Reasons to Bank Internationally
There’s a wealth of reasons for individuals and companies to bank internationally.
Many people around the world use international banks to shelter their money from their home country’s income and estate taxes. Hosts of banks are based in countries with low or no income and estate taxes, such as the Cayman Islands, Belize, Panama and the Isle of Man. But you can’t just put your income in Belize and not pay taxes.
Customers must report their income and work with their bank to make sure tax avoidance doesn’t turn into tax evasion.
Some individuals use international banks to invest in the economies of booming countries and in developing countries, the same way they might invest in a domestic corporation or real estate venture.
A number of wealthy individuals keep their wealth in offshore banks and other entities to keep it safe from lawsuits. That doesn’t mean these people are criminals; they simply want to avoid losing every penny to a sudden, unexpected or predatory lawsuit.
Since international banks lend and borrow on international markets, they’re less affected by domestic interest rate fluctuations. For example, when someone wants to avoid sinking interest rates in their own country, one thing they might do is move their money into an international bank.Also, some foreign banks might offer better interest rates than domestic banks, providing a money-making opportunity for customers.