Is the USA Popular for Opening an Offshore Bank Account?14 min read

Is the USA Popular for Opening an Offshore Bank Account?14 min read

The United States might sound like a no-go region for an offshore bank account but, for a few reasons, the USA is still an offshore banking destination.

Privacy, tax advantages and ease of international transactions are some of the factors behind the USA’s status as an offshore country. Let us see the reasons that the USA is so famous for offshore banking.

Why is the USA Considered an Offshore Banking Destination?

Although many of us picture Switzerland, Luxembourg or Panama when thinking of offshore bank accounts, the USA fulfills at least some of the key conditions of offshoreness.

Privacy: In the US, like most European states, the privacy of bank customers and financial secrecy is not violated. 

Bank customer data and bank account information cannot be readily obtained by third parties without an arrest warrant. It offers greater privacy than home bank accounts in some other countries.

Tax benefits: For Non-resident aliens and foreign persons, opening a US bank account can give you some tax benefits. 

You will not pay US income tax on interest earned on accounts if you live outside the USA. Money returned back to its country of origin may also in some cases be exempt from local taxation.

Access worldwide: As one of the largest economies in the world, the US financial system is highly integrated internationally. 

It makes it easy to send money abroad for trade, investments, payments and other cross-border financial transactions. Offshore clients like to pay in US dollars (the prevailing international currency).

The USA can provide some of the advantages of traditional offshore centers, such as privacy, non-resident tax advantages and access to global financial systems – although it isn’t considered an offshore jurisdiction by conventional standards.

Among others, because of these essential reasons, offshore US bank accounts have been an increasingly common practice.

Is Offshore Banking in the USA Legal?

Offshore banking in the USA is perfectly legal, provided it follows the laws and regulations. As discussed above, the USA offers fair privacy and tax advantages that make setting up offshore accounts attractive.

But there are some serious questions about the law here:

Non-resident aliens and foreign companies are subject to the same Know Your Customer (KYC) and Anti-Money Laundering (AML) measures as US banks when opening an account. Proper documentation is necessary.

Interest and capital gains received from a US offshore bank account are not subject to taxation as per current law for non-residents. However, owners still have to report worldwide income to their home country and pay tax there.

The remittance of funds from a US offshore account back to one’s country of origin is generally not subject to US taxation. But it will depend on your personal circumstances and the taxation system of the foreign country to determine the local tax consequences in the home country.

US citizens and residents who open offshore accounts are required to report them to the IRS and pay worldwide income taxes under the Foreign Account Tax Compliance Act (FATCA). You may face penalties if you fail to do so.

As long as all of the above legal criteria are met, offshore banking through US banks is legal. So long as accounts are for legal money, there’s nothing to worry about being illegal.

Is the USA a Suitable Country to Open an Offshore Bank Account?

A popular reason why many clients choose to open offshore bank accounts in the USA is because of a few benefits:

• Account security: US privacy legislation ensures greater security of bank customer data than accounts in other countries. This is a crucial consideration for many offshore clients.
• Tax advantages: As noted above, interest payments made to a US offshore account typically are not taxed for non-residents. In some instances, bringing back money is also tax-free as well.
• Access from across the world: The US dollar is one of the most accepted currencies around the world. A US bank account makes transborder transfers, payments and investments around the world incredibly simple.
• Political stability: As a well-developed democracy with a stable rule of law, the political environment in the USA is considered to be fairly stable. This gives security to those who are storing cash in US offshore accounts.
• Popularity: In the Americas region, the USA is culturally more familiar than real offshore locations. The widespread adoption of English also eliminates language barriers.
• Financial stability: With some of the largest banks in the world, the US banking system is well regulated, offering excellent levels of supervision, transparency and protection of deposits.

Thus, in terms of privacy, tax benefits, international reach and stability, the US can certainly be a suitable jurisdiction for setting up offshore bank accounts – at least for clients in the Americas that need a trusted near-shore solution. Account security is also soothed by the regulatory landscape.

Free Offshore Bank Account Opening in the USA

The most affordable method to open an online bank account in the USA for free is through a digital banking institution such as The Kingdom Bank. 

Because it is an online offshore bank, The Kingdom Bank allows an easy account opening without the high minimum deposit and monthly account fees.

Here are some of the top benefits of opening an offshore bank account with The Kingdom Bank:

• No minimum opening deposit – We have accounts that require $0 initial funding, so our clients can begin with low balances.
• No monthly account fees– There are no monthly fees associated with basic banking services such as online transfers, bills, or debit card transactions.
• Global accessibility – Being an offshore bank, The Kingdom Bank allows for cross-border trade.
• Digital ease– With the help of a single device that has access to the internet, clients can access their offshore accounts from anywhere using The Kingdom Bank’s easy-to-use web and mobile banking services.
• High security – The Kingdom Bank is governed by the Financial Services Unit of Dominica in accordance with international banking regulations, thereby keeping customer deposits safe.
• Currency flexibility – Accounts are available in USD, EUR and major other currencies, so clients have a wide range of options.

Therefore, for clients looking for a cheap solution to open an offshore bank account in the US with no fixed or ongoing fees, The Kingdom Bank as a digital offshore bank is a very tempting option.

Which Digital Bank Can Open an International Offshore Bank Account in the USA?

There are only a few banks that offer the option to open an offshore offshore bank account while residing in the US. One such choice would be The Kingdom Bank.

As mentioned before, The Kingdom Bank is a fully licensed digital offshore bank that is supervised by Dominica’s Financial Services Unit. 

The Kingdom Bank, with its headquarters in the Commonwealth of Dominica, is licensed to serve customers all over the world, including the United States.

Some of the best reasons to consider The Kingdom Bank as an offshore online bank for an offshore international account in the US are:

• There are no minimum deposit nor monthly fees and you can open an account and keep it for free.
• It offers the privacy, tax advantages, and international reach of traditional offshore accounts.
• In the hands of a trusted offshore financial authority, as per international banking standards.
• Online and mobile banking solutions enable convenient account management from anywhere.
• Supports multiple fiat/cryptocurrencies such as USD, EUR, BTC and ETH for added flexibility.
• Streamlined online account creation takes a few minutes to complete.

For Americans that want to have an affordable way to enjoy offshore private banking benefits, establishing an international account with The Kingdom Bank is quite the attractive alternative. 

It carries all the major benefits of offshore banking on a reputed digital platform.

Privacy protections, taxes and access to international financial ecosystems make the USA an attractive offshore banking location. 

An online bank such as The Kingdom Bank allows you to open an offshore account for a minimal amount while maintaining high security, convenience and global banking. If you’re interested in experiencing offshore private banking right now, get started by creating a free account with The Kingdom Bank.