re a professionalexpatriate, globetrotter, internationalinvestor, or consultant, an offshorebank account could prove invaluable.Relocation, whether on a regular orone-off basis can have serioustaxation implications for your assets.But if they are safely anchored in anoffshore jurisdiction, barringunforeseen events, they can remainthere for the duration of yourexpatriation (and beyond), usuallyattracting favourable taxation andhigher returns.

Why should I have anoffshore bank account?Offshore bank accounts arefrequently available in more thanone currency. This makes themextremely valuable to those whowork in a different country or travelfrequently. It is also very useful toyour average investor as a hedgeagainst dramatic currencymovements. Some investors forexample may like to buy into acurrency recognised for its stabilitylike the Swiss franc, to preventkeeping all their money in onecurrency such as the dollar. Anoffshore bank account can also act as

a hedge against financial instability at home. Depending on where and exactly how you bank offshore, offshore bank

accounts can be much more confidential than an onshore account. Thereasons for wanting this privacy are numerous and, while Swiss bankaccounts and Cayman bank accounts are traditionally viewed as the mostsecretive, international developments have rendered them less private thanthey used to be.When people decide to move part of their wealth offshore, it is often not

just a bank account they are looking for. The offshore bank account is oftena portal to other investments such as foreign equity, offshore funds andfinancial instruments that give high rates of interest. Some of theseinvestments may be available completely tax free depending on yourpersonal situation.Sending and receiving large wire transfers abroad can be a nightmare

when using a domestic bank. There are mountains of questions andpaperwork to be dealt with. That's understandable. Domestic bankaccounts are really for in-country transactions and not equipped to dealwith large volumes of foreign transfers. On the other hand, offshore bankaccounts are specifically equipped to send and receive money from outsidercountries, and make the process as fast and efficient as possible.

Is it too good to be true?In the run up to the 2010 General Election, much was made by the Labourgovernment of the Conservative peer Lord Michael Ashcroft’s ‘offshore’status as if there was something wrong with his decision to maintain his(not inconsiderable) finances ‘offshore’ in Belize. But there is nothing wrongwith this.Offshore banking is legal; nobody will come and arrest you for having

offshore bank account, or for being a shareholder of an offshore company,or for making an offshore investment. It is absolutely legal service providedby a licensed financial institution.

Issued by HSBC Bank International, a trading name of HSBC Bank International Limited, HSBC House, Esplanade, St Helier, Jersey JE1 1HS. HSBC Bank International is regulated by the Jersey Financial Services Commission for Banking, General Insurance Mediation, Investment and Fund Services Businesses and licensed by the Guernsey Financial Services Commission for Banking, Collective Investment Schemes and Investment Business. Licensed by the Isle of Man Financial Supervision Commission. Copies of the latest audited accounts are available on request. Approved for issue in the UK by HSBC Bank plc, 8 Canada Square, London E14 5HQ. Deposits and investments made with non UK members

Financial Services and Markets Act 2000, including the Financial Services Compensation Scheme. To help us to continually improve our service, and in the interest of security, we may monitor and/or record your communications with us.© HSBC Bank International Limited 2010. All Rights Reserved. AC18141/LV/2206311

Put your offshore banking in the hands of the expat experts

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Put your trust in the hands of HSBC Bank International and you will be dealing with people who really understand what it’s like to be an expat. Because we’re experts in expats, we can help you take advantage of the opportunities your circumstances offer, with specialist offshore products and services to help you make the most of your savings and investments while you’re living overseas.

Take advantage of our expat expertise:

Visit www.offshore.hsbc.com/ii

Call +44 (0) 1534 616111

Many of theleading high streetbanks offeroffshorebankingservices toclients – soaccessible is offshorebanking to all

Choosing a jurisdiction | 7


A look at how regulation protects you and howto choose your offshore jurisdiction

The very nature of being ‘offshore’means your account is subject tothe laws and regulations of thejurisdiction in which theaccount is based and not thelaws and regulations of the

country you reside in or are a citizen of.This is why you have to pick the

jurisdiction – the country you choose to baseyour account – with care. Where youcurrently live in the world impacts on whereyou can bank offshore. Not all jurisdictions(countries) are equal. Any bank is governedby the laws of the country it is licensed tooperate in. It is also governed by a plethora ofinternationally generated financial oversightregulations.

