All You Need to Know About Offshore Corporate Bank Accounts
Is it legal to have a bank account in another country?
Yes, it is legal to bank in a country other than your country of residence, although depending on the jurisdictional there may be limitations. Even though it is legal it will require a complex onboarding process. Offshore banking is associated with corruption, tax evasion and hiding assets and although these things are criminal offshore banking is completely legal. Legally all your bank accounts and assets must be declared to the tax authorities, no matter where they are.
Can anyone have an offshore bank account?
People are often surprised to hear that almost anyone can open an offshore bank account. It is not about hiding illicit funds or avoiding taxes but rather diversifying your assets. Although you can open an offshore account you must consider the necessary documentation required, the initial deposit and identity verification which are all part of opening an offshore account. Most offshore banks will also check your credit history. Some banking jurisdictions are off-limits to US citizens but they still have many options for foreign banking.
What are the top recommended offshore banking jurisdictions?
- Cayman Islands
How much does it cost to open a bank account offshore?
When you open a bank account in an offshore jurisdiction you’ll need to pay the set-up fee which can be about $550-$1,250. The amount can vary depending on the jurisdiction and type of bank account. Some banks also require a minimum deposit. For a corporate bank account offshore you may reach figures of $1,500-$2,500 for opening the account.
What makes a bank “offshore?”
The term “offshore” bank originated from the Channel Islands which are located “off shore” of the UK and the islands were one of the first popular locations offering bank accounts to non-residents. As it happens many offshore jurisdictions are in fact islands although some are land-locked like Switzerland but are still referred to as “offshore.” Offshore banks hold an offshore banking license and operate under the regulations of that international banking license. The conditions laid out in the offshore banking license usually prohibit the bank from any business activity in the offshore jurisdiction. Offshore banks offering financial services to foreigners are also referred to as Offshore Financial Centers (OFC).
Advantages of an offshore bank account
- Increased privacy
- Little or no taxation
- Convenient regulations allow for easy access to deposits
- Offshore accounts offer a chance to diversify your assets to protect funds from political or financial instability in any one jurisdiction.
Is it difficult to open an offshore business account in Europe?
Unfortunately, it is becoming increasingly more difficult to open an offshore corporate bank account in Europe. However, if you would like some assistance we have the connections and experience to help you obtain a European business account.
How to choose a bank for your company’s business bank account?
Don’t open a company bank account with the first bank you come across, or the one with the loudest marketing campaign and don’t automatically open a business bank account at the same institution where you hold your personal accounts. With banking regulations evolving and increasing banking options available it is important to choose your business bank according to the services it offers.
When choosing a bank ask yourself:
- Can this bank provide the services my business needs
- What jurisdiction is the bank in and what will that mean to my business
- Which regulatory body regulates the bank
- What are the business bank account terms and conditions
- Are there minimum requirements for opening a business account.
- What will the cost of holding a business bank account be
- IS there a minimum balance
- What are the maintenance fees
- Is internet banking free
- Are there transaction fees
Remember that you can always hold multiple bank accounts even at different banks in different jurisdictions.
An offshore corporate bank account is a bank account held in a foreign country, “offshore” from your jurisdiction of residence. When you hold a bank account in an offshore jurisdiction the account is subject to international banking regulations.