There are various types of offshore bank accounts that can be set up by foreigners. Generally speaking, there are 2 main categories. The 1st one refers to offshore bank accounts set up for corporate structures or for investment purposes, and the 2nd one refers to personal accounts.
Personal accounts are, as the name suggests, bank accounts set up by foreign individuals who want to use the account for personal purposes. One of the main reasons to open a personal offshore bank account is given by the fact that the foreigner will live in a foreign jurisdiction for a period of time.
By doing so, the person will avoid paying bank fees charged to the bank account that was set up in the home country. Persons who need assistance with the procedure and the applicable laws can address to our consultants for in-depth advice on how to open a personal offshore bank account.
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What are the advantages of a personal offshore bank account?
There are multiple advantages that a personal offshore bank account can offer to a person, besides the issue referring to fees charged at an international level.
In general, it is recommended for an individual to keep his or her financial assets in different accounts, that provide various types of benefits, as a way to increase the value of one’s wealth and to provide a level of protection against various problems that a bank may experience.
| Quick Facts | |
|---|---|
| What is a personal offshore bank account | This type of account is one that is set up only by natural persons who want to have a bank account in a different country than the one where they have their habitual residence.
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| Main use of a personal account
| The personal account can be used for deposits, for savings, to pay bills and make various purchases in the offshore jurisdiction of choice, to make withdrawals and many others. |
Documents to set up the account | A copy of the identity document (the passport), a bank reference from the bank where the person is a resident, proof on income, the application form. |
| Legal representation in setting up the account (yes/no) | Yes, foreigners can ask for legal representation when they set up the personal offshore bank account.
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| Mandatory legal representation (yes/no) | Yes (some offshore jurisdictions can require foreigners to have a legal representative). |
| Currency options | Foreigners are entitled to set up the account in various currencies, such as well-reputed international currencies – dollar, euro, etc. |
| Tax advantages | Most people choose an offshore bank account because offshore jurisdictions provide many tax benefits and tax exemptions. Having a personal offshore bank account implies that the foreigner will not pay the taxes charged internationally when using the bank account originated in the country of residence. |
| Deposit requirements | It varies from a jurisdiction to another – there are countries where there aren’t any deposit requirements, such as Curacao or Vanuatu, or jurisdictions where the deposit requirements are high, such as Panama (approx. $20,000) or Seychelles (approx. $10,000). |
| Possibility to set up the account online (yes/no) | Yes (for some jurisdictions). |
| Residency requirements | In general, foreigners can easily set up a bank account in offshore jurisdictions, without any residency requirements. |
| Processing fees | Banks will usually apply processing fees, but there are also situations where one can set up the account without the payment of a fee. |
| Duration of the account setup | It depends on the country of choice – it can vary from 1 business day to 2-3 weeks. |
| Options to set up the account | Foreigners can choose to set up the account in person, with the help of a legal representative or online. |
| Procedure to set up the account online | Contact the bank on the online platform/website, complete the required forms and submit the necessary documents, enter into a live conversation with one of the bank representative, who will assist in the procedure. |
| Privacy policies | For offshore banking, banks generally provide an increased privacy level for their clients, regardless if they are individuals or corporate entities. |
| What are joint accounts? | Joint accounts are bank accounts that have co-ownership. |
How to apply for a bank account online | By completing the online forms and submitting the documentation required by the bank. |
Procedure through which a client can obtain legal representation | An individual can open a personal offshore bank account with the assistance of our team, by granting the power of attorney. |
| How long does it take to process the online application for a personal account? | 1 business day. |
| Mandatory video call for online account set up (yes/no) | Yes |
| Age requirements | In most conuntries, clients must be at least 18 years old (but the minimum age can vary from one country to another – in some jurisdictions clients can set up a bank account from the age of 16 years old). |
| Activation of the debit card | Once the bank account is set up, and the client receives the debit card, the card must be activated at an ATM machine belonging to the bank where the account was set up. |
| Situations when the joint account is recommended | In general, the joint account is recommended for family-related matters (for spouses who want to have common access to finances, for adult children and aging parents, for parents who want to allow their minor children to have access to their finances). |
| Offshore jurisdictions where clients can open a personal bank account | Clients can open a personal offshore bank account in jurisidictions such as Panama, Seychelles, Curacao, Vanuatu, British Virgin Islands, etc. |
