An offshore bank account refers to a type of account that is set up by a non-resident in a foreign jurisdiction. There are various types of accounts, depending on the jurisdiction of interest.
But most commonly, one can select to: 1) open an offshore business bank account or 2) a personal bank account. In most of cases, foreigners will set up the account for business purposes, which has different requirements compared to the one created for individuals.
Foreign investors who want to open an offshore business bank account can request in-depth information on how to start the formalities in the offshore jurisdiction of their choice, from our team of financial consultants.
| Quick Facts | |
|---|---|
| What is an offshore business bank account | An offshore bank account for business purposes is the bank account that is set up at the request of a company that is incorporated in an offshore jurisdiction.
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| Types of accounts
| Bank accounts in the currency of the offshore jurisdiction or accounts in foreign currencies such as EUR, USD, CHF, GBP. |
| Deposit requirements (yes/no)
| Yes |
| Deposit – minimum thresholds | The minimum threshold can vary based on the selected jurisdiction (from EUR 500 in countries such as Puerto Rico to EUR 350,000 in countries such as Liechteinstein). |
| Processing duration of the account | Minimum 2-3 days to 7 days and maximum 20 days, depending on the selected jurisdiciton. |
| Advantages of an offshore bank account | An offshore business bank account offers many advantages, such as: easy registration process, access to the account from any place in the world, reduced taxes and fees, credit facilities offered to investors, better interest rates than the ones usually applied in onshore countries. |
| Tax exemptions in offshore jurisdictions | Offshore jurisdictions are known for not applying taxes such as: the corporate income tax, the inheritance tax, the capital gains tax, the withholding tax on dividends, interest or royalties.
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| Corporate documents to submit | Identity documents of the shareholders and directors, completed application form, the certificate of incorporation of the company, the statutory documents (articles of association and the memorandum of association), the initial deposit established by the bank of choice. |
| Certificate of good standing required (yes/no) | Yes, in certain cases (for companies that haven’t been incorporated recently). |
| Legal representation allowed (yes/no) | Yes |
| Document for granting legal representation | The power of attorney |
| Main jurisdictions for opening an offshore bank account | One can open an offshore business bank account in jurisdictions such as: Belize, Switzerland, Seychelles, Nevis, Panama, Singapore, Puerto Rico. |
| Offshore bank account for personal purposes | Foreigners can also set up an offshore bank account for personal purposes. |
| When it is recommeded to have an offshore bank account | When establishing a business in an offshore country or when one relocates to an offshore jurisdiction for various purposes. |
| Fees charged for the account | Banks will charge a fee for the setup of the account (EUR 200-300 for personal accounts and EUR 500 for the offshore business bank account). |
| Possibility to open the bank account online | Yes, some offshore jurisdictions provide this service. |
Depositing options | International wire transfers, checks, depositing money in person. |
Ways to make withdrawals | Debit cards, checks, electronic wire transfers between 2 different accounts. |
| How to choose an offshore jurisdiction where you will open an offshore business bank account | – the banking regulations available in that country; – the economic development of the jurisdiction; – the types of bank accounts to be set up by foreigners; – the possibility to open an offshore business bank account online; – the deposit requirements; – the fee policies; – the services of local banks. |
| Source of funding requirements | In most of the offshore jurisdictions, banks will need to see documents that show the source of the funds to be deposited in the bank account. |
| The procedure to open a bank account online | In countries where this service is possible, the investors can initiate the bank account set up by submitting online the set of documents that would customarily be required for in-person applications. After this, an online meeting with a bank representative must be held. |
| Privacy policies | Offshore banks provide a high level of customer confidentiality, while complying with international rules and regulations on transparency. |
| How to select a bank | Once you have decided on a country where you will open an offshore business bank account, you should select the bank based on the types of services it provides, its local and international reputation, customer support, digital banking services, fee policies and other similar matters. |
| Are there any restrictions concerning the nationality of the investors? | No, any investor, regardless of his/her nationality, can open an offshore bank account. |
| Bank accounts useful for investors | Offshore investment accounts, offshore trust accounts, offshore savings accounts, etc. |
| Jurisdictions where the bank account can be set up online | Nevis, Belize, BVI, Hong Kong. |
| What is the tax haven with the largest number of banks? | The Cayman Islands (158 banks, including subsidiaries of foreign banks). |
| Risks associated with offshore banking | The same as in the country of residence – financial instability/crisis, maintenance fees, etc. |
| Is it possible to open the account without a deposit? | Yes, if the law of a given jurisdiction allows it. |
| Ways in which our team can help investors | Besides the legal representation during the set up of a bank account (for personal or business purposes), our team can help investors in opening an offshore company or obtaining various types of licenses. |
Table of Contents
When is it recommended to open an offshore bank account?
