“Zero Tax Anonymous Bearer-Shares Offshore Company with Secret Bank Account”

“And the bank needs to have all the currencies in the world, issue prepaid cards, debit cards, credit cards, and virtual cards. Fees should be very low, if any at all. The bank must be financially stable and in a jurisdiction with a deposit insurance.”

If this sounds like you – and it probably does, – you are going to be disappointed.

Let me explain why and help you set your expectations more realistically.

Why You Are Wrong

I often come in contact with people who want to trade stocks for a few thousand EUR/USD a month, sell e-books, sell software, or other small-scale operation behind the veil of an offshore company. So far so good. Forming an offshore company can be a great way to simplify running an online business or consolidate your investments.

Unfortunately, due to myths perpetuated by sales pitches by shady offshore service providers, pop culture, and misunderstanding of often already misunderstood articles in mainstream media about the offshore financial services sector, the desired specifications quickly go overboard. I’m often told how the person expects the company to be fully anonymous (sometimes not even disclosing their name to the registered agent or OSP), have mobilized bearer shares, and pay zero tax. They must also be able to use profits from the company tax free in their country of residence.

Additionally, they want an anonymous bank account (not possible) with a bank that offers complete banking secrecy. It’s important that the bank has an enormous liquidity or reserve ratio. Ideally, the bank shouldn’t be issuing loans. Despite this, the bank must somehow still charge extremely low fees and ask for no minimum deposit or some low amount under 100,000. As if that wasn’t enough, the bank must also be in a jurisdiction that insures deposits, even deposits of non-resident companies.

Why It’s Not Possible

Your identity must be known when forming a company because that is what the law says. The law says so because companies are legal entities, which can be parts of legal contracts, legal disputes, criminal investigations, own property, control assets, and so on. It must be possible to identify the person or persons behind a company.

Yes, there are ways around this, through using convoluted structures and/or nominees. But, let’s be honest, chances are you don’t need that level of secrecy.

Bearer shares are available but increasingly must be with custodians (demobilized). This is because bearer shares are a large money laundering concern. Ownership of funds can shift very quickly between several parties, with the ultimate recipient potentially being a known criminal or a terrorist organization.

Offshore companies aren’t a vehicle to easily and automatically reduce your tax burden. In some very specific cases – which depend on where you live – there may be laws and loopholes you can use to minimize your tax burden (what’s called tax minimization or tax avoidance), but in most cases, you are left with two choices: evade or pay taxes. Offshore companies are still useful because they are easy to run and offer a degree of legal protection.

Then we get to banking.

Anonymous bank accounts do not exist. Some blame 9/11 for them disappearing, but the uprooting of total banking secrecy was ending before then. 9/11 was a catalyst, though. These days, you will always be identified with the bank. Even if you use nominee bank account signatories, they will be required to declare you as the ultimate beneficial owner (UBO) of the company, whether you know it or not. Again, there are ways around this but you probably don’t qualify for it.

I will return to banking secrecy next week.

Banks are companies and companies have to make a profit. Offshore banks do not operate in some alternate universe where this doesn’t apply.

Banks have two sources of income: interest on loans and banking services fees. Now picture a bank that doesn’t issue loans. How do they make money? That’s right. By charging you fees. (Yes, banks also make money on their own investments but that does not affect my point here.)

It is true that banking fees vary regionally. Caribbean banks for some reason think they can get away with charging very high fees to non-residents, whereas European and Asian banks generally have lower fees. The lowest fees are found in the poorest countries, where banks simply can’t charge more because customers just wouldn’t bank then. These are the parts of the world where mobile operators handle more money transactions than banks.

However, you should also consider that comparing fees between banks isn’t always a very precise matter. It depends on what type of banking services you use. Banks are generally required to post their fees on their websites or in some cases – such as Andorra – post the fees on the central bank website. Just take a few minutes to read through the schedules of fees and make your own assessment of which has the lowest fees for the services you need.

