Become an offshore banker in all but name

If you find that the idea of ​​being a banker appeals to you, consider an interesting option that the country of New Zealand offers you. If you’d rather be the banker than an offshore banking client, consider forming a NZOFC. This is a New Zealand Offshore Finance Company. What makes a NZOFC like a bank is that it can provide what are essentially banking services for customers anywhere in the world except New Zealand.

There are two very basic aspects of a NZOFC that distinguish it from a bank. First of all, a NZOFC cannot be called a bank and cannot be called a bank in any way. Second, forming a NZOFC is substantially easier and less expensive than setting up a bank in New Zealand or almost anywhere. Anyone from any nation in the world can form an offshore finance company in New Zealand.

A distinctive feature of a NZOFC from a bank is that it is an offshore entity. It can be legally related to other offshore entities in a number of beneficial ways. It may well provide its directors with privacy and asset protection options not available in traditional bank ownership.

What makes a NZOFC like a bank?

A NZOFC can receive deposits from its client. You can offer loans. A New Zealand offshore financial company can provide credit or debit cards to its customers and can transfer money internationally. Such a company may provide trust services as well as cash management services and may trade investments. A NZOFC can provide payment services to customers scattered throughout the world.

A NZOFC will not be called a bank

A New Zealand Offshore Finance Company is a hybrid institution that is not governed by New Zealand banking law. It does not deal with New Zealand residents as clients. Although an NZOFC offers what are essentially banking services to its customers, New Zealand law prohibits calling an NZOFC a bank or implying that it is a New Zealand bank.

A NZOFC is easier and less expensive to set up than a bank

A NZOFC has no capital requirements. Unlike a bank in New Zealand, a NZOFC is not under the governance of the Federal Reserve Bank of New Zealand. An NZOFC will establish a relationship with a correspondent bank in New Zealand that enables it to provide services not specifically provided for in the law describing how a New Zealand Offshore Finance Company will operate. The paperwork to establish a NZOFC is relatively straightforward, although it will be wise to obtain the services of a competent licensing attorney.

Potential advantages of forming a NZOFC versus starting a bank

Apart from the fact that it can be decidedly less expensive to form a NZOFC than a bank in New Zealand, there can be other advantages as well. These stem from the use of offshore solutions for asset protection and privacy concerns. A NZOFC may be an asset of other offshore entities. These include, but are not limited to, a New Zealand trust, a Panama private interest foundation, or an international business corporation from any of several jurisdictions. Such a comprehensive solution can be tax advantageous and can be used to protect the legitimate business practices of principals from the prying eyes of competitors. In a world where intrusion into the privacy of people’s private and business lives is common, an offshore solution that includes becoming a banker in all but name can be very attractive.