By definition, an offshore account refers to a bank account that is set up in any foreign country where the person/company is not a resident. There are many situations when it is recommended to open an overseas bank account and for individuals, the following apply:
- persons who live abroad for a long period of time throughout a financial year;
- persons who apply for employment in a foreign country;
- persons who retire to a foreign country;
- persons who travel many times a year for business purposes;
- persons who develop freelance work and who are paid in a foreign currency (provided that they establish a business partnership with foreign partners/clients registered abroad);
- persons who own various categories of assets in offshore jurisdictions.
For business purposes, it is recommended (and in general, mandatory), to set up an offshore bank account for a legal entity when registering a company in an offshore jurisdiction. In most countries, setting up the corporate bank account is a compulsory part of the offshore company formation process.
What are the advantages of an offshore business account?
Having a bank account for a business operating in an offshore jurisdiction is not only a mandatory requirement, but it is also a way to obtain various tax advantages. In most of the offshore jurisdictions, banks have become more and more specialized in providing top quality banking services.
As such, clients can obtain a multitude of benefits, such as many payment solutions, the protection of the financial assets of clients, international bank transfers completed at very advantageous rates, many currencies to choose from and others.
In general, when setting up a bank account for businessor personal purposes, in the country where the person has his or her tax residency, the availability of bank account currencies is limited to only few international currencies, such as the Dollar or the Euro, and the currency of the respective country.
For those who open an overseas bank account, this will not be the case. Besides the matters presented above, one of the most important advantages of an offshore bank account refers to its tax advantages.
The tax advantages are not given by the account itself, but rather by the tax law of the respective offshore jurisdiction, which, in many cases, does not apply corporate taxes usually imposed to onshore businesses (VAT, corporate tax, withholding taxes).
Or, if the offshore jurisdiction applies these taxes, they are imposed at very low rates. The manner in which foreign businesses can benefit from these tax advantages is by incorporating a business there, to which an offshore business bank account is linked to, thus ensuring the right to benefit from the respective tax exemptions.
As said above, there is a diversity of currencies, and investors can also opt for various types of bank accounts. Additionally, those who want to establish an e-commerce business can opt for an offshore merchant account.
Please mind that this type of account is not set up through banks operating in offshore jurisdictions, but by separate services providers, specialized in offering this payment service usually necessary for online businesses.
Although the 2 types of accounts will require investors to present similar paperwork, differences can appear and our consultants can help you prepare the application file with any bank institution or professional payment services providers.
Differences can appear based on the country of choice, but in general, it must be known that offshore jurisdictions will require less paperwork when setting up an offshore bank account compared to the requirements of most of the onshore countries.
What are the deposit requirements for the offshore business account?
In selecting a jurisdiction that is of interest to a foreign investor one should also consider the deposit requirements imposed by the bank. Please remember that the minimum thresholds will differ based on whether the account is set up for personal or business purposes.
Regardless of the bank of choice or the jurisdiction, when one will open an offshore business bank account, the deposit thresholds will always be higher compared to the ones imposed for personal accounts. In the following list, you can find out some of the differences in deposits applied by different countries:
- 1. in Cyprus, the minimum deposit is of EUR 500;
- 2. in Liechtenstein, the deposit has a very large value, of EUR 350,000;
- 3. in Mauritius, one can open the account with only EUR 500;
- 4. in Switzerland, the minimum deposit has a value of EUR 10,000;
- 5. the processing of the papers in order to open the account can take approximately 7 to 20 days, depending on the jurisdiction.
What documents are necessary for setting up an offshore business bank account?
Regardless of the offshore jurisdiction investors will select, banks will require the same types of documents. Differences can appear, but in general, all banks have the same basic requirements.
