8 of the most important rules about how to open an offshore bank account

Updated on 24/12/2020

Choosing an offshore bank is a complex and serious process. Being too easy minded can be an hazard providing big business problems, including impossibility to develop any business and facing huge fines and penalties.

1.Type of business you intend to operate

The business you intend to operate through the offshore account as offshore banks do not accept  illegal businesses, adult, gambling (without a license), online pharmacies (without license in the jurisdiction of the bank and financial services or currency exchangers with out a license.

So the first thing you need to do is to assess your needs.

What type of banking services do you need?

What will your account be used for?

If you are accepting direct deposits from customers from Europe, they will likely appreciate it if you have an IBAN. Do you need some type of card product? Credit card, debit card – maybe both? Are you looking for a current account or perhaps savings, maybe even investments or trade? How much money do you have set aside for initial deposit?

Once you have a clear picture of your immediate as well as future (as far as you can plan) banking needs, it’s time to head over to the next step, which is to determine a suitable jurisdiction.

2. DO IT YOURSELF ?

Very few banks actually require an intermediary but he can easily facilitate your application and  help convince the bank to take on clients that they would be reluctants, such as start ups  or high-risk business.

The professional can help you fill out the application form, advising about how to present a company overview in a positive manner. Using an intermediary is costly but greatly increase the chance of success.

Do you need a bank in a specific region? How important is political stability? Political freedoms? Taxes? Consider everything from the political situation to climate to stability of the jurisdiction. Does the reputation of the jurisdiction matter to you?

Different jurisdictions offer different degrees of banking secrecy. Also consider if the jurisdiction has any relevant double taxation agreements (DTA) or tax information exchange agreements (TIEA); MLAT or the new OECD Automatic exchange.

3.DOCUMENTS REQUIRED

Personal Accounts

Proof of identity, usually a passport but any photo ID should be sufficient, athough this depends on the banks.

Recent utility bill as  proof of address may be required. Banks usually ask for a utility bill, bank statement, credit card statement not older then 3 months

Some banks may ask for a bank references. The most common is a reference from your local bank. Most banks  write these references for free.

Sometimes, a professional reference may be requested. This would be a reference from a lawyer, accountant, doctor, or person of other licensed and regulated, reputable profession. It’s often asked that the relationship span a certain number of years. This type of reference can be challenging to procure, which banks are well aware of and will often waive the requirement if the rest of your application looks good.

Corporate Accounts

For each director and or shareholder, the bank will require the same documents as mentioned above under Personal Accounts.

If nominees are involved, the bank will require documents for them as well.

The documents usually required for the company,  are :

• Certificate of incorporation to prove that the company is incorporated.
• Article of association and/or memorandum of association, which is a document that specify company structure and powers/rights for each member/director.
• For companies that have been incorporated for some time (as determined by the bank’s application policy), a Certificate of good standing may be required to prove that the company has payed all registry taxes and has not been strucked off.
• Certificate of incumbency which may list the company’s members, shareholders, directors, officers, and other officials. The purpose of this certificate is to prove who is allowed to sign agreements on behalf of the company.
• For start up also a business plan.

For offshore companies that use bearer shares

in many cases the bank will require those shares to be deposited on their premises or at a licensed fiduciary institution to prevent a change of ownership without being notified. There are also banks that as a company policy do not accept companies formed with bearer shares. Each entity has its own policy in terms of documentation and requirements.

After the attacks of September 11 in New York, various measures to fight money laundering and financing of terrorist networks were taken. The controversial Patriot Act, which was approved by the United States, was a major curtailment of the privacy and civil liberties of the citizens of that country.

But also in the rest of the world, including offshore banking, the pressure of the United States and of international organizations like the OECD and especially the FATF has made virtually all financial institutions implement the KYC (or “know your customer”) and “due diligence” rules. These policies basically consist of identifying correctly all bank customers, checking the origin of the funds deposited and the reasons for wishing to open an account.

4.Company AND bank account

Here are some examples of  minimum deposit  requirements:

• Cyprus banks from 300€
• Seychelles bank 1,000-,5000$
• Caribbean banks 500 – $
• Belize banks 1,000-2,000$
• BVI Bank $100,000$
• Latvian banks 500-1,000 €
• Liechtenstein banks 50.000-100.000$
• Swiss on-line banks 0$
• Swiss private banks $5000-100.000$
• Swiss high net worth banking  $1-2M
• Andorra Banks 100,000$
• Principality of Monaco banks 100.000$-1M
• Singapore banks $30,000 to $100,000
• Dubai banks $10,000 – $100,000

The actual process to open an offshore bank account is realtively easy and we can help you through it all.

8. THE STEPS IN THE PROCESS

1. Prepare all the required documents
2. You or your intermediate complete and sign the bank account opening forms. Be careful about what you write, that why you should use an intermediary.
3. Return all the documents via COURIER to the offshore bank

There are a great number of considerations when selecting a formation agent and offshore bank account. We encourage you to contact us to discuss your needs prior to forming the corporation and or opening the bank account and we can advise the best option for you.