For example, if you live in the eurozone,then it would generally be unwise to open abank account in the Isle of Man, simplybecause banks in that jurisdiction are obliged to comply with increasingly intrusiveregulations which demand disclosure of thebank's client information. It can even involveyour offshore bank deducting a non-declaredrate of tax from your interest bearingaccounts – called a withholding tax - whichmay be just the thing you’re trying to avoid.

CriteriaThere are several key criteria which anyoffshore jurisdiction should fulfil before youconsider banking there. These includepolitical and economic stability, stronginfrastructure, (a modern and reliablebusiness infrastructure is usually a fairly goodindicator of the stability of a jurisdiction),convenient location (although this differs asyou move from country to country, it is stillimportant to consider the geographicallocation of the country in which you intendto bank), and investor/customer protection(standards can vary tremendously fromjurisdiction to jurisdiction, and sometimesbetween institutions).The only way you candiscover if a jurisdiction is right for you is bydue diligence - the process of evaluating aprospective financial decision by gettinginformation about the financial, legal, andother aspects in order to evaluate thesoundness of the decision you’re about tomake.

Initially, this means doing a little researchfor yourself, and there are several things youcan do. First of all, look at the establishedinstitutions in your jurisdiction of choice. Inthis way, you can gauge the standards of the

industry there and, in so doing, give yourselfa frame of reference.

ResearchAlthough longevity is an important point foran offshore bank, it is not the only factor tobe considered. You need to make sure that thebank you intend to entrust with your cash isthe real deal (i.e. has an office, staff, a bankinglicence, assets, etc). If you come across theinstitution via its website, make sure it ispossible to make contact by other means thane-mail. Although the presence of a physicalmailing address, and telephone and fax detailsdo not in themselves indicate that a bank islegitimate, their absence should trigger alarmbells.

Also be wary of banks or providers offeringinterest rates that seem unusually high.Although there is certainly scope for goodreturns in the offshore arena, things that seemtoo good to be true usually are.

But due diligence requires you do anenormous amount of spadework and analysisof the jurisdiction and its financialinstitutions which, for the inexperienced, isexhausting, fraught with anxiety and timeconsuming. It is for this very reason that

Choosing your offshorejurisdiction


8 | Choosing a jurisdiction

many people who require an offshore bankaccount use the offshore divisions of the UK’smajor high street banks, all of which offeroffshore services to existing and newcustomers.

Many have decades – some even centuries –of experience in offshore banking and so, ifoffshore banking is something you’reseriously considering, it may be worth yourwhile contacting one of the high streetproviders and talk through their offshoreservices with one of their advisers. Remember– this doesn’t oblige you to open an accountwith that particular bank.

What’s the difference betweendomicile and resident?Domicile or residence may sound like twowords to describe the same thing but, used inthe context of offshore banking, they are usedto express two very different states.

‘Domicile’ normally relates to the country orstate that an individual regards as theirpermanent/ultimate home location. A person'sdomicile is established at birth and this remainsuntil an individual resettles with the firmintention of remaining in that new locationand/or takes out citizenship of that country.

‘Residence’ is normally determined by an individual's status at a particular time. The rules vary from country to country, but in many cases presence in a country formore than 183 days in any one tax year isenough to constitute residence for taxpurposes.

How much money do I need toinvest offshore?There is no absolute low limit, but the extra costs of taking advice, opening newbank accounts, phone communication at a distance, transaction costs mean offshore investment is unlikely to beworthwhile for those earning less than£25,000 a year. However, because of theinternet, costs are being reduced. Offshorebanks will take deposits down to £1,000, butfor a personalised 'private banking' service,you may need to deposit £100,000 or more.Each offshore bank will have its ownrequirements, so these are meant as a roughguide.