Therefore, in the list below you can discover the main corporate documentation that is necessary when you will open an overseas bank account for a business:
- the certificate of registration issued for the legal entity;
- its statutory documents (the articles of association, memorandum, constitution or any other type of similar document – the statutory document can vary from one country to another);
- the register of shareholders, where the bank can see the up-to-date situation on the shareholding structure and shareholders’ information;
- the certificate of good standing (issued for companies that have already been incorporated for a long period of time – minimum 6 months);
- the register of directors;
- information about the company and the transactions of the company.
Along with these documents, when you will open an offshore account for a business, the identity documents of the shareholders and company directors must be added to the registration file.
The company must also attest having a registered business address and this can be certified through many documents, including utility bills issued on the name of the legal entity. Similarly, investors can submit rental contracts or any other similar documents, depending on how the company obtained its business address.
Please mind that all the documents presented above must be certified and notarized in front of a public notary. This procedure is also applicable during the process of offshore company formation. The requirement to have an offshore business bank account is a compulsory part of the process of offshore company formation, regardless of the jurisdiction of choice.
This requirement is part of the incorporation process available in all countries, as each legal entity must have its own, separate bank account where the company can deposit its revenues from the business activities carried out in the respective jurisdiction.
What currencies are available for offshore bank accounts?
Foreign investors can set up an offshore bank account in many international currencies. They can opt for the currency used in the jurisdiction of choice, but most banks will also offer the possibility to set up the account in well-reputed international currencies, such as:
- American dollars (USD);
- Euro (EUR);
- Australian dollars (AUD);
- Hong Kong dollars (HKD);
- British pounds (GBP).
Businesses that will sell goods and other products on the internet can also opt for anoffshore merchant account. The merchant account can be implemented through merchant account services providers. You can learn more about the main requirements from our financial advisors, who can help you prepare your corporate documentation.
How can one open an offshore account in Mauritius?
Mauritius is a famous offshore jurisdiction, that attracts numerous investors for a wide range of reasons, including the very favorable tax system.
Foreigners have the possibility to open an offshore business bank account in Mauritius, by preparing the required set of documents (each bank can have its own set of rules, but in most cases, there will be the same requirements).
Those who will open the business accountshould prepare the following: 1) the passport copy of the director and shareholder, 2) the proof of address of the director and shareholder, 3) the resume of the shareholder and director.
The procedure to open an offshore business bank account requires business owners to provide the company’s documents. In this sense, investors must prepare: 1) the certificate of incorporation, 2) articles of association, 3) the company’s resolution, 4) the resolution of the directors, 5) the share certificate and others.
Where the account is necessary for companies that have been incorporated for more than 6 months, the investors must prepare the company’s certificate of good standing too. It is necessary to remind you that all the documents have to be translated and notarized.
Please know that it is also not required to be present in person. If you want to open an offshore business bank account,our team of financial specialists can provide legal representation.
This can be done, of course, with the proper documents – here, the investors can draw and sign the power of attorney, a document which will stipulate the exact ways in which our team can represent foreign clients. It is important to know that in most of the offshore jurisdictions investors will have to prepare the same documents presented above.
Below, you can watch a short presentation on how to open an offshore bank account for companies:
Can investors set up a bank account online?
Yes, investors can open an offshore bank account online, which implies that they do not have to go in person to the bank located in the jurisdiction of choice, nor do they have to appoint local legal representatives to perform this action on their behalf.
However, this procedure is limited only to some jurisdictions and to only a few banks. Most of the banking institutions will require an in-depth verification of the documents and of the applicants, therefore the bank account will generally be set up in person or via legal representatives.
The possibility to set up an offshore bank account online is more frequent in the case of personal bank accounts, as there are fewer documents required and the bank account themselves are simpler to set up (fewer background checks and fewer legal/financial risks).
In many cases, where online set up is possible, it must be noted that the procedure will not be 100% remote, as at some point, the banks may require a personal visit or a meeting with the investors’ legal representatives. One can opt for online bank account setup in countries such as:
- Mauritius;
- Singapore;
- British Virgin Islands (BVI);
- Belize;
- Puerto Rico.
For more details on how to open an offshore business bank account, we invite you to contact our teamvia e-mail or by phone. Our team can also help you set up a personal bank account in your name or for a family member.
We invite you to contact our team if you need assistance in setting up an offshore merchant account. The merchant account is a different type of account than the one set up in the name of the business.
This allows a company to sell products on their online platforms to international clients, and thus, there are different requirements to open this type of account and they can vary based on the jurisdiction or the products sold.