Incorporating an offshore merchant account into your online business is a process anyone who makes income online should consider. Currently little is known about this niche financial tool within the USA. The fact is though, not only can offshore merchant accounts be found that are completely up to par with their domestic counterparts, but they can also offer a number of benefits that can make their use even more appealing.

Next, we'll explore a few of the advantages of offshore merchant accounts in the hopes that the information may prove profitable to our fellow internet marketers.

1. Protecting Your Income

When talking about "going offshore", asset protection andlegal tax reduction are the first things that usually cometo mind. Acquiring a merchant account in an a low or no tax jurisdiction outside of your own borders can help you accomplish both of these things legally and securely if arranged properly.

Plenty of countries outside of the U.S.A. have anequivalent level of technology and banking infrastructure. Furthermore though, there are a number of these countries that are also much more tax friendly and privacy friendly than current laws allow for American banks to be.

Selling your products, services or subscriptions via an international merchant account and receiving the payments through an offshore corporation into an offshore bank account can legally cut down on your tax burden and put more money in your pockets.

2. New Businesses

For the new online business, procuring a domestic merchant account can often be difficult. Your chances of being accepted for a domestic merchant account are at the mercy of many factors, including your credit history, the type of business you are running, your business plan, funding and more. Furthermore, a domestic merchant account provider can require a large up-front security deposit if you are a new business.

On the other hand, many offshore merchant account providersare considerably more entrepreneur friendly and are muchmore likely to accept a new business for a merchantaccount. On top of this, there are legitimate offshore providers who will set up your account without requiring a large deposit. Although the discount rate will invariably be higher, this can still be a better option for the new business where cash flow is important from the start.

3. Expanding Your Business Globally

Whether you are a new or established online business,expanding your customer base globally is an excellent wayto increase your bottom line. Utilizing an offshoremerchant account can help you achieve this in a couple ofways.

For one, there are plenty of international providers whowill allow you to accept not only Visa and Mastercard, butalso credit cards commonly used outside the U.S. such asJCB, Switch, Maestro and many of the debit cards common in Europe.

Furthermore, since your offshore merchant account can be integrated with an offshore banking account, you can accept funds in multiple currencies. Your customers can be presented with prices in their local currency and pay in their local currency, making it more convenient for them and therefore, more profitable for you.

4. "Sin" Businesses

Let's face it, despite the ideal of pure capitalism that America claims to be all about, the truth is another matter. Just try getting a domestic merchant account if you are operating an adult website! Banks will claim that high levels of chargebacks and fraud are the real reason they won't grant merchant accounts as easily for these types of businesses. Considering their profit potential and the fact the higher risk accounts can be balanced off with lower risk accounts, that defense doesn't quite hold up.

Fortunately, for those who have seen where the big moneylies in online business - online gambling and onlinepharmacies for example, there are plenty of countries that aren't run by a "moral majority" that will be more than happy to consider almost any type of business for a merchant account.

5. Other Considerations

As you can see, there are many reasons to look into settingup an offshore merchant account. You can find an offshore merchant account to suit almost any situation, be it integrating it into your online shopping cart, accepting payments for recurring subscriptions or making sales of downloadable products. Many offer easy online access and administration too.

Keep in mind though, discount rates tend to be higher for offshore merchant accounts - upwards of 6% as opposed to 2-3% domestically. Also, depending on the type of business and other factors, the hold back amount may be higher. Both of these factors are small prices to pay considering the benefits though.

When comparing offshore merchant account providers, be sureto take these points into consideration. Ask plenty of questions and make certain to get recommendations from current customers. Do your due dilligence and always consult your lawyer or financial advisor before taking any action.

Contrary to what you might have come to believe (much tothe benefit of domestic banks), there are plenty oflegitimate providers of offshore merchant accounts. Coupled with the multitude of profitable and protective benefits that many offer, all internet marketers and online business people would be well advised to explore this financial tool further.

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