But keep in mind that the old saying that, you get what you pay for, holds true even for banking. In some cases — Caribbean being a notable exception. A bank with a low profit margin cannot afford high enough salaries to hire and keep the best employees, which in turn affects your experience with the bank.

Deposit insurance has become the latest trend. What’s far more important than deposit insurance is the financial stability of the bank and of the country. Would you rather place your money in a financially unstable country that insures deposits or a financially rock-solid country that doesn’t? What’s your course of action if the country refuses to pay out insurance? Are you going to sue them? Litigate? Good luck.

Reading financial statements might sound boring but if you can’t do it, what are you doing forming an offshore company? After having a read a couple, you will get used to the language and know which figures to look for. I will go into this more in-depth in a few months.

More on both deposit insurance and reading financial statements in coming months.

I hope this has helped set your expectations to a more realistic goal.

19 Comments on "“Zero Tax Anonymous Bearer-Shares Offshore Company with Secret Bank Account”"

  1. I thank you for your extremely informative website. It is the first one I’ve come across that is actually helpful, and so I’m hoping you can help me.

    My situation is fairly simple in that I have a Swiss bank account that I have to close because the bank recently informed me that I must agree to have the account administered by a Canada based management company – which will of course report everything to the Canadian government – or the bank will close the account and I’ll have to take my money elsewhere.

    The reason I opened the account in the first place (in the 1970s) was not to evade taxes, but to have some assets beyond the knowledge and reach of the government in case they melted the entire economy down and came looking for my money to fill they hole they dug. That view was radical at the time but seems quite prescient in this post-Cyprus-bail-in time, and so I consider having an unknown and therefore untouchable emergency cache more necessary than ever. The amount of money is still below the reporting threshold so I’m not non-compliant by not reporting it, and I’d like to keep it that way.

    All I want from a bank is that it respects my privacy by not automatically reporting to Canada or anyone else, enables me to trade stocks on major international exchanges, is both sound and reputable enough that I needn’t worry about my money not being accessible when I need it, the fees are reasonable, it can conduct business in English, and obviously that it accepts non-resident clients. I don’t intend to conduct a business, and don’t need loans or card facilities. Having an account opening minimum less than C$50,000 would be nice, as would being able to open an account remotely .

    I’d greatly appreciate whatever suggestions you might offer for specific banks and jurisdictions I could contact with a reasonable chance of success. I’d hoped initially to find a suitable bank in Austria but having had no success, I’ll consider anywhere that can provide what I need.

    • Hi Staglander,

      For Canada, you will need to consider that it is a signatory to the Convention on Mutual Administrative Assistance in Tax Matters initiative. See below links for jurisdictions with which Canada has treaties:
      http://tax-eoi.org/jurisdictions/CA#agreements (Bilateral)
      http://tax-eoi.org/multilateral_agreements/fe15bbbd33dc02b34816e64335556653#default (Multilateral)

      As you can see, this rules out a lot of jurisdictions. In reality, the implementation of the CMAATM is still unclear and is likely years away into the future, especially for the tax havens like Vanuatu and Guatemala who presently cannot even comply with basic TIEAs.

      However, if you want to stay away from those countries, you might want to look into Bahamas, UAE, Panama, and Hong Kong. There are normal EOI (exchange of information) treaties between Canada and those two but none that have automatic EOI. You can also find banks of high quality there, especially Hong Kong. Remote account opening is unlikely unless you can visit a foreign branch of a bank. I believe for example HSBC and Citibank are present in both Canada and Hong Kong.

      For fully remote account opening and out of the listed jurisdictions, Bahamas and Panama are more likely to be accepting.

      If you haven’t seen already, I have prepared a list of offshore banks here:
      There was also a recent forum thread where we identified offshore brokers:

      Best of luck!

    • I was in the identical situation. DNB in Norway opened remotely, and for less than the posted EUR100k minimum, but no stock trading on foreign accounts, and you can forget guaranteed privacy – they have to report everything to the Norwegian authorities, who I suspect, will share everything.

