The yachting industry has been increasingly global, and more and more vessels are purchased and sold on foreign shores every year.
As yacht operators try to expand their operations worldwide, a growing number of them are discovering the benefits of having an offshore bank account.
In this article, we’ll take a look at the best reasons why offshore banking has become so popular in this field.
Why Are Offshore Bank Accounts Popular in the Yachting Industry?
There are several key reasons why yacht companies are starting to adopt offshore accounts. For one, yachting is international and there is always cross-border commerce involved.
Whether you’re selling a ship to a foreign buyer, paying for foreign suppliers, or receiving profits from foreign charters, you need international banking.
Instead of the need to use local banks for international wire transfers and foreign exchange transactions that are often costly, an offshore bank account offers a centralized center for international financial operations.
Offshore banks know how to facilitate international business and can offer excellent foreign exchange rates for foreign currency transactions, which are essential for global yacht trading.
Another major attraction is offshore banking’s tax advantages. If business funds are funnelled into accounts in low or zero-tax countries, yacht companies may reduce their overall tax burden – we’ll touch on this further later.
Finally, offshore banks adhere to tight privacy and confidentiality standards. For the ultra-rich yacht owners that appreciate privacy, offshore banking from Jetonbank offers much more security than depositing big sums into a domestic bank account.
How Do Offshore Bank Accounts Help Yacht Businesses Save on Taxes?
This is among the main reasons why yacht firms set up offshore entities to avoid paying taxes. When business profits are channelled through accounts set up in tax-free countries, corporations pay virtually no corporation taxes.
Among the most popular offshore jurisdictions for yachting are the Cayman Islands, Bermuda, Gibraltar and the British Virgin Islands - all of which either pay no corporate income tax at all, or have a top rate substantially lower than the rest of the world.
A US-based yacht charter firm, for instance, makes $1 million a year. By transferring those profits to a subsidiary company based in the Cayman Islands, where corporate tax is zero, they’d avoid the full 21% US federal income tax rate — $210,000.
Though offshore gains are taxable when they are returned home, dividend payments should be paid at just the right time so profits can grow tax-free abroad for years.
Tax planning and using an offshore bank account will also allow significant tax savings in the long run.
What Currency Benefits Do Offshore Bank Accounts Offer Yacht Businesses?
Going international always places businesses at risk of losing money due to exchange rate volatility. This risk is even greater for yacht companies that frequently trade in multiple world currencies.
Jetonbank also ensures stability, since it allows firms to store funds in several major global currencies in the same multi-currency account.
Instead of jumping from account to account with local and foreign currencies, yacht companies can use the euros, dollars, pounds, etc. directly when dealing with foreign customers and suppliers.
With an international bank account, the currencies are exchanged at extremely low wholesale interbank rates. This offers enormous savings over expensive retail exchange rates imposed by the local banks.
Offshore banks even provide niche treasury services such as forward currency contracts that give corporations control of exchange rates for future trades and leave no room for currency fluctuations.
For yacht companies that receive regular foreign currency payments, these products can be invaluable in managing risk.
Can Offshore Bank Accounts Simplify International Yacht Transactions?
One of the greatest problems in distributing yachts internationally is financial transactions across borders.
Everything from paying marina fees to insuring overseas charters and transferring proceeds from the sale of a vessel between jurisdictions can be complicated.
A Jetonbank offshore bank account streamlines these activities. All in one account, multi-currency options and wire transfer support mean that businesses will now have a central point of reference for their international cash flows.
Instead of sending risky international bank drafts or incurring costly fees from local banks for wire transfers overseas, offshore accounts permit instant transfer between more than 150 countries at wholesale prices.
Payments are sent through the bank’s global correspondent network and do not involve hold time. And multi-sig authentications guarantee safety when sending high-value money.
Offshore escrow companies make it even easier for yacht owners to sell a boat internationally, as they place sales deposits from overseas buyers in a secure offshore account. It only sends money when certain objectives are achieved so you know that you are safe.
How Do Offshore Bank Accounts Enhance Financial Privacy for Yacht Owners?
Privacy and anonymity are, of course, top priorities for most yacht-owning aristocrats. But, in-country banks also face tighter controls over how their customers can be informed of their financial assets.
Banks offshore have a different philosophy: they don’t want to expose details. Accounts are easily opened anonymously, using corporate structures that hide ownership.
Closed-door privacy regulations also forbid banks from divulging information about accounts and transactions of customers without explicit permission. Financial operations are secretly kept away from the public and the tax authorities.
Many offshore jurisdictions even have legal provisions that protect customer identities by criminally punishing banks that violate confidentiality.
So, if you want the absolute best privacy and protection of your assets, offshore banking is simply unmatched by home-based banks.
As the yachting industry further reaches globalization over the next few years, offshore banking will continue to gain strategic significance.
For any company running regular international business, the benefits of low-cost cross-border payments, multi-currency accounts, tax savings and better privacy make opening an offshore bank account a simple choice.
For yacht businesses who desire such advantages, Jetonbank offers an advanced and convenient solution. As a licensed and authorised offshore digital bank, Jetonbank automates the process of opening an international bank account with a simple online application.
Clients are then given access to bilingual support and an advanced online banking platform geared towards global trade.
If you want to see how Jetonbank can enable your yacht business to survive in the new world of global yachting, visit Jetonbank or contact a representative today.
You’ll soon find out why Jetonbank is the offshore bank of choice for some of the world’s most prominent yacht charter companies.
