An Offshore Merchant Account defined
An ‘offshore’ merchant account is an internet trading account for e-merchants, which is established in a non-resident country. It allows the merchant to process online payments and allows other transaction processes.
The basis of an Offshore Merchant Account
Many internet based businesses, especially those in the high risk category face obstacles in opening merchant accounts especially through banks and domestic account providers.
Local banks are usually conservative and require merchants to furnish a number of documents and present a past credit history of transactions. This makes the merchant account procedure to be time-consuming and at times futile.
For such online firms, it is feasible to opt for an offshore merchant account.
- Local merchant account providers may not allow a high volume of sales and if merchants are aiming to increase their sales projections steadily they should opt for an offshore merchant account.
- An offshore merchant account will be discrete in its dealing and allows funds to be transferred anywhere.
- Offshore merchant accounts also provide tax as they will be based in countries where there are no tax liabilities.
Online businesses that are likely to benefit the most by opening an offshore merchant account include adult entertainment, Internet drugstores, casinos, sportsbooks, electronic cash, imitation products, tobacco items, travel-based, and biotechnology.