Why You Need An Offshore Bank Account
Offshore Bank Account: Overview
Opening an offshore bank account is perhaps the single most beneficial investment you can make to secure your assets, ensure greater privacy and increase your wealth. Accounts that are established in a foreign banking system give individuals a level of security through financial diversification that can not be found in a domestic bank.
Having a secondary account in a country outside of where you live gives you a safety net should your bank collapse, currency devalues, or if you are maliciously targeted by a legal suit. Many people open bank accounts overseas in order to find an alternative from there local domestic banking system. There are a number of benefits of offshore banking whether that’s protecting your assets and diversifying your portfolio to increasing your savings securing and having a plan B.
Whether you are a family man or a businessman, there are many reasons why an offshore bank may be a more reliable and secure institution than the local bank down the street.
7 Reasons Why you Need an Offshore Account
1. Financial diversification – reduce risk in having all your money in one bank, one account, currency, country etc…
2. Greater security in foreign banking systems – banks that have stronger banking policies, less risk-taking, less debt, more liquid, more capital reserve, and greater solvency are more equipped to protect your money
3. Confidentiality and asset protection – having a second set of laws that exist between you and your assets outside of the primary country where you live helps to shields you in case of legal trouble, court cases and creditor problems.
4. Higher interest rates – many offshore jurisdiction countries you can get upwards of 3-10% in places like Belize, India, Mexico, Seychelles!
5. Access to investment opportunities – there are many investment funds that are not available to US-based accounts and with an offhsore structure and account gives you access to a wider range of investment possibilities
6. Currency diversification – having assets in different currencies in different banks helps to diversify your assets just in case one economy or currency starts to crash
7. Lawsuit protection – if you are any type of professional doc, lawyer, accountant, business owner, and if you get sued, your assets frozen, court seizes your property etc…you have money outside the system for a ‘rainy day’
And that’s just a shortlist.
If opening an account is starting to have some appeal then the next question likely. Where should I open an account? While many countries around the world open foreign accounts to non-residents, there are a few countries that stand out.
Best Places to Open an Offshore Account
Offshore Banking Countries
#1 Cayman Islands – Best Investment Accounts and Funds – One out of every 3 investment funds are in the Caymans. It is consistently on the top ten financial centers in the world and is home to over 500 banks that are some of the biggest banks on the planet
#2 Switzerland – Best Accounts for the Wealthy – The country has a long history of offering offshore financial services with premier banking services in a jurisdiction that has long prided itself with some of the most private and secure banks in the world.
#3 Panama – Best Corporate Bank Accounts – Offshore company formation and account opening have been a large part of the country’s corporate landscape for decades, drawing investors and businesses to the country to take advantage of the financial environment that gives many incentives to foreign capital.
While this is just an introduction; ultimately the best place to open an offshore bank account is what is best for you and your unique situation as there are dozens of countries around the world where you can open an account.
How to Choose the Best Offshore Banking Jurisdiction
- Reputation – The reputation of the country or offshore jurisdiction plays an important role in determining where you are to find the best offshore account as it will make it easier down the line to deal with correspondent banks and in getting a merchant service.
2. Deposit Requirements – Many jurisdictions require certain minimums in order to open an account. Places like Singapore, Switzerland, Luxembourg usually have higher minimum deposits, whereas countries like Belize and Georgia can be opened with a few hundred dollars.
3. Requirements – Some important questions to bear in mind when finding a suitable country is whether the country a signatory of the Common Reporting Standard (CRS)? Other requirements to know is whether there are TIEAs? Also, what are the financial reporting requirements?
4. Remote Opening – Do you require remote opening? Or are you fine with traveling to the country to open an account? Countries such as Panama and Singapore for instance require in person account opening, whereas countries such as Belize or Nevis the entire process can be done remotely.
How To Open an Offshore Bank Account
In order to open an account in an offshore bank there are a few simple requirements such as:
- copy of passport
- proof of address
- bank statement
While this might get you a bank account in Belize, other offshore jurisdictions like Switzerland or Singapore have much more thorough Know Your Customer (KYC) Regulations and Anti Money Laundering AML procedures and as a result, they may ask for:
- professional reference
- banking reference
- business plan (if opening a corporate account)
The last half a decade banks have been much more wary in just accepting any person off the street. Banks in Singapore for instance will likely only allow you to open a bank account unless you have a local Singaporean company, travel in person to meet the bank managers, are able to submit a business plan with detailed reasons why you require a Singaporean account, deposit a six figure sum, and are patient enough to go through the long vetting process. Whereas other banks, in Nevis of Belize can be completed very quickly without much hassle with low minimums.
Step-By-Step Opening Process
- The right offshore jurisdiction
- Find the right bank
- Open the right type of account
- Get any other additional banking services
The bank takes all of the documents that are submitted and does a background check that can last a few days depending on the bank. They may or may not ask for more documentation, depending on the situation, the bank and the past history of the client.
If the application is successfully completed and all the documents were received the bank should have a reply within a matter of a few business days.
Is an Offshore Bank Account For You?
An offshore bank account is the most important step you can take to diversifying your assets. Do not wait until its to late.