Bank Of Asia Launches Fully Digital Offshore Banking From a Tax Havenby Fintech News Singapore July 19, 2018
Bank of Asia, a fully digital cross-border bank, will be having its official launch in the British Virgin Islands after being awarded the only banking license in the territory within two decades by the British Virgin Islands Financial Services Commission.
The launch ceremony is set to happen today in the virgin islands with Premier and Minister of Finance Dr. the Hon. D. Orlando Smith, OBE in attendance, among other eminent banking figures.
Bank of Asia opened its online platform to clients starting from the 11th of June, and is actively onboarding more clients.
While the bank is based in the virgin islands, specifically Tortola, its digital services are available across the globe as long as one owns a smart device or a computer. The Bank of Asia was set up specifically to cater to the growing demands of offshore companies, as well as set up trusts and offer services to ultra-rich individuals and families from across the world.
To support this function, transactions can be executed online 24/7.
The entirety of Bank of Asia is built on technologies provided by Oracle, Avaloq and Saxo, which they claim helps reduce transaction time and cost for their clients.
The bank’s goal is to service Asia’s high net worth individuals, and associated global offshore companies. Bank of Asia claims that there are approximately 2 million offshore companies, many of which are incorporated in the virgin islands. Of these, the bank observes that more than 40% of all offshore company owners are located in the Greater China.
The Good and the Bad of Offshore Banking
It is no coincidence that the British Virgin Islands are known as one of the tax havens of the world. Companies incorporated there are not subject to corporate tax, capital gains tax, profit tax, and many others perks that increase the area’s appeal.
Between the high profile exposés of the Panama Papers and later the Paradise Papers though, the act of offshore asset storage may be associated with secret deals and an attempt to hide assets from regulators.
Tax evasion is one of the phrases that are now synonym with offshore accounts thanks to the aforementioned scandals.Of course, you can’t paint all offshore accounts with the same broad brush.
In fact, Bank of Asia seems to in part, attempt to counteract offshore banking issues by instituting “robust quantitative analytics” in Know Your Customer (eKYC) and anti-money laundering processes.
Despite its association with criminal activity, tax havens do have their non-illegal perks.
For corporations, a relatively stable or democratic government allows them to better prepare for and adhere to regulations. Offshore accounts also allow corporations to keep sensitive information like their cashflow and status secret from competitors.
Individuals, meanwhile, could appreciate more favourable tax rates, and some may appreciate the privacy or in certain situations, a more stable government or currency.