Ben Todd | Apr 16, 2017 | 3
How To Open And Access An Offshore Bank Account
People move some of their money abroad for various legitimate reasons. The days of hiding your money overseas from the tax inspector are over. But, you can move your money abroad to help you invest in other countries, to set up businesses, to save with better interest rates, and to protect your money from people in your own country that may wish to seize your assets. For these reasons and more, you may decide to set up an offshore bank account, but how do you do it?
Each Bank And Each Country Is Different
Let’s get the obvious stuff out of the way first. Different countries are going to have different opinions of US citizens. Due to the heavy-handed* way the US government deals with tax evasion, there are many countries and banks that will not deal with US citizens. Your chance of success depends on your wealth, your business interests, your nationality (sort of), the country that the bank operates from, and the bank itself.
* The Obama government has messed up quite a bit, such as by adding 8 trillion to the US national debt, but being heavy-handed with tax evaders is a good thing. They used UK whistleblowers as an excuse to come down hard on tax evaders and the banks that had been allowing it to go on. It has made it infinitely more difficult for US citizens to get offshore bank accounts, but eventually the situation will calm down as offshore banks improve their due diligence and learn how to protect themselves better. Eventually, it will be business as usual.
It Depends On The Country
Each country has different International agreements and attitudes towards US investors and wealthy US citizens. For example, in Hong Kong, they do not want US money and you will have to set up a business or become a resident to get an account. However, in Switzerland, you will have to fill out forms for hours, get a letter of recommendation, and be able to prove how much you have and where you got it from in order to stand a slim chance of getting an account.
Each country is slightly different, so we have written articles on each country. Use this article as a general guide for opening an offshore account, and use the articles below as a specific guide for whichever country you choose.
Know the General Steps Require to Open an Offshore Account
There is usually a similar banking process you’ll need to go through when opening an offshore account. The exacts will vary depending on the country, but the basic steps remain the same. Read our guide to the steps to open an offshore bank account.
Think You Need an Offshore Bank Account? Read our Guide to Offshore Banking.
We cover in that article linked to above.
[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”][+] Legitimate reasons to set up an offshore account
[+] The mistake of thinking you have an offshore account when you do not
[+] What documents will you need to open your account?
[+] The pros and cons of using an intermediary (OSP)
[+] The pros and cons of doing it online
[+] The pros and cons of visiting the bank and doing it in person
[+] The pros and cons of using a friend
8 (Sneaky) Ways to Get an Offshore Bank Account
The hardest part about an offshore bank account…is to actually open said account. First you need to find a legit offshore account in a country that will accept you. You need to make sure said country is stable, the bank is legit and secure, and of course, you need to be able to open that account.
The opening of the account is sometimes problematic. However, here are
1. Getting A Letter Of Recommendation
If you get a letter of recommendation from your current bank, then some banks may be a little more willing to do business with you. The downside is that the letter of recommendation goes on record, which means people in the US may discover your offshore account. The IRS will already know about it, but local companies and people that are suing you may not know about your offshore account, until they subpoena the information on the letter of recommendation from your local bank.
Getting a letter of recommendation from a person of note may hold some weight with some banks and allow them to loosen their restrictions a little. A letter of recommendation from one of the offshore bank’s current customers may also hold some sway with foreign banks.
2. Using An OSP (Offshore Service Provider)
In some of our articles we suggest that using an OSP is a very bad idea. This is because some countries attract scammer that set up fake OSP companies to gain access to your financial information.
Using an intermediary company to set up an offshore account is probably something you should try after you have been refused via other application methods. You should also do a massive amount of research beforehand to check that your information will be kept secure because you will have to trust another company to apply to foreign banks for you, which often means handing the OSP your money so they may pay the initial starting deposit; tread very carefully.
3. Using A Bank You Are Already Registered With
Some banks operate internationally, and some banks own smaller banks in other countries, and/or have set up their own bank in other countries. If you already bank with one of these banks, you may be able to negotiate and open an offshore account with them.
4. How Much Money Do You Have To Invest?
The more money you have, the easier it is to open an offshore bank account. You will need to do as much as you can to prove that you have earned your money legitimately, and if you can prove your current income, you may stand a better chance of getting an offshore account (especially if your income is rather high).
5. Setting Up, Owning, Or Running A Business In Another Country
Some countries have banks that are biased against opening up accounts for US citizens. However, they may be quite willing to open up a business account for you if you are setting up or running a business in their country. If you are setting up or running a business in the US that trades with another country in a big way, then overseas banks in that country may be willing to open an account for you to make trading with the country a little easier.
6. Becoming A Citizen And/Or Residing In The Country
Some banks will insist that you reside in the country for at least three to six months before allowing you to open an account. Many will insist on proof that you have paid rent and utility bills in their country before they give you an account. Most banks will open an account for you if you become a passport/ID holding citizen or permanent/semi-permanent resident of the country. There are also some countries such as Hong Kong that will allow you to buy a semi-permanent residence where you are then able to open a bank account.
7. Working, Consulting/Freelancing, And Learning
If you are working or learning in another country and need to stay there for three months or longer, then some banks will take this into consideration and allow you to open a bank account so you may live there more easily.
There is also anecdotal evidence suggesting the same for freelancers and consultants. The stories suggest that people that trade with foreign companies and earn a good income are able to open bank accounts in the country so the foreign companies may pay them. Even though stories such as these are difficult to confirm, common sense suggests that if you have a foreign company were to recommend you to their bank and explain that they wish to pay you into the account–that the bank may be willing to open an account for you.
8. Paying Your Way In
You can buy a passport in some countries and become a duel citizen of the US and the foreign company. There are also some banks that will bend their own rules if you have enough money to invest, if you promise to maintain a large balance, if you are willing to pay large fees, and/or if you are willing to put in a very large opening deposit.
Country Specific Offshore Banking Guides
We’ve tackled opening offshore bank accounts in some of the major countries friendly to offshore banking. We can’t claim these guides will absolutely help you open your account, but they are a good overview start on how to proceed on opening an account in that country.
- How To Open An Offshore Bank Account In Switzerland
- How To Open An Offshore Bank Account In Hong Kong
- How To Open An Offshore Bank Account In Lichenstein
- How To Open A Bank Account In The Cayman Islands
- How To Open A Bank Account In Canada (as an American)
- How To Open A Bank Account In Belize
- How To Open A Bank Account In Singapore
- How to open an offshore bank account in the UAE
Need a Bank Account but have ChexSystems problems or Bad Credit?
Try opening a BBVA Compass Free Checking Account! BBVA is one of the more forgiving banks and may give you a full-fledged REGULAR bank account when you apply online...even with bad banking and credit history.
And if you don't qualify for the regular BBVA checking account for some reason, you'll then be given the option of opening the special BBVA Compass Easy Checking Account, an account designed specifically for those with banking problems.
...learn more about BBVA Second Chance Banking here