Is it worthwhile to open an offshore account?

[chnlong]

Moving to HK from the UK, but need to keep some savings in the UK. Is it worthwhile to open an offshore account, e.g. HSBC channel islands offshore account? Or I should simply keep my current UK account then open a HK account?

I heard that it is much easier to transfer funds to and from different countries using an offshore account, and there is no tax. Correct me if I am wrong.

[MovingIn07]

I have an HSBC offshore account and also a UK account, I don't think there is much difference in tax as I have to recall signing a document when I opened the account saying they could give details to the relevant tax authorities. Luckily I'm not taxable in the UK so it makes no difference to me. In terms of transferring funds there is no difference to me (I'm Premier, do it all by GLobal View which is free and instantaneous); might be slower/more expensive for other accounts.

The advantage of an offshore account in HK is that they actually have an office here in HK, so if you want to talk to someone about your investments you can speak to a real person, whereas the UK office is, obviously, in the uk! That's about all.

[bdw]

I would just open a HK multimoney account. You can maintain a balance in both GBP and HKD and it's not difficult to transfer between accounts and overseas online.

I have no idea if there are any real benefits of an 'offshore account'.

[bdw]

By the way, dont be a sheep and have a look around at some other banks too. There are some real and tangible benefits that other banks have over HBSC, but expats seem to be blind and still go to HSBC anyway.

For example, Standard Chartered bank offers better exchange rates than HSBC at all times. The GAP between their TTB and TTS rate for all currencies is smaller than HSBC's.

To me, this is something that is real and tangible. Not all this marketing crap that HSBC floods my inbox with all the time trying to get me to join their premier, interest free loans (with massive handling fees more than typical interest rates) etc.

[fth]

If you are living here you will definitely need a HK account to receive salary and pay for day to day expenses.

Whether you need an offshore account depends on how much cash you have, what you want to do with it and how long you intend to away from the UK.

[chnlong]

MovingIn07, bdw, thanks for your advice, very useful. I'll certainly consider Standard Charted.

The reason that I was thinking offshore account is their convenient online international transfer function. My current UK bank only allows me to instruct an overseas transfer by telephone; and it takes 2 to 5 working days to arrive even within the HSBC group. They charge £10 fixed fee per transfer.

fth, I intend to relocate to HK permanently, at least before I reach retirement age. I will have some money after selling my current UK house. Because of the current low exchange rate, I was thinking to keep most of them in GBP, so need some measures to keep their value yet to be flexible enough for me to access if needed in HK.

[drumbrake]

MovingIn07, bdw, thanks for your advice, very useful. I'll certainly consider Standard Charted.

The reason that I was thinking offshore account is their convenient online international transfer function. My current UK bank only allows me to instruct an overseas transfer by telephone; and it takes 2 to 5 working days to arrive even within the HSBC group. They charge £10 fixed fee per transfer.

fth, I intend to relocate to HK permanently, at least before I reach retirement age. I will have some money after selling my current UK house. Because of the current low exchange rate, I was thinking to keep most of them in GBP, so need some measures to keep their value yet to be flexible enough for me to access if needed in HK.

I'm another partial fan of Standard Chartered. The small queues are another advantage.

Also, in Hong Kong it is very easy to open foreign currency accounts - GBP, EURO, US$ and others. So, you can have your GBP in your HK bank account. If the GBP strengthens, you can exchange it is you want, again very easily.

[fth]

OK chnlong, won't go after you about holding cable, nonetheless, my view of having a Jersey/Guernsey/Gibraltar account is this.

1. The banks sell these like underpowered BMW's, they sell status rather than substance, and often a local solution (UK&HK) is better. Going with the car analogy, why are there so many VW's around?

2. HK is an offshore centre itself, there is no capital gains tax, neither tax on dividends, nor tax on renting your UK house. Why pay more fees?

3. The local offices of offshore want to sell high margin product and that's about that. There is a big game here in selling life insurance wrapped mutual funds and buy to let mortgages. You can get both here with the local and offshore branches.

<EDIT> FORGOT TO MENTION THE REGULATORS IN OFFSHORE ISLAND JURISDICTIONS GIVE YOU VERY LITTLE PROTECTION <END>

[chnlong]

fth, thanks, very useful advice on the offshore account. I guess I will just open a HK local account once I arrive there.

drumbrake, thank you too. I will definitely consider the Standard Chartered.

Cheers guys.