| Can minors set up a bank account? | Yes, minors can open a personal offshore bank account, but their legal guardian or parent must consent and participate in the set up formalities. |
| Services for bank accounts held by minors | – debit card; – money transfers; – spending limits; – the account can be connected toaccount of their legal guardian/parent, so that the latter can be notified on the transactions made by the minor. |
| Can clients close their bank accounts? | Yes, clients can close the bank account at any given moment. |
| How to close a bank account | The client must address the bank, clear the account and complete the standard forms for closing the account. It some cases, fees may be applied. |
| Can one close a bank account online? | Yes, but this possibility is limited to few banks. In general, banks offer the possibility to close the account through an in-person meeting. |
| How long does it take to close the bank account? | It can be closed in a matter of minutes. However, if money withdrawals/transfers have to be made, it can take up to 1-2 business days. |
Below, our consultantshave compiled some of the most important reasons for which it is recommended to open a personal offshore bank account:
- 1. the account can be used as a way to avoid risks – having an account in a country and another one in a different country can protect the owner of the account from any possible market instability that can appear in one country;
- 2. depositing the money in an account that is set up in a different currency than the one back home can protect and increase the value of one’s money, as various currencies have higher purchasing power;
- 3. the account can provide an increased access to one’s resources, especially nowadays when one can open a bank account online;
- 4. the account can also offer certain tax advantages and very low deposit requirements, depending on the jurisdiction of choice;
- 5. one can also enjoy a high level of security and privacy, based on the law applied in the offshore jurisdiction.
What documents are necessary for a personal bank account?
Foreigners who want to open an offshore bank account will have to provide certain documents in order to benefit from the services of a local bank. The types of documents required are usually influenced by the following: 1) the offshore jurisdiction of interest and 2) the commercial bank selected by the client.
Each offshore jurisdiction has its own national rules and regulations and each bank can have its own internal policies, and this is why the documentation can slightly vary.
In all cases, foreigners should prepare a rather extensive set of documents, which can be very different compared to the documents required in the home country (in most cases, citizens and residents of a country have to present identity documents and residency documents and nothing else).
Below, you can find out some of the main documents one has to prepare when opening a personal offshore bank account:
- the identity documents and/or the passport;
- information concerning the identity of the applicant – such as the name, date of birth, the address, the citizenship;
- documents attesting the residency of the person (here, documents such as rental agreements, utility bills, real estate ownership contracts, etc. can be added to the file);
- a proof on having sufficient financial funds (a letter from the home bank can be requested);
- bank statements from the bank in the home country.
Can foreigners receive legal representation when opening the offshore account?
Yes, not only that they can receive, it is highly advised. Considering that there are many options regarding the types of accounts, the offshore jurisdictions, the minimum requirements, getting legal and tax advice it rather necessary.
In most cases, foreign individuals will know very little information on the tax and financial system of an offshore jurisdiction, so getting legal advice should become the primary concern of a foreigner. Besides this, in some jurisdictions, some banks will require foreigners to be represented by a local third party, to intermediate the process.
Below, we have prepared some of the main reasons for which you should open a personal offshore bank account with the assistance of our team:
- 1. some banks will request foreigners to be represented by local specialists;
- 2. due diligence on thebank procedures can be completed by persons who have an in-depth knowledge of the local system;
- 3. depending on the jurisdiction of choice, opening a personal offshore bank account can be a complex task, even if the account is set up for an individual;
- 4. with the assistance of local consultants, the procedure will be completed in a more expedited manner.
What is the data on credit cards?
Credit cards have become the main paying instruments used at a global level, although some parts of the world still rely on cash as the main method of payment. The number of credit cards issued in a country varies based on numerous factors, such as the technological development of the country, the population size, the urbanization level and many others.
Below, you can watch a short video presenting how to open a personal offshore bank account:
At a global level, the following data is available:
- in 2019, there were 22,8 billion cards in circulation (this includes all types of cards – credit, debit, etc.);
- it is estimated that, by 2026, the number of cards will increase to more than 30 billion;
- from the available 22,8 billion cards, 2,8 billion represent credit cards, used for funding various types of consumer spending;
- the majority of the consumers have at least 1 credit card (78% of them);
- Visa accounts for the largest share of the cards issued at a global level, more exactly 52,8% of the total number;
- the highest debt per person is registered in the United States of America (USA), where the average debt per person is $5,331.