How do I open an offshore bankaccount?With the advent of 'Know your Customer'legislation in the last few years, the numberof checks banks are required to conduct on potential customers have increased greatly. The nature of these checks – and the proof the bank will need to establishyou are who you say you are - will depend on the bank, but you should be prepared tosubmit:

l The original or a ‘notarised copy’ (signed by a solicitor, your doctor, etc)of your passport, and/or a notarised copyof your birth certificate and/or drivinglicence.

l A recent utility bill (or equivalent

document) with details of your permanentaddress. The electoral roll may also bechecked.

l A bank reference letter drawn on yourdomestic bank’s letterhead (or on the formsometimes provided by the offshore bank),and signed by the bank manager, statingthat you are a reliable and suitablecustomer. The recommendation is that thereference letter is completed by a bank withwhich you have had a two-year bankingrelationship (six months is really the bareminimum).

l A professional letter of reference from adoctor, lawyer, and accountant in yourcountry of residence.

l A letter of intent on source of funds. Thisis where you must lay out the projectedaccount activity, and also the expectedsource of any funds deposited. Know yourCustomer legislation means that if there isany suspicious or unusual account activity(i.e. if the actual amounts deposited orfrequency of deposits differ from yourprojections), the banks must investigatethis, and if necessary pass the informationon to the relevant authorities.

l The required minimum deposit. This willvary from institution to institution.

If it is somethingyou’re seriouslyconsidering, itmay be worthyour whilecontacting oneof the highstreet providersand talkingthrough theiroffshoreservices

Legislation | 9


Just as you would undertake duediligence on the prospectiveoffshore bank with which you’reconsidering opening an account,the bank is checking you out tomake sure you are who you say

you are. In effect, the bank will want to knowa lot more about you than it would have a fewyears back, mainly because of moneylaundering and its association with terrorism.The legislation governing offshore banking

was forever changed as a consequence of whathappened on the morning of September 11th2001. The US sought to crack down onpotential terrorists who were using theoffshore banking network to move moneyaround by initiating far-reaching bankingregulations - applicable to all accounts(worldwide) that were transacted in USdollars.Following 9/11 the US introduced the USA

PATRIOT Act, which authorises the USauthorities to seize the assets of a bank whereit is believed that the bank holds assets for asuspected criminal. Similar measures havebeen introduced in some other countries.This doesn’t impact the ‘normal’ offshoreclient directly (we assume your desire to openan offshore bank account is a legitimate one),but part of it is the clause entitled: “KnowYour Customer” which is the due diligenceand bank regulations that financialinstitutions must perform to identify theirclients and ascertain relevant informationpertinent to doing financial business withthem.The international response to money

laundering has been coordinated by theFinancial Action Task Force (FATF), alsoknown by its French name, Groupe d'actionfinancière (GAFI), whose original 40principles form the basis of most

international responses to money laundering.As well as the opportunity to curtail

terrorist financing activities, the governmentsof Europe saw an opportunity to useterrorism as an excuse to clamp down onwhat really annoyed them about offshorebanking - tax avoidance.The European Union Savings Directive

(EUSD), which came into effect in July 2005,contains the so-called European Unionwithholding tax, a tax deducted from interestearned by European Union residents on theirinvestments made in another member state,by the state in which the investment is held.This directive makes EU residents with

offshore bank accounts choose between oneof two options:1) Allowing their offshore bank(s) to reportsavings income directly to local taxauthorities.

2) Pay tax immediately at such time income isprovided to the account holder by theiroffshore bank.Over time, it is expected an increasing

number of offshore banks will be affected bythis decision. In addition, if the accountholder chooses the second option mentionedabove, then the tax rate used to collectmonies due is scheduled to rise in 2011.This increase in the tax rate is viewed as a

way of eventually forcing all account holdersin offshore banks to choose the first optionmentioned above - namely allowing thosebanks to report directly to their country’s taxcollecting agencies. Any interest you receive on your accounts

can either have tax withheld at source, oralternatively, you may continue to receivegross interest, but the bank will have to reportdetails about you and the interest you havereceived to the tax authority in the EUmember state where you are resident. This

raft of legislation has certainly complicatedthe next question:

