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Where and how to open an international bank account

Today let’s dive into how to open an account and what you should consider when designing your offshore banking strategy.

A large number of offshore banks open accounts remotely, either for personal or corporate accounts. Meaning that you do not have to take a plane and present yourself to the branch in order to open the account.

That being said, although there are a lot of decent banks that allow remote account opening, it is recommendable traveling to the country, especially if you are seeking a personal or corporate account in any Asian or European financial hubs as most reputable financial institutions usually require the physical presence of the applicant.

Private banking and investment banking are a different from each other. It is usually possible to open accounts remotely at most banks in tier 1 jurisdictions such as Liechtenstein, Luxembourg, Switzerland, UAE, Hong Kong and Singapore. However, initial deposit required is higher, usually exceeding US $200-300,000.

For corporate accounts, the most relevant aspect is your business activity. Business activities which are of perceived high-risk of money laundering would face challenges to get nonresident banking.

Your jurisdiction of incorporation and the jurisdictions where you physically conduct business or have business interests play an important role. For instance, opening a corporate bank account in Singapore with an Antigua holding company could be quite tricky. However a BVI company with solid business relationships with Singapore would likely be accepted.

However, it is fair to say that is becoming increasingly difficult for offshore companies to get banking in European and Asian hubs. Banks will usually require you to have a strong business background and business relationships within the jurisdiction, or at least within the region.

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What do I need to open an international bank account?

To open an offshore bank account either remotely or physically present you will have to go through the bank’s KYC & AML / CTF checks in order to satisfy said bank’s regulatory compliance. For personal accounts this usually involves:

  • Proof of identity (passport, or a certified/notarized passport when opening remotely)
  • Proof of residency (document from a reputable regulated entity that contains your name and address, usually a utility bill or a bank statement)
  • Proof of wealth (e.g. letter from accountant or a different bank that can confirm your earnings).

They can also ask you for the source of your funds, tax returns or any other document to verify the legitimacy of your funds.

For corporate accounts, the KYC process is much more tedious and normally, in addition to proof of identity, residence and wealth of each of the shareholders, directors and ultimate beneficial owners (UBOs) is required:

  • M&AA (your incorporation documents, memorandum and articles of association)
  • Certificate of incumbency (who are the shareholders and directors are, certified copy)
  • Certificate of good standing (paid government fees, certified copy)
  • Business supporting documentation to prove the legitimacy of your company activity

You’ll also need a directors’ resolution to open up an international bank account or power of attorney for whoever is indeed opening the account.

Some time should be dedicated to thinking about who will be a signatory on the account and for which amounts they will be able to move money in and out of the accounts. If the account is to be a joint signature account, different banks have different technical abilities. Some, for instance, are far better at allowing for complicated signature requirements.

Banks in Hong Kong and Singapore (which are ideal for corporate banking) tend to be better in this regard. Offshore banks that are more for private individuals typically have fewer options when it comes to controlling of the company.

What should I consider when choosing a jurisdiction?

You must consider several factors when it comes to choosing the jurisdiction in which you want to bank.

You want to bank in an economically and politically stable low-tax jurisdiction, without capital controls and with a considerably solid, solvent and liquid banking system.

If you are looking to park a significant amount of savings offshore, you may consider UAE, Liechtenstein, Switzerland, Luxembourg, Andorra, Bermuda or the Bahamas.

These jurisdictions have some of the safest and most capitalized private banks in the world.

However, expect high maintenance fees and they are not really ideal for transactional banking.
Singapore and Hong Kong, in addition to also having a tier-1 wealth management industry, are ideal for corporate banking as they offer the lowest transaction and maintenance fees and have some of the best online and mobile banking services, being some of the most digitized banks worldwide.

There are also options for those without large amounts of disposable capital, such as Belize, which has considerably capitalized and liquid banks and high interest rates. However, they are not the best for day-to-day banking due to its improvable customer service and online banking services and high wire fees.

If you are looking for investment accounts, you are going to look for a bank with low brokerage fees in a jurisdiction that does not levy withholding and capital gains taxes.

For corporate brokerage account or fund management you can check the Cayman Islands or Bermuda, jurisdictions internationally known for large inflows of investment funds.

International banking also facilitates access to financial opportunities such as precious metals-backed accounts, and in some, you can even borrow against that account with the precious metal acting as a hedge.

It is also worth considering several fintech products for “day-to-day” personal banking services, such as virtual current accounts, digital wallets with virtual and prepaid cards and money transfer services.

These products are useful to cut fees for small international transfers, currency conversion and international card payments.

As you have seen, when it comes to offshore banking there are tons of available options. Other interesting jurisdictions that we have not covered includes Isle of Man, Mauritius, Georgia (Europe), Panama, Uruguay, Saint Vincent, U.K., or the US, among others.

However, making a bad choice can can lead to unnecessary headaches and setbacks for you and your business.

At Flag Theory we help entrepreneurs like you to navigate across all your offshore company and banking opportunities according to the objectives you are seeking to accomplish and your personal, financial and business situation.

Our goal is to ensure that you are making the right decisions.

Contact us and apply for a consultation call. We are happy to talk with you and discuss your options.

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