Political and economic insecurity in the world leads to the growing popularity of offshore banking. It gives tangible advantages: on the one hand, it is just as legal and well-regulated as banking in any onshore country (the times of grey schemes are long gone), and it still gives better conditions. The latter may include enhanced confidentiality, lower taxes, more stable banks due to some local measures taken – and, of course, safety. Each jurisdiction has its own peculiarities that it can offer, and it takes some time to study the information and find an ideal solution. You can write out your priorities and start googling for the right solution or delegate this time-consuming task to seasoned financial experts from portals like offshore-pro.com or any others you know and trust. If you are looking for a bank on your own, make sure to read customer and expert feedback and find out whether it is non-resident-friendly.
Countries for Non-Resident Banking
Start searching for an ideal state by identifying the countries that allow non-residents to set up accounts with their banking institutions (not all of them do!). Second, make a comparative analysis of their banking, tax, and legislative systems, as well as the banking institutions themselves and their internal policies. There are many factors you rely on to select the best option, including the bank’s reputation, access to tax incentives, the level of confidentiality and asset protection, and so on.
Most countries make it possible for foreigners to set up accounts with local banks, but the conditions they offer vary greatly. Opt for a country with a stable legal system, government, and economy. There are some countries that are traditionally selected for offshore banking, like Singapore, Belize, Panama, Switzerland, and even the USA.
Top Offshore Banks for Non-Residents
Let’s look at some factors to be taken into consideration when you choose a bank for you:
- DTTs (double tax avoidance treaties)
- Multilateral treaties, like the CRS (Common Reporting Standard)
- Taxes to be paid by trusts, legal entities, domiciled individuals, or residents
- Reporting requirements for offshore account owners in your country of tax residence
Also, look for rules and limitations that may be used by the bank:
- In most cases, you will not be able to open an offshore bank account if you come from a sanctioned country.
- You will need to provide proof of your residential address and tax residency before an offshore bank agrees to onboard you.
- If you are engaged in business that is considered illegal in the country where the bank is located, you will not be able to open an account. For instance, there are jurisdictions where gambling is a prohibited business activity, and you will have to look elsewhere if you have a gambling company.
Countries Where Account Opening is Easy
The answer to the question of which country is the easiest to open an offshore bank account depends on the person who asks it. If this individual (or his/her company) is a resident of Europe, the best choice is the European banks: the easiest way is to choose a neighboring EU state to diversify your assets. A European who wants to hide the assets further away from the country of tax residence can opt for the Cayman Islands, St. Lucia, Belize, Mauritius, and many other destinations (you can click on the above link to find out more about them). However, make sure that you check the country’s risk profile: Europeans usually have few problems opening accounts anywhere but the easiest will not always mean the safest.
US residents have their own headaches: all financial institutions in the world are required to report the accounts opened by US residents to the IRS, and worldwide income tax is payable to Uncle Sam no matter where an American makes profits or keeps assets. As a result, some banks prefer to deny the services to US residents rather than deal with all this. What can be done in this case?
There are three ways out:
- First of all, US citizens can open an account in Puerto Rico where FATCA reporting requirements do not apply.
- Second, there is a more sophisticated solution: you can establish an offshore family office company and a bank account in another country.
- Third, you can set up a Nevis trust that will give bulletproof protection to your assets.
If you need a customized solution in your situation, do not hesitate to follow the above link and discuss it with a banking expert.
Best Offshore Jurisdictions for Non-Residents
If you want general recommendations, let’s look at the countries that are suitable in the majority of cases:
- Cayman Islands. Take advantage of a stable political and economic environment, secure asset protection, and minimum tax liabilities.
- Nevis. This is a place typically used for reliable asset protection and establishing trusts.
- BVI. This jurisdiction is good for corporate offshore funds, holding companies, investments, and banking and insurance businesses.
- Seychelles. The banking sector here is quite reliable, and the jurisdiction offers zero taxes, which adds to its appeal. Keep in mind, though, that you will have to regularly submit financial reports and bank statements.
- Marshall Islands. This is a tax-free jurisdiction that will give you easy access to the global market, and we especially recommend it to companies planning an IPO.
- Belize. If you are looking for a destination that is perfect for offshore banking and offshore company registration, opt for Belize. You will be able to open an account here remotely, and the minimum balance required is not very high.
More Considerations to Take into Account
Finally, let’s look at the questions that you’d better answer before opening an account:
- What laws regulate the bank’s activities?
- What are the reasons for setting up a bank account abroad?
- What is the reputation of the offshore banking institution you have selected?
- What are the costs of setting up and maintaining a foreign account?
The answers will surely limit your choice as different banks and jurisdictions will perfectly match different purposes. There is no one-size-fits-all solution in this case.
Interested in opening a bank account abroad? We strongly recommend following the above link for more practical information on the present-day global banking landscape.