CU-MBA-SEM-III-Globalization and Trade Agreements

existing gold offered on the private market, then the gold so acquired is said to have been monetized. No transaction in financial assets is recorded. Instead, the acquisition is recorded first as a transaction in nonfinancial assets, and then another economic flow is recorded to reclassify the gold as monetary gold. Demonetization of gold is recorded symmetrically. The numbers in parentheses after each classification category are the GFS classification codes provides all classification codes used in the GFS system. In the 1986 GFS Manual, seigniorage profits from issuing currency were treated as revenue. It is possible for loans and other financial instruments to be index linked and the same transactions would be recorded. [GFS] indicates mat this item has the same name but different cover-aye in the 1993 SNA. It is assumed that general government units do not operate life insurance schemes and do not purchase life insurance policies. The treatment of insurance technical reserves created by life insurance activities of public corporations is similar to autonomous pension funds, but they are not addressed separately here. Annex IV of the 1993 SNA describes the treatment of all types of insurance schemes. 5.4 OFFSHORE BANKING Offshore banking units (OBUs) refer to bank branches located outside of its home country, and handling transactions made in foreign currency (known generically as \"eurocurrency\") OBUs make it easier for individuals and businesses to bank internationally and establish offshore accounts. Definition of Offshore Banking An offshore bank is a bank located outside the country of residence of the depositor, typically in a low tax jurisdiction (or tax haven) that provides financial and legal advantages. Why Bank Overseas? Offshore banking provides a number of benefits that cannot be found in your regular domestic banking system. Additionally, diversifying your assets across different channels, countries, accounts and currencies helps to protect your money and reduces the risk of being left unprepared in case of bank failures, currency depreciation or economic collapse. Having a plan B is important in times of uncertainty and having a foreign account outside of the country, especially the United States, where you live is the first step to ensure your future financial longevity. Offshore accounts offer a wealth of opportunities as an insurance against the negligence of an irresponsible banking system that has overextended itself by having low-interest rates, poor capital reserves, mountains of debt practically making a majority of banks insolvent, together 101 CU IDOL SELF LEARNING MATERIAL (SLM)

with a system of banking governance and policymaking, together are all pieces of a broken system. Banking in an offshore jurisdiction reduces your risk while increasing your financial freedom giving you flexibility and protection of your assets. Many people recognize the importance of diversifying assets, but few people consider diversifying across different locations. Functions of an offshore bank Offshore banking is frequently considered as a type of tax avoidance and tax evasion in an ineffectively managed, dangerous environment; in any case, the website clarifies that offshore banking gives refined, stable banking guidelines. A fraction of offshore banking centres might be inadequately controlled, yet it is up to a potential offshore account holder or investor to build up accounts in jurisdictions such as Switzerland, Cayman or Channel since they give significant security. Elements of offshore banking incorporate asset protection, security and tax relief for business relations. Protection of Assets Offshore banking acts as a way to ensure assets for account holders. People who live in a politically or economically unstable country benefit from such security of properties. Many countries allow offshore banking to protect investors 'or account holders' assets, filling in as tax havens-offering min tax liabilities. Privacy An individual may build up an International Business Company (IBC) for offshore banking purposes. When the individual turns into an account holder at a bank offshore he isn't required to uncover his account proprietorship to his nation. This individual can build up an establishment, with the goal that the offshore company would be considered as a different entity- separate from the proprietor. Furthermore, an offshore bank ought to be opened in a bank other than the one in which an IBC is established. This separation empowers greater privacy and account security. Tax Relief When account holders earn interest on cash that is deposited in an offshore bank account, taxes are not deducted from the interest earned. A jurisdiction known for giving tax relief to account holders is Andorra; here just custom duties and local property taxes are included. Andorra does not have tax regulations for banking. At the point when an account holder conducts business in an exceptionally taxed nation, trading, and investments and licensing ought to be led in an offshore location, for example, Malta. At that point, continues ought to be transferred to an Andorran company. An Andorran company does not pay taxes; nonetheless, its jurisdiction necessitates that business activities be majority-owned by Andorran citizens. 102 CU IDOL SELF LEARNING MATERIAL (SLM)

