Offshore Banking in 5 Easy Steps

You often learn about offshore banking from movies – you know, those bad people who hid their dirty money in overseas bank.

True, that in reality, offshore banking services are often used for illegal activities – money laundering, tax evasion, and so on. However, the truth is, offshore banking services are legal banking services offered by certain jurisdictions – and you can make use of the services for you and your business, legally.

Offshore banking

Typically for tax benefits, privacy, and protection against local political/financial instability, you can open an offshore bank account easily, even without the need for you to visit a physical bank in the jurisdiction you choose.

“It may be easy, but can an average person like me open such account?” you might ask. My answer to your question is yes – you can open a bank account overseas as either an individual or a business entity, even if you are an average person.

Indeed, in reality, anyone can open an offshore bank account, and it’s not harder than opening a local bank account. It’s relatively similar to opening a conventional bank account, but with additional requirements you must meet.

If you are considering to open an offshore bank account, but don’t know how to get started, this article can guide you by hand through the process; it’s quite simple, really.

ICO Services, offering international corporate services, recommend you the following steps to open an account:

Step #1: Decide whether offshore banking is right for you and your business

Offshore banking offers plenty of advantages, such as keeping your currency in a more stable jurisdiction, anonymity, or lower loan interest rates. If you are opening an account for business purpose, you can also link your account to an offshore company, if you decide to register your company of the same jurisdiction.

Aside of all the advantages mentioned above, you also need to be aware of the disadvantages, too: The negative reputation of offshore banking, the costs incurred when you decide to visit your overseas bank, the less accessible to information, and so on.

Here are some resources to help you decide:

Once you have identified your needs for opening such an account, you are ready to go to step #2.

Step #2: Location, location, location

Once you have made up your mind, your next step would be choosing a jurisdiction. As you might have known, not all countries or jurisdictions are available for opening an offshore bank account.

There are countries which are adopting financial policies that encourage inflow of foreign investments, such as lower taxes and asset protection plans. The countries are typically politically and financially stable.

With that being said, there are some popular destinations you can consider: Cyprus, Liechtenstein, St. Vincent & The Grenadines, Switzerland and Tanzania to name a few.

These resources can help you decide on the jurisdictions:

Once you have decided the right jurisdiction for you, proceed to step #3.

Online banking

Step #3: Visit the bank or online?

In this step, here is the important question: Do you need offshore online banking services? Again, the answer depends on your particular needs.

For your convenience, an online account accommodates you with easy access to your account info and funds from (nearly) anywhere in the world, as long as you have Internet access. You can do internet banking securely, as well as do transactions using debit or credit cards – without the need for you to physically visit the bank location.

Of course, there are downsides, too – we know that business banking is about relationship. As usual, paying your bank a visit can enforce your business-bank relationship – which is important. Moreover, as not all offshore banks offer online account opening, your decision to physically visit the banks mean that you will have more access to available banks.

When you have decided whether you are going online with your banking or not, proceed with step #4:

Step #4: Meet the requirements

As always, there are documents you need to submit and requirements to meet in order to open an offshore bank account. It is essential to meet all the requirements so that opening an account is even an easier process for you.

Please note that document requirements vary from one bank to another, and your decision on step #3 would also determine the amount of documents you need to submit to open an account; opening an account online typically means you need to submit more documents to prove your legitimacy.

This article can show you the documents you typically need:

Got the documents sorted out? If so, go to the final step.

Step #5: DIY or use an official agent

This is perhaps the all-important question: Will you DIY or use an intermediary. We put this as the last step as, typically, people will decide this first and then get biased information. It’s always best to do your due diligence before you start the account opening process.

DIY, as always, is the best route to go if you know what you should do. If you have no clue about offshore banking, you need to spend a lot of time looking for info and contacting the banks’ customer service representatives to see whether their services are exactly what you need.

On the other hand, using the services offered by an intermediary can offer you benefits:

  • For opening an account, numerous banks require a reference. In some cases, an intermediary can provide the reference.
  • Some offshore banks are not accepting direct clients; they only accept referrals from trusted people and official agents.
  • An official agent may have a good relationship with the offshore bank, in such a way that the procedure to open an account is more lax.

I personally would opt for using the service of an official agent, simply for that particular reason: I don’t know which banks I should choose even though I might have decided the jurisdiction; I also don’t know how to make the process faster or smoother.

In short, I don’t have the resources to DIY.

If you are considering to use an official agent, I would recommend you to find out more about ICO Services’ offshore bank account services and see whether they can help with your needs.