What taxes will I be liable for?Your tax situation and potential benefits ofplacing your money offshore will depend onyour personal circumstances, the institutionyou open the account with and thejurisdiction in which it operates.As a rule of thumb, there’s generally notax deducted on interest earned. Also, any offshore income may not be subject to tax. Depending where you live, income on an offshore bank account or investmentsmay not be subject to tax in your country of residence, if that money is not remittedinto your country of residence. Moreover, in jurisdictions such as the Isle of Man and the Channel Islands, there’s noinheritance tax, capital gains tax or deathduties. Perhaps the most prevalent tax on offshore

banking is a withholding tax. When adividend (or royalties or interest) is paidinternationally, the country from which thepayment is made usually taxes the payment as it leaves, by 'withholding' a proportion of it, usually between 10 per cent and 30 per cent. If there is a double tax treatybetween the two countries concerned, it’soften possible to reduce the tax, or to reclaim some or all of the money. Somereceiving countries allow the withheld tax to be set off against domestic taxliabilities.There's no point in setting up an offshore

account if you do not really need one. If youcould easily do what is required with a simpledomestic account, that's the best course tofollow. On the other hand, if some of theideas above struck a chord with you, maybe itis a good time to move offshore.

A look at how legislation has affected offshore investors

Changinglegislation


10 | Products and services

Banking and investing offshore means a consistent, long-termfinancial relationship wherever you are in the world - and theability to manage your money in a range of currencies

Offshore banking offers a multitudeof services – far more than youmight actually need – but it’s agood idea to be aware of thescope of what products andservices an offshore bank account

has the potential to give you access to. Below, welook at the most common ones with a briefexplanation of each. The list merely scratches thesurface and so, if there’s a particular product orservice you require from an offshore bankaccount, it’s best to enquire of the bank you’reseeking to open an account with.

International Bank AccountUsually available in sterling, US dollars or euros,this is the basis of all your offshore bankingservices. It gives you instant access to yourmoney along with control over your day-to-dayspending, no matter which country you're in.And with 24 hour internet banking – and somebanks offering 24-hour telephone banking –access is not problem, wherever you are in theworld.

Relationship Manager ServiceDesigned to help affluent clients manage andmaximise their wealth, this is a dynamic andtailored service, taking into consideration yourindividual circumstances and financial goals.

A personal Relationship Manager and theirback-up team will be your first point of contactto the extensive range of products and servicesavailable at your financial level. These couldinclude: managing your cash in a range ofcurrencies, specialised borrowing, investmentand mortgage services, sophisticated savings,credit card and international finance options.

This service is generally (although not always)

free, simply because you have to be approachingthe high net worth bracket to qualify. As ageneral rule, you’ll need to hold a balance of£50,000 or more (or currency equivalent in cashor investments) and/or an annual individualgross income of £100,000 or more (or currencyequivalent) paid into your international account.Anything lower and fees may apply.

International PortfolioManagement ServicesIn a nutshell – offshore investment funds.Offshore funds work on the same principle asonshore investment funds or mutual funds,pooling investors' money to provide the benefitsof a well diversified and professionally managedportfolio of investments.

A fund qualifies as an offshore investment if itis incorporated in an offshore centre andintended for use by non-residents of thatjurisdiction. Such funds generally pay little ornothing in the way of local taxes, although theymay receive dividends or interest net ofwithholding tax, depending on where and inwhich assets they invest.

If tax is not the deciding factor in usingoffshore funds or an offshore trust, the scalesmay be tipped in their favour by otherconsiderations. The type of investment maysimply not be on offer onshore, due to regulatoryprohibition or a lack of demand. Hedge fundsare an example of the former and currency fundsthe latter.

As with onshore funds, some offshore fundsgive you an income by paying dividends everymonth, quarter or year. Others help your moneygrow over the long term by investing in shares,which the fund manager believes will appreciatein value.

A good offshore banking service will be able tooffer advice on a comprehensive range of fundtypes, including hedge funds, property, privateequity and fund of funds and then work withyou to reach your ideal investment approach.

Tax Management Offshore tax legislation is constantly evolving.New and wide-reaching measures continue tobe introduced and the courts continually addto an already massive body of rulings andinterpretations. Not only are tax regulationschanging, but people’s tax circumstances alsochange.

But an offshore banking service will,probably in tandem with an accountancy group(for example, Barclays Wealth Internationaluses Ernst & Young), help you with tax returns,no matter how complex, and havecomprehensive knowledge of all majorjurisdictions as well as local and offshore taxissues.

