31 Tips On Getting An Offshore Bank Account

Your country may become a tyranny. Or it may simply go bankrupt. Creditors or ex-wives may hound you for the shirt on your back. Digital currency can mean ‘no currency’ at the flick of a switch.

Having money abroad can be a life-saver. 

Here a tips on getting a non-resident bank account: 

Some websites offering accounts have ‘real-world’ businesses behind them and some are no more than a few web-pages and some guys in a back room. Most of these are *scams*, even the slick-looking ones. More and more banks are providing offshore bank accounts direct. Just get a list of banks in the country you’re concerned with, and go to their websites.

AVOID websites where:

• They offer a variety of dubious products – second passports, citizenships, anonymous debit cards;

• You can’t pay via credit card – it’s a good deal harder to get your money back with banker’s drafts, Western Union and e-Gold etc;

• The company address is a P.O. Box, or a ‘Suite’;

• The website is on a free web host;

• The site is badly translated into English;

• You have the sense you are dealing with Africans or Eastern Europeans;

• The website has not been updated recently e.g. the Copyright reads 2013;

• They’ve only been in business for a few years;

• They require you sign a confidentiality agreement, or you have the feeling you are entering illegal or quasi-legal territory.

My advice to you is to not go for offshore bank account websites which are short on information, especially about who, in reality, is offering the facility. Who owns the web site? Where is it set up? Just who, exactly, are you dealing with?

Bogus offshore banking sites can threaten to rat you out to your tax authority if you question their methods. It’s an old con trick; get the mark involved in something dubious, then he can’t go to the authorities.

There are three reasons for getting an offshore bank account.

First, taxation is less on interest earned on deposits.

Secondly, there will, or should be, no active onshore bank-accounts in your own country to affect your case for offshore classification with your tax body.

And, third, an offshore bank account ought to be strictly confidential.

Your own offshore company. It’s the body (corporation) in whose name your offshore bank account exists. You transfer funds to it, or it earns them direct. It exists in one location. You live in another. Your account can be in a third. You may avoid tax, depending on where you live. You have limited liability if somebody sues you, and the fact it’s offshore makes it harder. As a legal entity separate from you, it can own property, enter into contracts, or be sold.

Private offshore accounts are usually for wealthy people; you should have at least a minimum of $100,000 to deposit. Then you will be welcomed with open arms, after the necessary due-diligence has been carried out.

Due diligence means the responsibility to check that a person or company is who they claim to be, and that the have no criminal associations. You will have to provide a notarised copy of your passport (if applying by post), one or two bankers references, and a copy of a utility bill from your current address.

Potential paperwork: In addition to the Application Forms: For each signatory (Corporate or Personal account):

• Notarised copy of ID (Passport or Driver’s Licence);

• Original reference letter from a current banker, lawyer or chartered accountant;

• Original utility bill or similar showing the current address of the signatory.

Applying By mail? You get copies of ID papers stamped by a local notary public. A Notary is an impartial witness. A Notary Public is a public official empowered by the State to perform notarial acts. The notary is commissioned to issue an apostille.

You will need to prove your identity, and the legal existence of your company, if you want to open an account for it. If applying by mail, DO NOT PART WITH ORIGINAL DOCUMENTS. Get copies notarised by a notary public. Originals can be employed for identity theft or fraud. Or they can be lost.

Corporate offshore bank account: The following may need to be notarised. You get these after your offshore company formation: Board Resolution; Copy of the company’s Certificate of Incorporation; Certificate of Good Standing (if the company is more than one year old); Copy of Bye-Laws and Articles of Incorporation; Subscribers Resignation; Copy of the Resolution for Appointment of Directors. 

You might want an offshore Swiss account in order to:

• Expand your business;

• Minimise your taxation;

• Simplify business administration;

• Asset protection;

• Estate planning;

• Financial anonymity;

• Tax-free investing.

