Ben Todd | Jun 2, 2017 | 1
How To Open an Offshore Bank Account In Canada as an American
As you may imagine, opening a bank account in Canada if you are a US is rather easy because of the close ties that US and Canada has. It is the same reason why US citizens find it so easy to open bank accounts in the UK, since the US and the UK have been allies for decades. The Canadian banks are still going to make you jump through hoops, but getting approval is usually guaranteed if you are in good standing with your current US bank(s).
In other words, if you typically find it easy to open an account in the US, then you will find it just as easy to open one in Canada. The biggest difference is that it takes longer and it involves more hassle.
Technically, any bank account that you open outside your home country is an ‘offshore bank account.’ Most people think of offshore accounts as bank accounts in exotic locales like the Caymans or Switzerland. But if you live in the US, opening a bank account in Canada is technically an offshore account, though it’s not exactly a place you see out as a tax haven, being so close to the US.
The Fun Thing About Canada That Works Out Well For Americans
Canada is a big place and it has many banks. It is also a place you can drive to or take a short plane trip to. Many banks will only give residents a bank account, but the fun thing is that many US citizens are allowed accounts with these exclusive banks. It is easier to gain temporary residency within Canadian than it is within other countries if you are a US citizen. For example, you may have a permit/visa/card for temporary residency for up to six months as a traveler, or one that lasts for years if you are studying there. Take the permit/visa/card to the bank with you and they will often give you an account. There are even some that will give US citizens an account if they can prove they are going to school in Canada or are working in Canada.
Can You Apply From Home?
If you want to apply for, and open, a bank account in Canada without actually visiting, then you need to use HSBC or the Bank of Montreal. There are smaller banks that “may” allow you to apply online, but Canada is mostly dominated by five banks, and only the Bank of Montreal will allow you to apply without visiting a branch. The five biggest banks in Canada are:
BMO (Bank of Montreal)
TD Bank (Toronto Dominion Bank)
ScotiaBank (Bank of Nova Scotia)
RBC (Royal Bank of Canada)
CIBC (Canadian Imperial Bank of Commerce)
All of these banks will accept and clear your checks from the US without charging extra fees. They often have a longer hold period, but you can always do a wire transfer if you want a quicker transaction. All five have branches littered around Canada, and all of them accept US dollar cash in bill form.
Working With HSBC
If you have a HSBC account in the US, then they are *very likely to approve you for a HSBC account in Canada. You may need to pay a visit to a bank in Canada, but it depends upon what type of account you want. Many US citizens are able to march down to their local HSBC bank and open up a Canadian account from there.
The good thing about speaking to somebody face-to-face is that you can make it clear exactly what you want. You can fully explain the functions you require on your account and why you want the account. You can also make sure that the account is a genuine Canadian account, and not a US account with a Canadian dollar account.
* In 2015, HSBC were exposed for willingly allowing people avoid taxes. They are now under close scrutiny, which has made it more difficult for foreigners to open accounts in new countries with HSBC.
Working With BMO
You can open an account with BMO without visiting, but it is only if you are planning to visit the country for an extended period of time (we are not sure how long that is). You are able to set up the account online by filling out a bunch of forms and getting your lawyer involved. You are then able to wire a single lump sum to the account. You are only able to withdraw the money and fully activate your account once you are in Canada.
The RBC bank has a similar program for people that are immigrating into Canada. They allow you to set up an account while you are in the US and wire money into it, but you are not allowed to withdraw your money or set up a fully working account until you have actually moved over there and settled.
Working with TD Bank
TD (full name TD Canada Trust) is a Canadian bank that’s also branched into the US. If you have a TD Account in the US, you can also easily set up a TD Canadian bank account as well and view and make transfers between accounts online. However, you can’t access your Canadian bank account from a US Branch and vice versa (though you can do it online, if you call TD’s Cross Border support).
Why Bank in Canada?
Canada is the baby seal clubbing capital of the world that has the 2nd lowest crime rate of any country* because it is too cold to go outside and mug somebody. If you are itching to set up a bank account in Canada, then you are probably going to have to pay a visit to a branch location.
* Vatican city is the country with the lowest crime rate on earth.
Call ahead of time to arrange an appointment. Get an appointment and ask them what you need to bring in order to open and activate your account with just one visit. Tell them that you are a US citizen and that you are going to visit in order to open a Canadian account. If you are worried about your eligibility because of your current banking record, then mention it to the advisor and inquire as to how worried you should be with regards to your account being denied.
What ID Do You Need to Open a Bank Account in Canada
You will need to bring two forms of identification. Since you are a visiting in person, you will not need to take notarized photocopies of your documents because you can take the originals and the bank can photocopy them while you are there.
Here is a short list of the things you will probably need and/or that may be acceptable:
[fusion_builder_container hundred_percent=”yes” overflow=”visible”][fusion_builder_row][fusion_builder_column type=”1_1″ background_position=”left top” background_color=”” border_size=”” border_color=”” border_style=”solid” spacing=”yes” background_image=”” background_repeat=”no-repeat” padding=”” margin_top=”0px” margin_bottom=”0px” class=”” id=”” animation_type=”” animation_speed=”0.3″ animation_direction=”left” hide_on_mobile=”no” center_content=”no” min_height=”none”][+] An employment ID with a signature and a photo
[+] A driver’s license that has a signature
[+] A state issued ID
[+] A foreign driver’s license that has a photo
[+] A US Employment authorization card that has a signature, expiration date and photo
[+] A College ID that has a recent photo
[+] A legitimate alien registration photo ID
[+] A permanent resident card that has a photo
There is also a good chance they will want proof of your current address, which usually means bringing your utility bills and bank statements from your US bank. If you do not have a bank account and/or cannot get a US bank account, then you may have trouble getting a Canadian bank account. This is the sort of thing you should discuss with the Canadian bank when you call to make your appointment.
Are There Benefits To Opening A Bank Account In Canada?
If you are starting a business in Canada, or you are planning on making money on Canada, then a bank account is recommended. If you are planning to make repeat visits to Canada, then a bank account is a good idea. If you are going to live over there permanently, or for a little while, then life is easier with a Canadian bank account.
If you make numerous trips to Canada each year, then having money in your Canadian account may help you save on conversion fees and the hassle of converting your money.
It is possible for you to protect your money and assets from domestic threats within a Canadian account. For example, local creditors, people that want your money, and fraudsters may be unable to get their hands on your money if it is in Canada and they do not know about it.
There are also wealth-building benefits, such as when Canadian banks offer better interest rates than US banks, or better lending facilities than US banks. You may also like to save money in Canadian dollars and wait until it has a favorable exchange rate in US dollars.
Can You Use a Canadian Bank Account as a Tax Haven?
Don’t think about it. US and Canadian banks have close ties. As an American, you won’t be able to easily stash your cash in Canadian banks to avoid to IRS. If you want to try and hide money from the tax man (and we don’t recommend it — at least, not without some professional help and an acknowledgement of all the risks you bring if you try), you are best off with looking at foreign offshore accounts like Belize, Lichtenstein, the Caymans, or some other such account.
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But Canada is not that sort of place.[/fusion_builder_column][/fusion_builder_row][/fusion_builder_container]