In the light of Panama Papers and the subsequent drama that erupted over them, it may be a good time to look for 10 best countries for offshore banking. After all, you don’t want your hard-earned monies to fall into the hands of the evil government, do you?
Despite popular notion, offshore banking isn’t a recent development. It was first established in 1815, after the Vienna Congress, when Switzerland gained their neutrality and thus opened its bank to the international money seeking refuge in their vaults. The USA joined the list of offshore banking locations in the late 19th century. British discovered the charm of stashing their money overseas in the 1920s, fueled by several courts’ decisions that allowed such behavior. In the years following the World War 2, the rest of the world followed suit. By the beginning of the 21st century, it seemed that everyone and their uncle had an offshore account, preferably on some exotic Caribbean island.
People use offshore banking for various reasons. The most popular is tax evasion, but money laundering or asset hiding are high on the list as well. Strictly speaking, these reasons don’t always have to be illegal, but their morality is often questionable, and political leaders that resort to these measures are often exposed to the public rage, as the Prime Ministers of Iceland and Ukraine, Sigmundur Davíð Gunnlaugsson, and Arseniy Yatsenyuk learned in the past week. It remains to be seen whether David Cameron will be able to avoid their fate. Strangely enough, Vladimir Putin, who is supposedly linked with some $2 billion stashed in Panama banks, seems largely unaffected by the fallout.
Unfortunately, writers on Insider Monkey don’t get paid enough even to consider an offshore account, let alone make one. Hence, we can’t tell you first hand which countries are the best for offshore banking. In order to do so, we had to resort to the old-fashioned research. We curated two lists, one made by Wolters Kluwer and other by Viva Tropical and came up with 23 countries. To narrow it down, we used the list of best offshore banks, created by Streber, a popular blog on the topic of offshore banking. Each country was awarded points for banks operating within its jurisdiction. Finally, we used Tax Justice Network’s Financial Secrecy Index (FSI) to determine the best countries for offshore banking. FSI is a tool created to determine which countries, through their banking regulation, offer tax havens to the rich and wealthy (and often criminal) elite. We decided that this is the most important factor, so most points were awarded in this category.
Without further ado, let’s see which countries are the best for opening an offshore account and stashing your rainy day cash (especially if you come from one of the top US cities for saving money).