If you are looking to open a bank account for your offshore company, you might think of European jurisdictions that are outside the EU such as Liechtenstein, Switzerland, and Andorra. Having a bank account in one of these jurisdictions is a sign of prosperity but the matter is that they don’t open bank accounts for offshore companies. Banking in other European jurisdictions such as Cyprus, for example, is possible but it cannot be guaranteed that you will be able to set up a bank account for your offshore company in Cyprus.
Asian jurisdictions such as Hong Kong and Singapore have changed their policies and made the task of obtaining banking services there much more challenging. Today, you have to submit a large set of corporate documents containing not only corporate documents but also bank statements, contracts, invoices, and so on. A detailed company presentation has to be made and personal information of the company owner has to be disclosed. In addition, a personal visit to the bank is required. For these reasons, many people consider the opportunity to open accounts with offshore banks.
Advantages of offshore bank accounts
Depending on the country of your origin, you may be able to find an offshore jurisdiction that does not automatically exchange financial information of its residents with the authorities of your home country. If a corresponding agreement has been signed, exchange of information is easy. If it has not been signed, it becomes problematic. Thus, you can find a high level of personal information confidentiality if you choose to bank offshore. Please consult an offshore expert because the existence of an agreement about automatic exchange of information is also relevant for your offshore company.
Because of the toughened compliance requirements, setting up a foreign bank account in a reputable jurisdiction has become a challenging task indeed. We do not mean to claim that opening a bank account in an offshore jurisdiction is easy: you would also have to go through tough due diligence procedures. At the same time, opening an offshore bank account may be easier than opening an onshore bank account in some cases.
Possible disadvantages of offshore bank accounts
Advantages of offshore bank accounts are important to know, of course, but you should not keep possible disadvantages out of sight either. For example, offshore banks may request additional documents that justify money transfers and they may do it often. Besides, onshore banks may ask for invoices, bills of lading, contracts, etc. when they see that the payment comes from an offshore bank.
It may also be the case that the time zone where the offshore bank is located is very much different from your own time zone.
If you are planning to use your offshore bank account for accumulating money, it might be less reliable than an onshore bank. One reason for that is that offshore banks are not regulated as strictly as onshore banks are. This gives the bank managers more space for maneuvers. In addition, the requirements to the share of the bank’s equity capital are usually lower in offshore jurisdictions than they are in onshore ones.
Practice shows, however, that small offshore banks are often more stable than large banking conglomerates. They do not give out loans and make money by providing financial services to customers and their profits grow. Large international banks, in their turn, are susceptible to economic factors and global tendencies.
Places where you could open an offshore bank account
An offshore bank account in Mauritius
Mauritius has a stable banking system and serves as a financial center in South Africa and the Indian Ocean. Good legislation borrowed from Great Britain and a good reputation that Mauritius takes good care about allow banking in the country with ease. You should also be aware that Mauritius offers an attractive legal residence program to those you would like to relocate there.
ABC Banking Corporation
Part of ABC Banking Group. Main type of services – leasing services. Account opening timeframe – 3 to 5 days, no personal visit is required. Bank accounts can be managed online.
An offshore bank account in Seychelles
Banks are meticulous in Seychelles and not unambiguous in their requirements: opening a bank account cannot be guaranteed. The country has been forced to adopt strict rules of financial monitoring. If a transaction seems suspicious to the bank administration, the customer has only 72 hours to provide explanation and justification. Otherwise, the bank will inform the financial monitoring authorities and the bank customer will have to prove his/ her innocence.
Barclays
It is the 25th largest bank in the world and the 2nd largest bank in England. Account opening timeframe is 2 to 3 weeks and no personal visit is required. The security deposit is US$ 50,000 and it has to be made within 4 weeks from the account opening date.
BMI
The bank holds a license in Seychelles for providing offshore banking services to individual and corporate clients from all over the world. Few documents are required to set up a bank account with BMI. Account opening timeframe is 2 weeks and no personal visit is required. No commissions are charged on incoming transactions.
An offshore bank account in St Kitts and Nevis
St Kitts and Nevis has laws governing offshore banking services and strict regulations on banking privacy. Penalties for breaches of these regulations can be tough including a prison sentence.
Bank of Nevis International
The bank will suit those who have companies registered on the island of Nevis and who want to do business in that jurisdiction. All transactions are made via Lloyds TSB in London. Account opening timeframe is 2 to 3 days.
An offshore bank account in other Caribbean jurisdictions
Hermes Bank
The St Lucian bank holds an international Class A banking license. It stands out for the speed and the quality of its services. The bank uses modern technologies, which allows opening an account there in a fast manner (within 2 to 3 days). Money transfers happen faster in comparison to some other offshore banks. The transaction can go through on the same day or the next day. Accounts can be opened remotely.
Loyal Bank
This bank in St Vincent and the Grenadines is good for opening small accounts. The bank account can be opened remotely. Precious metals can be exchanged for USD and EUR. Private banking services are available if the deposit exceeds USD 30,000. Account opening timeframe is 5 to 10 days.
Euro Pacific Bank
One more bank in St Vincent and the Grenadines that provides superb services to holders of small bank accounts. An account can be opened remotely on the day of application, as the required documents can be scanned and sent to the bank by email. The bank wants customers to deposit hard currencies only.
Without doubt, there are multiple other options that you may want to consider if you would like to set up an offshore bank account. It would be a good idea to seek professional advice on the matter.
