New! How to Open an Offshore Bank Account (revisited)
Here I will go through how to open a an offshore bank account and whether it’s worthwhile to pay someone for it.
Do It Yourself or Use an Intermediary
Going through an intermediary or offshore service provider (OSP) can have a few benefits, such as:
- If you used the OSP to incorporate, they will often handle most of the paperwork for you and all you need to do is fill in the application forms and provide whatever due diligence the bank requires; usually notarized copy of your passport and a utility bill or bank statement as proof of address.
- Many banks, especially in the Caribbean and South and Latin America, require a reference. In some cases, the OSP can provide the reference.
- Some banks require introducers and will as such only open accounts through OSPs or other trusted person.
- In some cases, the OSP has such a good relationship with the bank that the KYC procedure is more lax.
However, there are a few drawbacks to consider:
- Limited selection of banks. An OSP usually only deals with 10 – 20 banks, none of which is necessarily the truly best for you.
- It costs more to go through an OSP than to do it yourself. Typical cost for bank account varies from 300 to 1,000 USD/EUR. Doing it yourself can cost considerably less, since your only expenses are notarization and courier fees.
- Your documents never end up in the hands of an oftentimes unregulated OSP.
- You have no contact with the bank until the account is opened.
There is no easy answer to whether you should do it yourself or pay your OSP to do it. Whatever you do – make sure you take an informed decision. Ask the OSP what banks they work with and then look into what services those banks offer. Consider what services you need. Do you need a credit card or is a debit card enough, if any card at all? Does the bank offer cards that you can use where you live? Can the card be used online, in a store, and/or in ATMs? Do you require multi-currency accounts? Does the bank issue loans to offshore companies?
It is a huge red flag if the OSP will not reveal the banks they deal with. There is no legitimate reason to keep it secret. Customers are becoming increasingly aware of this and OSPs are opening up.
In some cases, an OSP may state that in order to recommend a bank for you, you must be a paying customer. This is perfectly legitimate as you are then paying them for their time and knowledge.
Doing It Yourself
If you decide to open your offshore bank account yourself, you need to understand which banks are available and suitable.
Below is a table of common offshore jurisdictions and some banks that open bank accounts directly with you for offshore entities and without visiting the bank in person. These are the banks most OSPs work with.
[ws_table id=”1″]As you may see from this table, there are very few Cypriot banks. This is because banks in Cyprus almost always require an introducer; one of few jurisdictions where this is such common practice.
Visiting the Bank
This is something I highly recommend if you are serious about your business and, of course, can find both time and money to do it. For small businesses, it might not be feasible to fly all the way to the bank – at least not initially. Remember, even if you start with something simple like a bank account in Belize, you can open another one later when your business has grown.
There are two distinct advantages with visiting your offshore bank in person:
- First, it establishes a human relation between you and the bank. This can be very important.
- Second, it vastly increases the number of available banks, primarily throughout Asia and some places in Europe and Central America. Many banks here simply will not open an account unless you are the bank in person.
- Third – as a bonus – it may reduce the due diligence and documentation required. You are considered a lower risk to the bank if you meet them in person. For example, you will not have to provide a notarized copy of your passport. You simply show them the original.
The cost of visiting the bank may be lower than or very close to the price an OSP charges, especially if you consider that you will not have to pay notary and courier fees.
Documents Required to Open an Offshore Bank Account
This is going to be quite generic. Not all banks ask of all of this and some banks – especially Panamanian – ask for even more.
Personal offshore account
- Notarized copy of passport (or other form of photo identification). Some banks also require apostille.
- Notarized copy of a utility bill or bank statement as proof of address. Some banks also require apostille.
- A bank reference. This is usually a letter from a bank, on the bank’s official letterhead, stating that you have been a customer for so and so many years and have always been an upstanding customer. Don’t worry if you haven’t. As long as you are still a customer of the bank, they will almost always provide one.
- A professional reference. These are quite rare, but some banks require them. Can often be substituted for another bank reference (if you use two different banks). Professional reference is a letter from a lawyer, accountant, or other person of reputable profession confirming that you are of good character.
- Proof of income. This can be a set of bank statements or pay slips showing your monthly salary. If your income is from savings or investments, you will need to provide proof of these. It does usually not have to be notarized.
Corporate offshore account
The first four are the same as for a personal offshore account.
- Notarized copy of passport (or other form of photo identification). Some banks also require apostille.
- Notarized copy of a utility bill or bank statement as proof of address. Some banks also require apostille.
- A bank reference. This is usually a letter from a bank, on the bank’s official letterhead, stating that you have been a customer for so and so many years and have always been an upstanding customer. Don’t worry if you haven’t. As long as you are still a customer of the bank, they will almost always provide one.
- A professional reference. These are quite rare, but some banks require them. Can often be substituted for another bank reference (if you use two different banks). Professional reference is a letter from a lawyer, accountant, or other person of reputable profession confirming that you are of good character.
- Full set of notarized company documents. This includes memorandum and articles of association, certificate of incorporation, certificate of good standing, register of directors, register of members/shareholders, and company structure diagram (if there are corporate shareholders, for example).
- Detailed business plan, outlining the goal of the company, estimate turnover/revenue, marketing channels, and a competition analysis.
If you open a corporate account for your offshore company using an OSP, they will take care of the company documents.
Hi! Thanks for all the info on your site, I’ve been devouring pages and pages of great stuff 🙂
One question I have after reading this one though (and I apologize if this is a really dumb question), is why would a company want/need an offshore bank account? I currently have a corporation in Canada and am looking into closing up shop and opening up an offshore corporation instead, but I don’t have any problems with my current bank account. Couldn’t I just have a business in BVI, for example, but retain my Canadian bank accounts?
