Ben Todd | Apr 16, 2017 | 3
How to Open an Offshore Bank Account
Before considering an offshore bank account, ask yourself if you really need one. If you are planning to get an offshore account to hide money, then know that the US tax office has connections all over the world.
Also, even if your tax inspector cannot legally uncover your funds, the FBI, NSA and CIA can. Opening an offshore bank account is a lot of hassle, it can affect your credit rating, and it can make tax agencies consider your accounts with a little more scrutiny.
10 Legitimate Reasons To Set Up An Offshore Bank Account
Firstly, apologies for the header, but it is the title of most articles on the subject. Just because some people hide their money from the taxman abroad, it doesn’t mean that offshore accounts are principally set up to avoid taxes, just like how all sharing programs are not set up just to allow people to download pirate content.
Still, there are a lot of good reasons (beside hiding your money) to open an Offshore Bank Account:
Here are a few reasons why an offshore account may be a good idea:
[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”][+] Political protection
Governments around the world will target people with X amount in their bank accounts, so send the money abroad where they cannot legally get at it.
[+] Better banks and banking systems
Feeling screwed over by your bank? Most people are at some point, so open an offshore bank account with a foreign bank that has a good and honest reputation.
[+] Asset protection
People will have trouble suing you for money that you have stored in foreign accounts. The same is often true during divorce proceedings if one side cannot prove the money exists.
[+] Fraud protection
If you have $100,000 in one bank, then a fraudster may steal it all in one go. If you have $25,000 in Switzerland, $25,000 in Cyprus, $25,000 in the UK and $25,000 in the US, then you are far better protected.
[+] Currency diversification
Holding a certain currency in your local branch is okay, but expensive. Hold a currency in a country that primarily trades with that currency, and it is far cheaper.
[+] Getting paid with another currency
Maybe you are frequently paid with another currency and you are sick of paying massive fees to convert it. You may keep it in your account until you pay another company with it, or until the exchange and conversion rates become more favorable.
[+] Get more interest from your deposits
There are foreign banks that will give you a higher interest return for your deposited money.
[+] If you frequently holiday or live in another country
Converting your money whenever you go on holiday or go to another country to live may be expensive, so have your own bank accounts in the other country where you keep your money and/or add to it while you are in the other country.
[+] Give yourself a place to get out
If the banks pull another royal screw job, or if the government does something contrary to your own country’s interests, you will find it far easier to apply for citizenship with another country if you have had bank accounts there for a while that you have kept stuffed with money.
[+] Invest in businesses in other countries
If you wish to trade or invest in another country, you should probably set up a bank account within that country. It may save you a lot of money in the long run.
Consider your reason for opening an offshore account. You may not get the perks that you have read about.
Thinking You Have An Account When You Haven’t
Many US citizens have this problem when they try to open an account in Canada. They do it online, through the post, and/or in person with a bank that has branches in Canada. However, what they actually get is the US bank account that allows and stores Canadian money. It is only later that the US citizen realizes that he or she doesn’t have the protection or benefits of a Canadian account that he or she realizes he or she doesn’t actually have a Canadian account.
Double check to find out if you are opening an account within the actual country, and are not just signing up “for” an account for a country (specifically its currency).
Four Methods For Opening Your Offshore Bank Account
They involve visiting a bank yourself and setting up your account, opening your bank account online, using an intermediary service, and using another bank customer to help you get your account. All four are described here, along with their pros and cons.
Using An Intermediary
This is a company that helps people in the US set up an international bank account. The intermediaries are known as OSPs (offshore service providers). You approach them the same way that you may approach a stockbroker. You sign up with the intermediary company, and they do most of the work required to get you your international bank account.
You need to find a good and reputable company. The last thing you want to do is give your information over to a company that is stealing information. Even a seemingly reputable company may have employees that steal information, so you have to pick your OSP very carefully.
If an OSP won’t reveal which banks it works with, and/or if it won’t reveal “all” the banks it works with, then cease contact with the company, give them no further information, and block them where possible because they are scammers.
An OSP may also give a reference to a bank so that you may get an account. They have no obligation to do so, and you may have to find your own referenced. Nevertheless, they may say you have to be a paying customer before they are willing to give you a reference. If that is the case, then be careful, but also be aware that they may still be legitimate. Some companies do insist on giving references exclusively for paying customers.
Check how much the OSP is going to charge you for their service. There are some that charge extortionate fees simply because they know they can. They know that their consumer’s knowledge is lacking, and/or they figure that their consumer’s options are limited; ergo they charge a ridiculously high rate.
- Setting up an account is not difficult, but it is a hassle, and an OSP can save you from that hassle.
- If the OSP has a good relationship with the bank, they may be more willing to relax their entry rules.
- The OSP does the due diligence stuff so that you do not have to take an active role, and they will do some of the paperwork for you.
- The OSP may be willing to provide a reference if the bank you choose require one. The bank may also require an introduction, which the OSP should be able to give.
- There are plenty of scammers out there that are posing as OSPs in order to get your information. Even OSPs that do their job may keep, leak or sell your information, so be careful which company you choose.