  2. Stebner – I’d like to thank you for this excellent blog. Best I’ve found on the topic – and got instantly added to my RSS. Keep up the great work!

    BTW I also have a question – I’ve been moving a lot around Europe lately and am currently residing in the south of Germany (but am from another smaller eastern EU country). Have also been freelancing online a lot and am now doing 90% of my work for a single client from USA. I’d like to have a way to keep that money offshore bur still accessible (at least through the ATM network) – my client is open to everything and have suggested a Delaware LLC (which after reading about – I don’t really like).

    I’m not even sure its worth it to go through a hurdle of forming and maintaining an offshore company since the amount is not that huge (around 40k Euro per year) and from reading through your articles not sure I even need that amount of anonymity. I think I settled upon just having a bank account somewhere where secrecy laws seem to be in place – probably somewhere closer in Europe (but Asia seems interesting fee-wise from your articles too).

    I’ve been looking at your list of offshore banks and wondering if you have a more current favorite in the region that would meet my requirements? So very private, works for non-residents, low/resonable maintenance fees, online banking + a (Visa/MS) debitcard with at least a 1k daily limit + can hopefully be opened remotely. I’ve been looking at Strateo in CH i.e. Keytrade in Luxembourg but am not sure if they give out a debut card too (seems more geared towards investors). Am also surprised that Austria is not better represented (Unicredit seems too rich for my blood) since everything I’ve read online suggests that their fight for privacy is faring better off than Switzerland.

    The article about Neteller and Ukash combo was also interesting but doesn’t seem to work all that well any more (seems that you can deposit Neteller codes only in the country they were funded in) and is of course not that sexy…

    Any recent tips for most interesting banks of 2014 would be most appreciated!

    • If you want to bank in Europe, you can find offshore-friendly banks with low deposit requirements in Europe in Latvia, Cyprus, and some banks in Estonia (for example Versobank). Sometimes, if you have a legitimate business plan and reason, Malta might be an option.

      Other than that, there aren’t a ton of conventional options unless maybe you can get on board with Swiss Postfinance. IIRC, they are available to residents in Germany but will only open a company account for a German, Swiss, Austrian, French, or Italian company. This means they won’t accept a Belize company even if the sole director and shareholder lives in Germany.

      Banks like Strateo, Swissquote, and Saxo Bank get nervous if you receive funds from third parties too much. They are trading banks or brokers more than regular retail business banks. Not saying that they can’t be used in your situation, but it’s something to keep in mind.

      Outside of Europe, you can find low deposit requirements in Hong Kong (5,000 HKD seems to be standard there), Singapore (minimum varies between currencies, so look closely), Panama (can be difficult if not a Panamanian company), and Mauritius – if we’re sticking to well-established financial centers.

      If you go for forming a European company (Gibraltar being a fine example), it’s quite easy to open a bank account all over Europe, provided you run a legitimate business.

  3. Hi Streber, Great post and have found allot of your other articles very informative too! I have a complex situation that i’m hoping you could shed some light on..
    First time poster seeking advice and an accountant for future tax planning.

    Here is my situation:
    – I am a UK citizen with UK NI number I hold a UK passport. However I was born in Luxembourg, mother lives in France and father was American but imegrated to luxembourg then to Portugal. I went to boarding school in the UK from age 13-18 then left then returned and went to university. lived in UK for the last 5 years but with no ‘fixed’ address for the last 3 (2 previous were at university) and I am hardly in the UK due to my job and lifestyle (<91 days a year)
    – I have a bank account and car registered in the UK and use a friends address with no tenancy agreement.. i do not pay them rent its just a place to have my bank statement sent (It is not a place i can stay at my own will). I also do not have any of my own property or have other ties to the UK from what i can make out from the not so user friendly worded documents i have found from HMRC.
    – i am part owner with my sister on a property which we inherited from my father. it is located in Portugal.
    -I can say I live at my mothers in France if necessary as she has said i can stay there whenever I want.
    – I am a freelance offshore hydrographic surveyor working in the Oil and Gas industry mainly through UK based agencies.
    – I normally spend more then 183 days a year working outside the UK which is carried out on-board vessels not attached to the seabed. IE I qualify as a mariner.
    – The work is generally carried out in international waters but i do
    also end up working in the UK from time to time when we goto port or
    when working within the 12nm limit. . it all becomes quite complicated!
    – The agencies I work for pay me via pay me in GBP.
    – The agencies i work for will pay my own LTD company or pay me via
    an umbrella company. Most are happy to pay me to a LTD company which has not been incorporated in the UK so i have a choice of where to base my company.

