In the past, most people viewed offshore banking as a way for UHNWI to hide their money from tax authorities, and honestly, that stereotype still continues to some extent today.
However, thanks to globalization, offshore banking is following suit.
On one hand, offshore banking is becoming more accessible to users, and increased transparency has weeded out shadier actors that put your money at risk.
On the other hand, this drive for regulation has also made banking privacy is just about dead.
Most of these problems come from two acronyms, FATCA and CRS.
FATCA – the Foreign Account Tax Compliance Act – is a US law that forces non-US banks to provide information about their US users, whereas CRS – the Common Reporting Standard – is a global reporting standard that allows tax authorities from each country to access information about their taxpayers.
Although both FATCA and CRS are information sharing standards used by governments to track citizens’ use of offshore banks, CRS casts a wider net that affects more persons and jurisdictions than FATCA only linked to the USA.
