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What is an offshore bank account?

An offshore, or overseas, bank account is one that you have in a country you don’t reside in.

They allow you to make and receive payments, hold money and set up savings and investment accounts in multiple currencies.

Why use offshore accounts?

Offshore accounts can make it simpler to manage your financial commitments across multiple countries and regions. They can be useful if you need to make, or receive, regular international payments and transfers.

Most expats have a bank account in their home country and another account in the country they're living in. Many also consider opening an offshore account, as this can be an effective way to save, invest and manage money while abroad.

Reasons to open an offshore account include:

  • you’re already living and/or working abroad
  • you’re planning to move abroad – eg for work, or to retire
  • you’re an international assignee and move countries regularly for work
  • you make frequent trips between countries – eg for business
  • you get paid in a foreign currency – eg for freelance work
  • you own assets abroad – eg investments, or property
  • you have family members abroad who you support financially – eg a child’s school fees

What are the benefits of offshore banking?

While each offshore account will come with different features and benefits, here are some of the common ones:

  • potentially tax-efficient savings and investments in various currencies, although any tax benefits would depend on your circumstances
  • hold money, make and receive payments in multiple currencies
  • manage foreign exchange
  • access international expertise and investment advice
  • keep your money in a secure and central location, connected to your local accounts
  • keep the same bank account every time you move

 

They typically also come with regular banking features, such as a debit card and online and mobile banking.

What else do you need to consider?

Tax

While offshore accounts could provide a tax-efficient way to save and invest, you need to disclose your income to any relevant tax authorities and declare any interest earned on offshore accounts.

Costs

Some offshore accounts may have a monthly fee, or may charge for international transfers. Others don’t. For example, the HSBC Expat Bank Account has no monthly fee and transfers between HSBC accounts are free.

Other fees and charges may apply so you should read through the terms and conditions before opening an offshore account.

Eligibility

The amount you’ll need to deposit, or earn, to open an offshore account will vary.

To be eligible for an HSBC Expat Bank Account, you must have one of the following:

  • a minimum of £50,000 (or currency equivalent) held with us
  • a personal salary of £100,000 (or currency equivalent)
  • an HSBC Premier account in another country

 

And you must also be 18 or over, and reside, or be situated in an eligible country or region.

Security

Offshore accounts are not protected by the Financial Services Compensation Scheme (FSCS), which protects savings held with authorised UK banks and building societies, up to £85,000 per person.

However, some offshore accounts are covered by other schemes. For example, the HSBC Expat Bank Account is covered by the Jersey Bank Depositor Compensation Scheme, which offers protection for eligible deposits of up to £50,000. 

How can I open an offshore bank account?

Based in Jersey, HSBC Expat provides expat bank accounts with many of the benefits listed above.

Find out more about the HSBC Expat Bank Account.

Please remember that the value of investments, and any income received from them, can fall as well as rise, is not guaranteed and you may not get back the amount you invested. This could also happen as a result of changes in currency exchange rates, particularly where overseas securities are held or where investments are converted from one currency to another. We always recommend that any Investments held should be viewed as a medium to long-term investment, at least five years.

Whilst banking offshore may have potential tax benefits for you, tax rules differ from country to country. If you are unsure about your personal tax obligations, you should seek professional advice. It is your responsibility to ensure your personal tax obligations are met.

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