UAE Expats And Offshore Banking
14 March, 2017
For many international expats operating in the UAE and Middle East, an offshore bank account is mandatory. If you are yet to open an offshore bank account, this guide has everything you need to know about the subject.
What is an offshore bank account?
An offshore bank account is one that is located outside of the customer's country of residence. So, for foreigners living or working in Dubai, practically any country outside of the UAE, including the expat's country of origin, is considered offshore.
Why go offshore?
Offshore banking is a practical way for international expats to manage their money in multiple currencies, instead of having to open bank accounts in several different countries, it also eases selling shares of your organization and onboarding of investors within the UAE. Find out more about corporate account applications and multi-currencies here.
Who to set up an offshore account with ?
When relocating overseas, moving financial assets is on top of the priority list. An advantage to financial relocation is to better enhance the application process when incorporating your entity. Bank charges tend to be lower when transferring money between onshore and offshore accounts.
Europe Emirates Group excels its experience and have proven its direction in consulting offshore companies by consulting on the type of account, minimum balance, monthly fee and other criterias that are important to a prospective customer.
If you feel the need to do it yourself, there are multi channel online price comparison sites that will help you filter search results based on the provider, however these processes need be manually researched with no clear direction on which would be the right decision for you or your business.
Offshore banking gives you protection against political risk and currency risk. Before opening an account, it is important to find out how much of your money in these accounts is protected against risks such as bank insolvency. A key factor to consider is the minimum balance required, as offshore private banks may set higher minimum levels. You may face big charges if your balance falls below a certain level. You must check all the fees, often buried on the bank's website. If you plan to send large sums overseas, check how competitive your bank's currency exchange rate is.
When comparing savings accounts, check whether there is a lock-in period with penalties for early withdrawal. Also, be aware that extra charges can apply when using your cards in a different currency.
Other charges include a small regular fee if you choose to receive paper statements rather than viewing them online.
Expats wanting wealth management and tax planning services on top of a basic bank account should consider an offshore private bank.
While the charges are higher, it can be worth it as the best offshore banks give you multifunctional accounts, providing service above a normal retail bank. However, if you don't make use of the extra facilities, you could end up wasting money. Find out more about private account set-up here.
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