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 suggest, 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 on 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.
|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.
|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.
|Mandatory legal representation (yes/no)||Yes (some offshore jurisdictions can require foreigners to have a legal representative).|
Foreigners are entitled to set up the account in various currencies, such as well-reputed international currencies – dollar, euro, etc.
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
|It depends on the country of choice – it can vary from 1 business day to 2-3 weeks.|
|Options to set up
|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.|
Below, our consultants have 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 the bank 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.
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.
For more details on how to open a personal offshore bank account, please contact 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 an offshore 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 the offshore account for a business, it means that you will most likely are interested in the offshore 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.