How can a foreigner open a personal offshore bank account?
A foreigner has 3 main options in opening a personal offshore bank account: 1) apply in person at the bank, 2) apply through a legal representative at a bank, 3) apply online.
When we refer to the first 2 main options, the procedure will be the same – in the sense that the bank will apply the same measures. For the latter, all applicants must first verify if the bank of interest provides the possibility to apply online.
If this is possible, the documentation can be submitted online, by mail or through the online platforms provided by the bank and after the documentation is submitted, the client will be contacted by the bank.
The next step will be to book an online meeting with one of the bank’s representatives, during which various verifications will be done; the bank representative may ask for further information or documents.
If all goes well, the client will be able to set up the bank account. For this procedure, foreigners can also rely on our team, where they can obtain the necessary legal advice and any other information that can ease the application procedure.
What is the procedure to open an offshore account online?
Whether you want to open a bank account for a business or you want to open a personal offshore bank account, for the online procedure, similar steps have to be completed. First of all, it is necessary to decide on the type of account you want to set up and the options provided by the bank of choice.
For a personal account, you may be interested in setting up a deposit or savings account. Different banks have different types of accounts and in some cases, you may be interested in opening a type of account at a bank, and another type of account at another bank.
This option is absolutely possible, you can opt for to set up an offshore bank account at 2 different banks, as long as you meet the requirements of the banks of choice and, of course, if the bank approves the setup.
For individuals, there is the possibility to set up a single bank account – which refers to the fact the applicant is the sole owner of the account, or there is also the possibility to set up a joint bank account. The latter option is common amongst married couples or persons who have a very close and long family relationship.
With the joint account, 2 persons are the owners of the account and have the same rights to use the account and the capital deposited in the respective account. Once you have decided on the type of account of interest (and the conditions to set it up, annual fees and other associated costs), you can submit the documentation.
As mentioned above, you will need to provide personal identification documents – this is required by all banks, regardless of the offshore jurisdiction of choice. In some cases, you will be asked to provide evidence of having the necessary capital to make the deposit required for the offshore bank account.
In other cases, evidence of your residency in the respective country may also be necessary. Considering that you will open an overseas bank account, when you start the online application it is mandatory to have a secure internet connection.
Regardless of the country of choice or of the bank, you will need to fill out the forms provided by the banks and then to submit all the documentation. In some cases, if you send your online application during the business schedule of the bank, you can be sure that the banks will be able to process the application during the same day.
For applications sent out after the closing hours (or during weekends or national holidays), banks will process your application the next first working day. Additionally, banks will always demand to schedule a meeting with the applicant.
The meeting will be held via online means of communication and it must be organized as a video call type of meeting, so that a bank representative can verify the identity of the applicant. Once this step is completed and the bank approved the set up of the offshore bank account for personal reasons, the applicant must deposit the minimum capital.
The capital requirements vary in accordance with the type of account a person needs – in some cases, only a few hundred dollars are required and in others, capital requirements can start at $1,000. During this stage, the account holder must make a transfer from one bank account to another.
There is also the possibility to write a check (in countries where this option is possible). The law also allows individuals to deposit cash, but of course, this option is available only for those who are physically present in the location where the account is set up.
Or, if the bank has a branch office operating in the country where the person is currently living, a cash deposit can be made as well. You can rely on us for more details, including on how to open an offshore merchant account.
For more details on how to open a personal offshore bank account, pleasecontact our team. Of course, you can also reach out to our team if you want to set up a bank account for corporate purposes.
Our services also include full assistance for foreigners who need to set up anoffshore merchant account. This type of account is necessary for online sellers who sell their products to clients across the world.
Merchant account services providers will typically charge a fee per transaction, which can have a value of 0.5% to 5% from the value of the transaction, or even more, depending on the goods sold.
If you need to set up an offshore account for a business, it means that you will most likely be interested in theoffshore company formation, a procedure which is similar with the registration steps applied in onshore countries. Differences can appear depending on the jurisdiction of choice, but our consultants have the necessary legal expertise required for each country.