The Ability to Act Quickly With regards to international diversification, it's in every case better to be a year ahead of schedule than a minute too late. When an administration has forced capital controls or levied bank accounts, it's past the point where it is possible to protect your money. If you don't as of now have one, you should open an offshore bank account now, regardless of whether it's a little one. Simply having one accessible, paying little heed to how much cash you put in initially, gives you significant advantages and benefits. It gives you the choice to act rapidly and transfer cash abroad later on, should the circumstance warrant it. Expand Your Freedom Having a foreign bank account gives you more choices. More choices imply more opportunity and freedom. It's a pivotal step in liberating yourself from total dependence on any one country. Accomplish that freedom, and it turns out to be troublesome for any government to control your fate. An Offshore bank gives indistinguishable service as an offshore bank does. It is an institution where funds are invested, and it also provides its clients with investment services. In order to open an account, people who deposit don't have to go face to face. Since offshore banks are located in a location that would require long travel times, they often open accounts that rely on certified identity and asset documentation of the individual. For large deposits, records could be set up by inland delegates located in the country of residence of the investor. Offshore Company with a Bank Account There are a few different ways in which one can go about opening an international bank account, as well as different account types, which we will briefly explore: 5.5 PERSONAL OFFSHORE ACCOUNT VS. CORPORATE ACCOUNT While it is possible to open up a private offshore account in your own personal name, it is generally recommended to incorporate an offshore company in a foreign jurisdiction and subsequently open a corporate account under the name of the company. There are a few reasons why this is recommended: 1. Corporate accounts are easier to open whereas personal accounts can be more difficult. In theory, it would seem easier to open an account in your own name compared to going through the additional steps of forming an offshore company, but in reality, having a corporate entity be the holder of the account allows for many advantages Established banks will generally have much stricter requirements for accepting a foreign individual as opposed to a company. You will likely need a great deal of documentation, 103 CU IDOL SELF LEARNING MATERIAL (SLM)

references etc. as well as a sizable initial deposit, and even then, there are no guarantees of being accepted. 2. A corporate account provides much greater protection and privacy. Opening an account in the name of an offshore company separates and dis-identifies you personally from the account. This means that your assets will be much safer and less open to unwanted attention. 3. There can be tax and income advantages. In many jurisdictions, companies that are structured in the right way can be eligible for reduced tax rates and rebates. It may also give you access to certain investment options that wouldn’t be as easily available to an individual, which can help maximize your returns. In most situations, it is best to go with an offshore company corporate route, although some rare circumstances may require opening a personal account. It is very useful to seek the right expert guidance to help you with the process of forming a corporate offshore account in your chosen jurisdiction and structuring it in the most advantageous way. Offshore Investment Account vs. Transactional Account Whether opening an account as an individual or through an offshore company, there are a number of different account types available, each with their own requirements and benefits. These different types of accounts can broadly be separated as investment accounts and transactional accounts. Investment accounts generally give one greater access to a wide range of investment and trading options. They have a complex structure, usually needing the formation of an offshore trust and a reliable investment manager or broker. They also require large opening deposits of at least USD 500,000 or more. They are ideal for high-value investors who want maximum returns and protection for their wealth and do not plan on having many transactions. Transactional accounts, on the other hand, are better for those who need to set up a smaller fund with a simpler structure. They operate similarly to orthodox domestic transactional accounts. While they do not offer the same range of investment options and premier services as large investment accounts, they are useful for those who want to have easier access to their funds, make regular transactions, and who are just looking to initiate their offshore plan with a small and simple account. They too can be opened both as a personal account and as a company, with the latter generally recommended. Opening an Offshore Account Remotely 104 CU IDOL SELF LEARNING MATERIAL (SLM)