It should offer bespoke domestic andinternational strategies designed to legallyreduce or eliminate taxes, minimise taxablegain from the sale of a business, property orinvestment portfolio, reduce corporate orpersonal income taxes and maximise taxadvantaged retirement programs.

Offshore Trusts A trust works by taking assets (cash,investments, property) out of the ownership ofthe person establishing ('settling') the trust andputting them into the hands of a trustee. Anoffshore trust is simply one based in anoffshore jurisdiction and its profits are usuallynot taxable there. The trustee normally followsthe wishes of the settlor.

Offshore BankingServices


Trusts, which are based in 600-year oldEnglish common law, have been in commonuse for offshore asset protection for nearly 100years. The protection that a Trust can offer isunique and far reaching but not alwaysrelevant, compliant or legal in certainjurisdictions or for certain nationalities.

Asset Protection TrustA trust designed to accomplish a number ofestate planning goals of its settlor, before andafter death, including planning for thepreservation of the settlor’s estate from avariety of risks which would threaten todissipate the estate if one or more of the risksmaterialised. An APT is typically established ina jurisdiction other than the settlor’s homecountry.

Asset protection trusts are frequently seen asamongst the more esoteric of trust types,particularly in the UK and, in the past, assetprotection has been considered the preserve ofthe super rich. An asset protection trust may, insome circumstances, help to safeguard portionsof an individual's assets in the event thatbankruptcy (or divorce) proceedings wereinstituted against them. Like any form of trusts,those wishing to establish them should do soonly after taking qualified financial advice

Multicurrency Offshore CardServicesOffshore credit cards work pretty much thesame as their onshore brethren: they can beused both to pay merchants and to withdrawmoney from ATM machines worldwide.

Where onshore and offshore cards differ,however, is that the latter are, for the most part‘secured', which means that you are required to

provide a security deposit with yourapplication, and you do not have to undergo acredit check. The deposit required dependsupon the desired credit line, but as a generalrule, usually ranges from between 125 per centto 200 per cent of the credit line requested.

Although most ‘onshore’ cards deal withbuying goods and services in many currenciesand the card holder settles the bill in thecurrency of the country the card is issued in,for many offshore customers, the currencyaspect is dealt with in their offshore account.This means an offshore bank customer couldhold several cards in various currencydenominations (US dollars, euros, sterling) tobe used in countries using those currencies soonly pay one layer of currency conversioncharges.

Pension Funds vs. PensionAssetsUnlike most other forms of investment,pension investment is normally tax-privilegedin high-tax countries, meaning that thecontrast between onshore and offshore returnsmay not be as marked as it is for many types ofinvestment activity. For residents of high-taxcountries, therefore, especially if they areintending to stay put in retirement, it may wellbe the case that they should build their pensionprovision inside the tax-net of their homejurisdiction.

But taking retirement income from anonshore pension is bound up with miles oflegislative red tape, as governments prescribetight laws on how pension funds have to beconverted in an annuity income before acertain age and how income from an annuity istaxed.

Offshore, pensions investment means simplybuilding up a secure, tax-efficient fund, whichcan be distributed when and where you want itin future – unbounded by the legislative whimsof governments. People who already liveoffshore and have no intention of movingonshore, are not really concerned with thedistinction between 'pensions' investment and'non-pensions' investment, since there areprobably no taxes to consider either way.

Whichever route you chose to go down, youshould take advice from an adviser at youroffshore bank.

Internet ServicesFirst there was papyrus and charcoal; then, along time later, the telegraph wire, thetelephone, the fax machine and now theinternet. For many people wishing to accessbanking services, the ability to transact onlinehas become a must.

Online access to your offshore bank is prettymuch the same as accessing your onshoreaccount: access your account 24/7, the ability tocheck your balances and transactions, pay billslike credit cards and utility bills, transfermoney between accounts or into someoneelse's bank account, set up, change or cancelstanding orders and direct debits.

Like any bank, offshore banks are committedto keeping your money and your personal datasecure and use the highest levels of industry-standard security so you can access youraccounts online with confidence.

Provided you take reasonable steps to keepyour security information secret at all times,most banks will protect you from fraud and, ifyou lose money to fraud, will refund itcompletely.