Thanks in advance!
Ryan
Some seek secrecy. Some seek easy-going banks that they perhaps can’t find onshore. Some seek currencies or banking services (savings accounts, term deposits, investments, brokerage) not available with local banks.
Many seek to diversify their assets so as to not be reliant on one bank and/or one country’s financial stability.
In many cases, onshore banks won’t accept offshore companies (unless there is a strong, existing relationship or a trusted intermediary is used).
Sure, as long as your bank is happy to take on your BVI company. Chances are they won’t but it doesn’t hurt to ask (unless you ask in such a shady manner that they file a suspicious activity report…).
Do the references need to be addressed directly to the bank?
It varies but it’s usually not a requirement. Maltese banks are an exception to this. They almost always ask for references to be addressed to them, and they in turn only issue addressed references.
Hi. Great site!
Are the banks and jurisdictions in this article considered safe and reliable? All I am trying to accomplish is a personal bank account in my name, so that I can use it to wire, ACH, or debit funds to and from online gambling sites. This is because the reputable gambling sites don’t take any kind of transfer of funds from the USA. I imagine I will be keeping $25k-$50k in the account.
While I am not trying to hide any income, I’d be just as happy to have the account somewhere more private than not.
Thanks.
Hi,
Thanks for the feedback!
The banks listed here are just examples of the most common banks offshore service providers work with. I’d recommend doing your own due diligence on the bank’s financial stability. Most of them have been around for several years by now, so they’re not pump-and-dump scam artists.
However, as a US person, you will find it very difficult to find banks that accept you. Due to FATCA, PATRIOT Act, and other intrusive laws, it’s simply not worth the hassle of taking on US clients any more for many of these banks.
Since I don’t usually deal with US persons, I’m afraid I don’t know much about which banks accepts US persons. What I’d recommend is just speaking to banks that seem interesting and see what their policy is on US persons.
I don’t need to evade taxes, only I need to reduce (in a legal way taxes)to make my little company survive, and to let me invest in a new company.
if you have time to make some advise (paid) let me know by mail.
Thank you!
I’m afraid there are previous engagements and obligations which preclude me from providing paid services.
Best of luck in your endeavours, though!
Thank you for your fast reply!
I think that most of people open offshore bank accounts when tax pressure is excessive in their country (68-70% in my case). So it’s the right way to open an account? With a nom. shareh. nom. director and with all transparent with the bank?
Thank you again.
Unless you have very specific needs, nominee directors and shareholders are often just a money sink. TIEAs are written in such a way that it is always you – the UBO – that is sought after. There is no added privacy if your adversary is a government body.
Keep in mind the difference between tax evasion and tax avoidance.
In order to evade taxes – a crime in most countries – an offshore company and bank account might be enough. In order to avoid taxes – the legal practice of reducing tax by using offshore structures – you may need a more intricate structure. This is something you would need the advice of a qualified professional who knows your local laws, such as a specialized lawyer or accountant.
Just something to be aware of before going ahead. There’s no denying that there are plenty of small-time tax evaders that get by just fine.
Hello Streber, first of all thank you for sharing your knowledge!
I would like know if it is obligatory to give copy of the declaration of trust to the bank, in case of nominee sharholder.
I mean, I know they say that they must have, but if I don’t tell them that company owner is a nominee service… and I have power of attorney to open the bank account. Can I open without give them copy of decl. of trust or not? what is your experience? Thank you very much.
Hi,
Glad you’ve enjoyed the blog!
Something I stress a lot is that you should never lie to your bank. On bank forms, you are supposed to state the ultimate beneficial owner (UBO). In a nominee structure, this is you. Failure to do so and instead open the account under a PoA on behalf of the nominees likely constitutes fraud if not money laundering.
If the bank ever discovers the truth behind the company, they bank will either close the account down and confiscate the assets pending a legal investigation (which basically means you won’t see the money again) or – and this would be an extreme fringe case – you will have to disclose yourself as UBO.
If you want a bank account without your name attached to it, you will need to use something called a signatory nominee. The bank account is then in someone else’s name and typically all instructions must pass via them. This is a huge hassle (and expensive) if you are actively trading and make a lot of transactions. There is also the risk of the nominees running away with the money. While unlikely if using licensed and reputable nominees, it is a risk to consider.
Hello Streber,
Can you please give a review of CCLOGIC.COM as an Offshore Service Provider. Have you used them??
Also they advertise strongly a bank ( cnpeurope.com )which offers ” a limited time offer for 100% Anonymous Offshore banking.Usually you MUST provide some photo ID i.e. passport copy or other government issued photo ID and a utility bill or bank statement!!! HOWEVER Where is this bank located? [b]We will not publish the name, nor location of the bank before you have signed the initial application and paid the fee[/b]“.
This looks rather suspect to me but I would appreciate your experiences and views. Have you used them?
Hi,
This comment was unfortunately caught by the spam filter. Sorry about the late reply.
I commented on this on a couple of forums:
CNP Europe is neither European nor a bank. They offer bank accounts in Cyprus and St. Vincent, which probably means FBME in Cyprus and Euro Pacific Bank or Loyal Bank in St. Vincent. Neither bank account is, of course, anonymous.
From what I can see, neither CNP nor CCLogic is licensed anywhere to perform the services they offer. An unlicensed offshore service provider that refuses to disclose name of bank should set off all sorts of alarms and red flags.
I have no experience with CCLogic. I have dealt with resellers on more than one occasion and several of them are good at what they do.