    A few questions:
    1. So where is my domicile and how does this effect my tax obligations?
    2. On the 183 day rule and <91 day rule in the UK and having no additional ties means I am non resident for tax purposes… Right? Well i know this subject is very complex.
    3. If this is the case where is my residency or given the choice/option where would be best to make myself resident for tax purposes? Im single with no kids etc. I generaly travel around allot and I am not in any one fixed place for a long period of time.. Not at this time in my life anyway..
    4. Could I essentially incorporate a ltd company and bank account in a low tax or zero tax jurisdiction and legally not have to pay tax? If i have understood correctly even if I was resident in the UK which I presume I am not then this would still be legal providing the income does not reach UK territory?
    5. is it possible for my company to trade stocks/shares with no tax obligations providing the profit stays in the company or is re-invested and where the company is incorporated does not tax corporation tax?
    6. If later on in life i want to register myself in an EU state could this then cause me allot of problems with the tax man?

    I know the main answer to these questions is to 'seek some professional advice and tax planning' The problem is i have found that well informed accountants/ tax consultants that are knowledgeable about offshore jurisdictions, UK tax laws, domicile and mariner laws hard to come by and my situation is rather complex so i will appreciate any light which can be shed on my situation.

    • Hi,

      Thanks for your feedback!

      Now, I almost feel bad for saying this after you took the time to write all of that – but I simply cannot answer your questions. Doing so could be construed as tax advice. Even when engaged with clients, I don’t give tax advice. I always take clients to an adviser instead.

      Your situation is quite complex and your questions very specific, so I doubt even generic information would help you. You are correct in that the answer here is to speak to a qualified, duly licensed adviser. Tax codes are complicated and contain a lot of ifs and buts.

      Chances are you can find the advice you need with one of the Big Four: PwC, KPMG, Deloitte, or E&Y. Since they are present in nearly every country, they should have the international expertise you’d need for your situation. It won’t be cheap but tends to cost less than the penalties for being tax non-compliant.

  4. “Your identity must be known when forming a company because that is what the law says”

    Not 100% accurate, I know of some jurisdictions where companies can be formed without any names being supplied at all. The theory of course is the agent knows who the incorporator/owner is, though in practice this might not be true. The problem of course is “so you’ve got a company with no ownership details on it so what? It’s pretty much useless if you don’t have a bank account to go with it and the moment you want to open a bank account you’ve got to hand over the UBO data for KYC and so there’s now at least some kind of record”.

    The more important question I think is what kind of secrecy are people looking for? In a practical sense it is usually referring to there being no public records available with the ownership details attached and this is common in many offshore jurisdictions. Trusts etc. can also be placed inbetween to eliminate records relating to the ownership of corporations but none of this changes anything when it comes to banking and that makes sense since ultimately it goes back to the question of the money. If you aren’t transacting money via the banking system then why form a company at all?

  5. Hi Streber,

    Thanks for the information you gave me.

    USA LLC is very similar to the UK LLP. They are both pass-through entities.

    I will do some in-depth research in the coming 2-3 weeks. If I see anything interesting, I will be sure to update you.

    Warm Regards,

    • UK LLP can be an excellent vehicle if you have a partner. Don’t expect UK banks to take you on, though, but it’s nonetheless quite easy to open accounts elsewhere.

