myths about offshore merchant accounts

The first word which strikes the mind when offshore merchant account is mentioned is suspicion. In reality, offshore merchant accounts are not bad at all. If a merchant’s business deals with escort services, outbound telemarketing, adult website, online pharmacy, online gaming, etc. then having an offshore merchant account is the best option. Regardless of what business a merchant does, it is always a better option to have an offshore merchant account. Emphasis is laid on the mentioned businesses since these are regarded as high-risk business by local banks.

There are several preconceived notions that people have with regard to offshore merchant accounts. It is a myth that it is of high risk having an offshore merchant account. Since the transactions are carried out with banks in foreign locations, people get suspicious opening this type of account. With the word “foreign”, people tend to associate terms such as hidden from public eye and anonymity. Hence, the first myth to be cleared is that an offshore account does not imply that it is a secret merchant account. It is just that the merchants can avail the privacy option. This clause holds true even with domestic banks as a level of privacy can also be kept when merchant accounts are opened with domestic banks.

Having an offshore merchant account is an easy answer to escape from tax obligations. Many merchants are allured with the fact that there will be virtually no taxes on the offshore merchant account if the merchant uses another offshore company to take care of the transactions made by credit cards. However, the truth is that the taxes can be held only up to the point where the offshore earned are not declared. A merchant must be careful of Internal Revenue Service or IRS, as it computes how much of taxes a merchant is liable to. One cannot set aside legally the taxes without the consideration of investment risks. This process is complicated and entails to legal action that will be taken by a financial consulting company. Hence the bottom line is that taxes are inevitable. Every citizen who works is entailed to the payment of taxes.

Hence, setting an offshore merchant account may seem a little tricky to most merchants. It is always advisable to have a good perspective before opting for offshore merchant accounts. It is best to derive services from merchant account providers. These providers are known for having a network which is well established in foreign countries. They also provide assistance is setting up merchant accounts. The merchant account providers also help in imparting knowledge about the internal workings of offshore merchant accounts. In offshore merchant accounts, the required opening deposit is lesser in comparison to other accounts. Also, it is easier to apply to these accounts and acquire them than the domestic accounts.

It is said that what is not known will never hurt. But, it is always better to have knowledge, and considering offshore merchant accounts, what is known will also not hurt.

Contact one of our helpful account representatives to assist you in the setup of a high risk merchant account or offshore merchant account for a high risk merchant.