An offshore financial company (OFC) such as a New Zealand Offshore Financial Company (NZOFC) is commonly set up by those doing business offshore. An OFC is typically set up in order to reduce banking costs by those requiring international banking services. Because of the low capital requirements and low cost of setting up an OFC in a location such as New Zealand it is possible for a New Zealand Offshore Financial Company to gain substantial profits from its banking services.
Banking services of a NZOFC can include the following:
- Taking Deposits
- Certificates of deposit
- Checking and savings accounts
- International credit and debit card services
- Loan services
- Wire transfer services
- Trust account services
- Cash management services
- The issuance of financial instruments and guarantees
- Payment processing services
- Marketing of investments
- Fund management
There is no limit to how many customers the company can have, how much can be received in deposits, or the number of type of currencies in which accounts can be held. Customers can be from anywhere in the world. The one strict limitation is that the word “bank” cannot be used in the company name.
A NZOFC can take money for deposit so long as the company is independent of the depositors. The monies deposited can be used to buy securities such as bonds currently paying up to 4.5% with a lower rate being paid to account holders. So long as deposits are invested in securities registered with the New Zealand Revenue Service, the interest earned by account holders will only be subject to a 2% withholding tax when interest is paid. This requires that the NZOFC register under the Approved Issuer Levy.
Depending upon the limitations placed upon withdrawals a NZOFC can offer varying rates of interest, always set so that the company profits from the accounts.
With deposit monies locked in for longer periods of time a NZOFC will typically pay a higher rate of interest to savings accounts.
Certificate of Deposit
A NZOFC can set up CD’s much like any bank, paying better interest on longer terms and pairing these monies with investments in better paying instruments. As with other banks the NZOFC can levy penalties for early withdrawal sufficient to cover expenses.
Credit and Debit Card Services
A NZOFC and issue both debit and credit cards, charge for the cards, and charge interest on the outstanding https://exycasinos.co.nz/ for a credit card. A NZOFC can offer a range of debit card programs including the following:
- Dividend, Incentive, Forex payouts, Employers, Contract Agencies
- Membership based affiliation applications i.e. Credit Unions, Banks with an existing account holder base
- Loan, Benefit Payout Applications i.e. payday, micro loans operations
- Insurance payout program, Pension payout program
- Commission payout applications Network Marketing Organizations, Affiliate payout
- Travel, Remittance Card Programs
- Gas stations, Telecommunications, cellular phones companies, cable TV companies, department stores, supermarkets
- Gaming and gambling industry: casino sites, online poker rooms, sports betting websites, waging websites, etc.
Loan services are explicitly allowed in a New Zealand Offshore Financial Company. Interest rates are set by the company giving the company the potential for a substantial profit on well chosen and managed loans.
Wire Transfer Services
These are allowed in an NZOFC and are often a major reason that customers come to a New Zealand Offshore Financial Company.
Trust Account Services
A New Zealand Offshore Financial Company can offer trust services just as a non offshore New Zealand bank can.