      Good luck, and I look forward to hearing your update!

      • UK LLP is great instrument, but I would recommend Scottish LP, it is very similar like UK LLP, but SC LP is not providing full accounting filling online, so it is mostly not possible to find out any info about partners and BO of the partners anywhere

        • Thanks for your comments!

          I have seen an increase in interest for Scottish companies. Still need to do a lot of research on it.

          With the upcoming independence referendum, do you foresee any changes (better or worse) for Scotland as an attractive jurisdiction for incorporation if it passes?

          • it is really hard to say what happens after referendum, but i guess Scotland will try to attract businesses someway… could be better than UK, still UK has a lot of great option like principal or agency company, LLP is great for its tax transparency, even it is pretty complicated to register for VAT

  6. Ohh, and I forgot to mention that most of my clients are Hong Kong companies. Hence, for tax reasons, opening a Hong Kong company is not an attractive choice.

    The reason why I thought of Seychelles IBC is because it is cheap. However, I learnt from your past comments that if I use an IBC, then I will be very limited choices when it comes to opening a business bank account because IBCs in general do not have a good reputation.

    I have a limited budget to work with, so I really need your help with determining good incorporation and banking jurisdictions for my trading business.

    Thank you in advance,

    • “The reason why I thought of Seychelles IBC is because it is cheap. However, I learnt from your past comments that if I use an IBC, then I will be very limited choices when it comes to opening a business bank account because IBCs in general do not have a good reputation.”

      Two things:

      1. It’s not that horrible in many cases you can open accounts with IBCs without problems (something to understand is mostly banks don’t understand corporate law and they definitely don’t understand trust law)

      2. The “flexibility” you mention is only an issue if you want it, meaning if the bank I really want to open with (let’s say DBS Singapore for an example) accepts my corporation then it doesn’t really matter if European banks won’t open for the company so you kind of have to reverse engineer, decide where you want to bank (and often more importantly where you’ll do credit card processing if it’s necessary (I wouldn’t recommend anywhere but Europe in most cases for credit card processing unless you have low volumes)) and then figure it out from there, likely if you’ve got limited funds you’re already going to be restricted on banks by minimum deposit requirements anyway.

  7. Hi Streber!
    I want to thank you for writing this amazing blog. It has been very informative.

    I am currently running a location independent business and I am not sure where and how I should incorporate this business.

    Background info:
    I am an EU citizen and I currently reside in Thailand.

    I make most of my money trading spices internationally. None of the shipments come to the US. All my suppliers and clients are located outside of the US.

    I used to live in the US. Hence I incporated a Delaware LLC and has been using it ever since.

    Now that I just moved out of the US, I am wondering if I should dissolve the Delaware LLC and incorporate a new offshore entity (i.e. Seychelles IBC) for this trading business, or just keep the Delaware LLC.

    My questions for you:
    1. I understand that I do not have to pay US federal and state income tax because I do not reside in the US and that my income source is non-US. Since this is the case, do I have to pay tax to other countries?

    2. Since I have a location independent spice trading business, if you were me, in which jurisdiction would you incorporate the trading business? Do you think that my Delaware company is a mistake and that I should dissolve it?

    3. Do you know of any good banks outside the US and Hong Kong that would open a business bank account for my Delaware LLC?

    Thank you,

    • Hi Moneysaver,

      Thanks for your comment and feedback!

      Spices are an interesting trade. I know some people who have set up niche spice shops quite successfully.

      Question 1 – I can’t answer this. I don’t touch US at all and I can’t give any form of tax advice. This is a question best asked a local tax adviser. You probably have to pay tax wherever you live, no matter where your company is registered, though. Thailand is crawling with Europeans living there tax free, but spending a lot of money in the local economy. So while Thailand is rather tax aggressive, its government is treading carefully to not scare away all that good money.

      Question 2 – From my experience, US companies are more trouble than they’re worth if you are not resident in the US.

