People are sure going off offshore – it’s not a term many expats want to have their good names associated with, as governments in developed nations tar the words with a sordid brush.
Offshore was once a simple adjective meaning away from the coast or a seaward wind.
Then, the money men came and set up offshore – a dark and secretive place where deals were brokered and money was made in smoke-filled rooms beyond the reach of officialdom.
The British and US governments in particular have demonised offshore financial centres as places where their citizens consult lawyers and accountants familiar with the black art of tax management.
This all started with a meeting of representatives of the nations making up the Organisation of Economic Cooperation and Development (OECD) in Norway a couple of years back.
These countries, representing most of the world’s leading developed nations, decided too much tax was leaking out of the system offshore and something needed to be done to stem the flow.
Since then, offshore has become a dirty word associated with not paying tax.
Now, expats don’t like to keep their finances offshore, they prefer to just be expats with foreign bank accounts.
Since that meeting in Norway, governments have worked feverishly at plugging holes in their tax laws.
The US has the Foreign Account Tax Compliance Act (FACTA), Britain has signed up to swop financial information with the Internal Revenue Service and has squeezed the financial pips out of ‘offshore’ centres like Switzerland, Liechtenstein and the Channel Islands.
Nevertheless, offshore is a good thing for a lot of expats who obey tax laws.
Now, it’s more likely to be termed ‘wealth management’ or ‘expat finance’ and offers a wide range of bank accounts, investments and specialist pensions, like Qualifying Recognised Overseas Pension Scheme (QROPS). The lawyers carefully avoided offshore when they came up with that name. Read our QROPS page for the basics about this pension.
People just do not live or work offshore any more, unless they are on an oil rig.
Overseas workers are happy to be expats. Expat does not have the same overtones as offshore.
The trouble is the name may have changed, but an expat is still the same person living the same life as they did offshore.