Those who engage in international or online enterprise and who generate a large tax exposure can lawfully ease their burden through an offshore Swiss account. Keep in mind that the Swiss government charges a 35% withholding tax on interest earned by accounts held by foreign residents. Also, cheques are not used in Switzerland. This is a nuisance if you’re used to dealing in them.

Offshore bank accounts are the same as your local bank account; just in a different country.

You can pay receipts from your offshore company into your offshore bank account, transfer funds into other accounts, such as a local bank account employed to pay daily bills and expenses, or cover any outgoings that you may still have in your country of residence.

Participating in international commerce is even simpler now because of the internet. Many businessmen have signed up for overseas accounts in order to manage their funds, protect their privacy, increase financial peace of mind and the tax haven advantage an overseas account can give.

Another benefit of using an overseas bank is the protection of your assets and the administration of your estate. Many countries’ law systems allow your assets to be litigated away and their administrations are keen on filleting people after they’ve passed on.

If you are resident on one place and doing business in others, there is some leeway for tax avoidance. It really depends on:Which jurisdiction your company is registered in;
Which country your money is coming from;
Which jurisdiction you’re living in;
Which country you have citizenship of;
Which country your money moves through
Which country your money ends up in.

WARNING: If you’re in receipt of money, goods or benefits from persons or enterprises in the country you are resident, you are liable for tax there, and no offshore bank account sleight-of-hand will get you out of it. You’ll leave a paper trail, and sooner or later the hammer will come down. 

Once the offshore bank account is established, the client is issued a bank card. He can then use the bank card to withdraw money and to pay for ongoing expenses. There are ‘free’ accounts provided as part of offshore company formation packages. Offshore account opening procedures only begin once an IBC or an offshore trust has been formed.

Tax havens provide tax benefits to residents or foreign clients, who use their facilities. They’ve set themselves up to provide banking to people who want to protect their assets. It’s the basis of their economies.

So what are the advantages of having an offshore bank account? The obvious one is tax avoidance; doing business where tax is legally not payable. Another is privacy. Most offshore jurisdictions have laws in place which guarantee your financial privacy.

Fewer reporting requirements. Some jurisdictions require that your offshore bank account information to be reported much less than others. There are also jurisdictions where your reporting your company data will be necessary only under unusual conditions.

One of the benefits of an offshore bank account is that it offers access to politically and economically stable areas. People who are resident in areas where there is corruption within the banking system, or where there is a risk of expropriation, or where bank officers could under pressure from criminal gangs e.g. Eastern Europe.

Because credit-cards give easy access to offshore funds and accounts in tax haven areas, this setup allows income to be concealed. Although it is not illegal to have an overseas credit card, the average individual does not require one, forming a reasonable basis for believing that some people use offshore credit-cards to evade paying US taxes.

Many rich businessmen choose to do business via an offshore internet bank account purely because of the security and privacy offered.

While some offshore banks report their customers’ income to other tax authorities, most of them do not, but this does not make the non-declaration of income, or tax evasion, legal, even for those offshore accounts that have an option to switch to alternative currencies if required by the client.

US citizens must pay tax on their worldwide revenues so the Internal Revenue Service has taken a few big steps to combat tax-avoidance schemes using credit cards issued by offshore banks. In brief, banks in some locations will not open accounts for US citizens, because they don’t want the bother. The USA is one of only two countries that taxes it citizens on money earned while working abroad; the other is/was Libya! The first thing is to find out whether they’ll accept residents or citizens of your country. For example, Swiss banks tend not to want American customers; they don’t want trouble from the IRS.

Opening an offshore bank account is like opening one in your high street; meet their criteria, and you’re in. The only difference is you’re not there in the flesh, if you do it by mail.

Offshore bank accounts and company registrations are just like their onshore equivalents; there’s no big mystery about them. If you want a company registration, contact a local formation agent, who speaks English, in the jurisdiction of registration. Then use another local agent to examine what the first one’s done. Open your bank account yourself.

I hope these few handy pointers will assist you in getting a worthwhile offshore bank account.