      Since Hong Kong is out of the question and Singapore probably is as well due to budgetary concerns (you need to pay for a local director unless you live in Singapore) and if we exclude IBCs for the moment, you are left with a handful of European jurisdictions: Gibraltar, Malta, and Cyprus. While more expensive, Guernsey and Isle of Man might be worth looking into as well.

      Now, if you absolutely want an IBC, the UK territories (BVI, TCI, et cetera) are usually the most reputable ones because they can be made to answer to a UK court of law in case of a dispute. Mauritius has also worked quite hard to earn a good reputation. The question is if reputability matters to you.

      Banking options are more about who you are, what you do, and how much money is involved. Seychelles and Belize have poor reputation due to their popularity with clandestine entrepreneurs, which may affect how the bank perceives you. Regionality may also be a factor, especially if you bank in Asia. It is sometimes perceived better to have a company somewhere nearby, which in your case would be places like Brunei and Labuan (quite costly).

      As for specific banks… Well, that depends on what you want from the bank. I have written extensively about banks before on this blog. If you can fly to Hong Kong or Singapore and open a bank account there, it will probably be an investment well worth it. Banks there are years ahead of the rest of Asia. If you have a lot of clients in Europe, it might be worthwhile to open a bank account in Europe (Cyprus, Malta, Luxembourg, Latvia, Estonia, Sweden) as well to consolidate European payments and move them in batches to your main account somewhere else.

      Question 3 – As stated, I don’t touch anything US related.

      Hope that gives you a good starting ground for your own research and reading.

      Best of luck!

      • hope it is not a problem for you guys if I have my experience as I work for a corporate service provider… for Seychelles IBC is not a problem if you open a bank account in Seychelles bank or some Carribean bank, I do it quite often. It is even possible to open an account for Seychelles IBC in Latvia. It depends on reputation of the introducer mostly

    • “1. I understand that I do not have to pay US federal and state income tax because I do not reside in the US and that my income source is non-US. Since this is the case, do I have to pay tax to other countries?”

      This is a common misnomer that seems to get perpetuated around the internet, in fact even if you talk to most sources at the IRS they can’t answer it for you. In fact you definitely want to dissolve the Delaware LLC because if they ever decided to audit or go after the company you could find yourself guilty of tax evasion. The reason is an LLC can be treated as a disregarded entity, partnership, or corporation, a single member LLC is by default treated as a disregarded entity but this isn’t intrinsically the case. The key is US regulations stipulate that if an LLC is treated as a disregarded entity its filing must be accompanied by a personal US filing for the individual who owns it, which leads to the next problem, which is due to the nature of the US taxation system (worldwide taxation by citizenship) there’s a high risk that in the event of an audit they will deem all the income “effectively connected income” by merit of the US legal entity and consequently subject to full US federal tax.

      Bottom line, there’s really no merit to having a US legal entity if you’re not stuck somehow being connected to the US, which it sounds like you’re not. UK would be a better starting point purely on the basis of costs but still arguably not a great place to be if there’s no reason to be there. If you’re processing payments online with any substantial volume it could be well worth incorporating in an EEA jurisdiction though the ones that are tax efficient (Isle of Man, Jersey, Guernsey, Gibraltar, Cyprus tend to be expensive and often challenging jurisdictions to set up). If you’re not processing any significant volume of credit card transactions then you’re more able to look at other jurisdictions.

      If you are truly resident in Thailand for tax purposes (note of caution here living there doesn’t make you a resident according to your country of citizenship, they’ve got some tests to determine under common (depending on your citizenship of course) where your actual residency is) you’ve got a lot of flexibility. Thai corporate residency law means you can run the corporation from there without it being deemed resident there which makes IBCs a viable option when they aren’t always in other jurisdictions. This combined with the absence of Thai CFC regimes means you can be in a solid tax position aside from Thai source income (contrary to what many people seem to think the source of income is not generally based on the location of the customers so you might be at risk tax wise in this case).

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