Banking

Opening a bank account for an offshore company is not always easy. What seems logical for you because of the international agreements you made with your international clients or what is best to do when it comes to international tax planning, is not always perceived as such by others. The bank employees and even compliance departments of the banks don’t always understand why a company is registered in a different country.

Often, agents, consultants and introducers who are active in the business of international company formation, introduce their customers to specific (offshore) banks. These banks are often located in jurisdictions where banking laws, KYC regulations and AML procedures are minimal.

The well known banks, who are active all around the world, like HSBC, BNP Paribas, UBS, Barclays and Deutsche Bank all have departments that focus on offshore activities and family offices. Unfortunately these banks don’t accept everyone as their customer. Mostly, a combination of the jurisdiction, net worth, business plan and structure of the company determines whether these banks accept a customer.

Startups and small business owners who choose a location like BVI, Belize, Seycheles, etc. often have difficulties getting access to the big and reliable banks. It is no wonder that during recent years many small and offshore banks around the world collapsed due to changing regulatory requirements, failing to comply with capital controls and solvability and liquidity issues.

Recently relatively small offshore banks like FBME bank, Banco de Madrid and National Bank of Anguilla went down. Bank customers ended up in a lengthy mud fight between regulators, government officials and central banks. Only this should discourage you to look further than just an offshore bank account opening.

Offshore banking by itself is not illegal, hiding it is! This is something people should realize before they start. The major reason people get away with it is that domestic tax authorities don’t have the (financial) resources, education and knowledge to investigate international money streams.