- You do not have contact with your bank until your account is open, which may have a nest of its own drawbacks depending on the bank and what you are expecting compared to what you get.
- Each OSP usually deals with a limited number of banks, and none of them may be right for you.
- OSPs are expensive. If you do it yourself, you usually only pay courier fees, notarization, and starter deposits. With an OSP, you must also pay the OSP fee.
Find your preferred bank first, and ask them if they deal with an offshore service provider (OSP) that they can recommend.
Open an Offshore Account Online
Banks are far more open to the idea of people applying online these days, but there are many hurdles to jump if you want to get an account with a legitimate offshore bank. Despite the fact that doing it online seems like the easiest method, it is still tricky and very time consuming. In addition, it often takes a long time to actually get your account open and unrestricted.
Search out a legitimate bank and their website will offer an online application option. You have to be 100% sure that the bank is a real and legitimate bank, and that the website you are applying through is real too. You may be able to call the bank and start your application that way, but your phone bill will be tremendous.
They are going to require lots of proof of whom you are, and details about your earnings, citizenship, address and so forth. You will need notarized documents, and there is lots of paperwork to fill out. The hardest part is finding a legitimate bank, a legitimate website, and a bank that suits your needs and interests that take applications online. The rest of the process is easy by comparison as it is only slightly more difficult than opening a domestic bank account online, except that it often takes around three times longer.
- You do not have to pay other people, so it is cheaper.
- You send your details directly to a bank instead of through an intermediary, which lowers the chances of your information being used by fraudsters.
- You do not have to leave the comfort of your home in order to open an account.
- There are a limited number of banks that allow online signups, and the bank that is best for you may not have an online signup option.
- It can take three to four times longer than any other signup method.
- The due diligence the bank has to do is massive, which means more paperwork, more verification and more hassle.
Visiting The Bank And Doing It In Person
Most banks would prefer that you walk in and sign up for an account. The only problem is that signing up for an account with a foreign bank is going to require some travel. You will have to arrange your appointment beforehand. Give your new bank as much information as you can and try to get a feel for how likely they are to accept you and open an account for you. Do not simply make an appointment and assume they are going to give you an account.
Go online and look up the cheapest dates and times to travel. When you make your bank appointment, make it so you may take the cheaper travel options.
If you are willing to visit the bank, then far more are going to become available to you. There are a great many banks that simply will not accept new customers unless the customer turns up in person to open the account. There is also less due diligence to do. For example, you do not have to send a notarized scan of your passport because you can show it to them in person.
Call, make an appointment, take the correct paperwork/information, and pay the bank a visit. That is all you need to do in order to open your offshore account.
- You can be sure that the account you are opening is actually located and operated in the country of your choice instead of simply being a cover for a currency holding another based in your home country.
- Less paperwork and less red tape. They do not have to perform as much due diligence if you turn up in person.
- Applications are more persuasive in person and it may tip you over the edge so that you get your account.
- More banks will come available to you if you are willing to pay them a visit.
- You have to travel all the way there and there is still a chance they may say no and refuse to give you an account.
- Traveling or flying there may make your account opening a lot more expensive than if you had used an OSP or online signup.
Using A Friend
If you have a friend or business associate that already has an account with an offshore bank, then have them help you get an account. They may help you make contact with the bank, help you understand its services, and may help you with the paperwork. Also, if the bank is looking for references, then your friend may be able to provide one. Of all the options, this is probably the easiest in technical terms, but it has the proviso of having a suitable friend.
Your friend must have an account with a bank that you want and/or need, and your friend must be willing to help. You also need a friend that knows what he or she is doing with regards to the paperwork, and a friend that is willing to give a reference to the offshore bank.
- It will cost you less money than using an OSP, and there is less chance of you being defrauded by your friend.
- Your friend is unlikely to charge you for helping you open your new account.
- You are a better just as to if you should trust your friend.
- You may have a hard time finding a friend that is suitable and willing to help you.
- There is a chance that your friend doesn’t know what he or she is talking about.
Using a friend means an acquaintance or genuine friend you can trust. It also means communicating in person. It doesn’t mean finding somebody over LinkedIn.
What Documents Will You Need To Open Your Account?
Banks will differ depending on their policy and the laws of their country. Even if you give all of your details and do all of the paperwork, they may still refuse to give you an account, so adjust your expectations accordingly. Here are a few things you should probably expect.
+ A notarized copy of your photo identification such as your passport.
+ A notarized copy of one of your utility bills.
+ A notarized copy of one of your current bank account statement.
+ A reference from a current bank.
+ A reference from a professional or a person that already has an account.
+ Proof of income via account statements or pay slips.
+ Proof of wealth, investments and savings.
These are some of the more commonly requested documents. You will also have to fill out the offshore bank’s paperwork in order to open your account. If you are trying to open a corporate or business account, they may request a business plan and proof of your earnings.
The lower the account, the easier it is to get. Start with a lower easier-to-get account, and build trust before moving onto a business account with credit facilities.
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