As daunting as it may be, the prospect of opening up yet another bank account to add yet another card to your wallet, and remember yet another set of pin numbers this really should one of the very first things you do when you become an expatriate.
It used to be the case that offshore banks were traditionally used by the ultra-wealthy. Secret bank accounts in Switzerland or the Cayman islands spring to mind. To most they probably seemed like a bit of a pipe dream. If only you were rich enough to open such an account, to stash your millions! But that really is no longer the case and offshore bank accounts are readily and easily accessible.
You will benefit from an offshore account if you live outside your home country, frequently move between countries, or are perhaps thinking of retiring abroad. You will especially benefit from an offshore bank account if you are a resident here in the UAE.
Of course we all need some sort of deposit account locally as this is usually where ones salary is paid into, where cheque books are issued from and where local bills such as your DEWA bill are paid. However if you are only going to take one step towards looking after your money as an expatriate here in the Middle East it should be to open up an offshore bank account.
But why is it so important?
Well there are many reasons but probably the most important are that of peace of mind and safety.
Did you know?
Local laws here in the UAE mean that the government of Dubai has the right to freeze your bank account without notice, meaning you and or your spouse could be in a position where you have no access to any money. Reasons for freezing a bank account include the death of a resident or it has even been known for bank accounts to be frozen following a car accident. The process of getting your account to be unfrozen and regain access to your capital is not an easy process. Sharia law prevails here and thus with it the Government have ultimate power over your bank account.
Security is paramount. Even if you don’t consider yourself a savvy saver the least you should be doing is protecting your wealth. Jurisdictions such as Argentina and Cyprus have both taken local depositors money and the sale of bank details to kidnappers is not unknown in other areas of the world.
Stronger depositor protection can be found in offshore jurisdictions such as the Isle of Man and Guernsey. These are independent jurisdictions under the crown of the UK. They have been used as offshore banking centers for many years, are politically stable and have a depositors' protection scheme in place.
Offshore banking can of course bring with it a whole host of additional benefits especially if you bank with a private wealth arm offshore. Benefits such as cheaper and easier currency conversion or discretionary portfolio management, for example. So the ideal is to have your salary paid into your local account and use this as your working balance. Any surplus capital should then be moved into your offshore bank account.
It’s a simple process to open an offshore account and If you already have a financial adviser here in the UAE they should be able help you do this or at the very least certainly skip over some of the hurdles and make the process easier for you.