Top tips to consider when opening an offshore account

Sean Costello, the Abu Dhabi-based chief representative for Jersey Finance in the Gulf, outlines some key areas to think about when considering your banking needs offshore.

One of the strengths of Jersey, an island off France, as a global finance centre is its political and economic stability. Leon Neal / AFP
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One of the sensible moves to make when you live or work abroad is to open an offshore bank account. But where do you start? There are many jurisdictions where you can find banks providing offshore banking and investment services, while competition for your custom is fierce. Sean Costello, the Abu Dhabi-based chief representative for Jersey Finance in the Gulf, outlines some key areas to think about when considering your banking needs offshore.

1 Start by considering your circumstances

Firstly, make sure you are an appropriate candidate for offshore banking. Generally, if you are an expatriate there ought to be advantages in opening an offshore bank account. Offshore accounts enable you to grow your savings while working abroad in a tax-efficient manner.

2 Make the most of your finances

One of the advantages of offshore banking and investment is that it enables you to more efficiently manage your finances and investments. In centres such as Jersey, a British Crown Dependency off the coast of France, there are finance practitioners, legal and accountancy specialists with many years of experience in advising expatriates and those with cross-border assets on how best to manage their wealth.

3 Your mother tongue

It probably makes sense to choose a jurisdiction where the main language is English if that is your native tongue or second language. For instance, service providers such as HSBC Expat in Jersey offer 24-hour English-speaking telephone banking.

4 It doesn't have to be in one currency

The leading offshore banking groups will offer accounts in more than one currency, often in a multi-currency arrangement so that you don't need to lose out on the currency exchange. So if you are paid in US dollars, for instance, which is pegged to the UAE dirham, you can place your funds into a US dollar account and make a currency exchange when the rate is in your favour.

5 Make sure you consider access to your funds

Another important aspect of banking offshore is how to access the funds. Most leading banks providing offshore banking services offer a telephone banking service that is open around the clock to suit international time zones, and since the advent of the internet and secure banking online, services can now be accessed via your computer and various mobile devices. It makes sense to shop around and find the range of services that suit you. HSBC Expat, for example, operates throughout the Gulf and provides a service called Global View, which enables customers to securely view their accounts online and transfer funds from one location to another at the click of a mouse.

6 Place your assets in a stable location

One of the strengths of Jersey as an international finance centre is its political and economic stability. This is an important feature for anyone deciding where they wish to place their assets and one of the reasons why Jersey has become such a popular destination for offshore banking. It recently celebrated 50 years as an international finance centre and throughout that time it has provided stability and peace of mind for investors. Jersey has more than 40 banking operations from around the world, including branches of British lenders and banks from the GCC region. Jersey has attracted more than £154 billion (Dh877bn) in deposits and 14 per cent of that is directly from this region. Abu Dhabi Commercial Bank recently opened a branch in Jersey - which has already proved popular with its existing UAE customers.

7 Choose a jurisdiction with appropriate regulation

You also want to ensure that your assets are deposited in a location where regulation is well regarded. Jersey has been recognised for the quality of its regulation by leading organisations and its regulatory regime contributes to the island being rated consistently as the top offshore international finance centre in the rankings produced by the Global Financial Centres Index. It is also the only offshore jurisdiction to feature in the world's top 10 for private banking and wealth management.

8 You should ask about depositor compensation

Consider jurisdictions that are willing to provide investors with safeguards should anything happen to the financial institution where your assets are deposited. Jersey and other Crown Dependencies have introduced a banking depositor compensation scheme to offer peace of mind to international investors.

9 Think now about your future and who will inherit

If you have been successful in business and you have substantial cross-border assets, you should consider how to preserve that wealth for future generations. Through qualified wealth-management professionals, it is possible to set up an appropriate trust vehicle that provides you with control over who inherits your estate and in facilitating distribution of wealth to selected beneficiaries.