Products and services | 11


12 | Barclays Wealth International

Barclays puts safety and service first asPete Horrell,managing director ofBarclays Wealth International and WealthIntermediaries, tells Ray Clancy

With over 300 years ofexpertise in banking,Barclays is one of thelargest and most respectedfinancial institutions in theworld and is taking a

leading role in ensuring that its offshorecustomers are putting their wealth into asecure and safe environment.

The need to keep standards high and offersafe and secure banking is one reason thatoffshore accounts are currently a growth area,according to Pete Horrell, managing directorof Barclays Wealth International and WealthIntermediaries.

Many clients work in overseas locationsand he needs to make sure his team deliversand understands the stress and complexity ofmoving abroad and back again to the UK,which customers may experience.

”We pride ourselves on having highstandards, often higher than is required bythe regulations,” he says. “We need to beproviding the right solutions and the rightservices to people wherever they might be.”Extras such as relationship managers andinvestment advice are often required.

He appreciates that people need flexibility.“Offshore banking is about ensuring that youdon’t have the additional burden of changingyour account when you move or have anadditional layer of tax that you shouldn’t bepaying,” he explains.

Tax issuesAlthough tax issues can dictate the need for anoffshore bank account, he points out thatpeople should not confuse having aninternational account with tax issues. “We arenot providing tax advice. An offshore accountprovides banking services, products andinvestments to the best possible standards inthe location where you live and work,” heexplains.

He admits that the recent furore in the UKover the tax status of non doms has cloudedthe waters. “The UK tax rules allows people,under certain circumstances, to not pay tax ontheir non-UK earnings and an offshore accountgives them access to these funds,” he says.

Indeed increasing globalisation means that offshore accounts are needed by more and more people. They could be those thatmove overseas for work, retire abroad, orwhose career means frequent changes oflocation. They all need to manage their money and investments often in a countrywhere the banking standards are below those ofthe UK.

”Security and safety are major priorities.There’s an increasing demand to ensure thatyour finances are looked after in a safe andsecure environment, that demand is going tocontinue to grow,” says Pete.

New regulationIn the post recession world new regulation isinevitable and he believes that Barclays ispoised to ensure its offshore customers areprotected not least because it already operatesto such high standards.

“We are well positioned in this respect.More and more people are working ormoving abroad so they need an account thatcan operate wherever they are. They want thesame access to products and services anddon’t want to have to keep moving theiraccount with all the complexity that can beinvolved in overseas jurisdictions, especiallyin riskier locations,” he says.

“So being able to offer a safe and securebanking environment will push demandforward.”

Innovation is also important asinternational banking grows and Barclays has been at the forefront includingintroducing a number of information guides in the form of podcasts.

“Clients always welcome new ideas in how they access information. With clients all over the world we need to be innovativefrom the offshore perspective so that they can access products and services and utilise the very latest applications,” says Pete.

Security is key

To find out more about Barclays Wealth International visit www.offshore.barclays.com/2010 or call +44 (0)141 352 3899

BROADEN YOUR HORIZONS

The UK’s number one wealth manager1 offers you a range of offshore and international accounts in sterling, US dollars and euros, discounted international payments and access to international telephone and online banking. Barclays Wealth International has an extensive range of actively and passively managed investment strategies and a variety of offshore, onshore and overseas mortgages. To discover what investment opportunities there are for you, contact Barclays Wealth International today on +44 (0)141 352 3899 or visit us at www.offshore.barclays.com/2010

Barclays Wealth is the wealth management division of Barclays and operates through Barclays Bank PLC and its subsidiaries. Barclays Bank PLC is registered in England and is authorised and regulated by the Financial Services Authority. Registered No: 1026167. Registered Office: 1 Churchill Place, London E14 5HP. Rules and regulations for the protection of investors and/or depositors under the UK Financial Services and Markets Act 2000 [may] not apply to business conducted from offices located outside the UK and investors and/or depositors conducting business through our non-UK offices [may] not be able to benefit from the provisions of the UK Financial Services Compensation Scheme. For further Information on these companies and Barclays Wealth please read the Important Information. 1 As ranked by Private Asset Managers (PAM).

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Offshore Banking

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