Can I Open an Offshore Bank Account?

By far and away the most popular question we receive daily on our offshore advice form is ‘can I open an offshore bank account?’  This request comes from those requiring greater international flexibility for their accounts, those who are about to move abroad and so require an offshore account in the nation they are relocating to and also those who need such an account for confidentiality and taxation optimisation reasons for either their personal use or their company’s use.

The very simple answer to the question posed is of course ‘yes’ in the majority of cases – but there are a number of different considerations that everyone should bear in mind before they proceed to open an offshore account and what’s more, some people can simply get a free or low cost account from a high street bank whilst others require a slightly more robust and sophisticated structure.  So, if you’re wondering whether you can and should open an offshore bank account, this article should answer your main questions.

An offshore bank account is really an account opened in a jurisdiction other than the one in which you live – although most people consider true offshore bank accounts to be held in low or no tax jurisdictions.  There are mainly two basic types of account that you could consider – an offshore personal account or an offshore business account.  We will now look at the options and alternatives available to you depending on your reasons for requiring an offshore bank account.

Why Do You Want an Offshore Bank Account?

For greater flexibility and/or international access to funds

An offshore bank account can provide you with international access to funds, it can offer you the ability to transact in multiple currencies, have a credit or debit card, issue and receive cheques, check your balance online and such an account is offered by the vast majority of reputable banks including those on your nearest high street.

If you simply need a flexible or international account and you are not concerned about transactional confidentiality you could just speak to your bank manager…you do not necessarily need a complicated and more expensive offshore bank account structure.

To accept large transactions

Even if you have banked with a given institution for many years, if you are suddenly about to come into a large sum of money – in the form of an inheritance pay out, a royalties payment, commissions for a book sold or just a lump sum from an investment or a deal for example – the vast majority of banks will treat the money and you with suspicion.

If they accept the money – and many banks won’t – they will hold it for as long as they need to while they conduct investigations into the legitimacy of the source.  During this period you will have no access to funds in your account, you will be subject to financial scrutiny and you will have to provide any and all information and documentary evidence required of you to prove the legitimacy of the money.

At times like this an offshore bank account can be invaluable – but only if the source of the money is legitimate and you are able to find an agent with personal strong connections with a reputable bank who can introduce you, get an account opened without fuss, credit checks or personal references.

Remember, we have strategic business partners who can assist with the majority of our readers’ offshore banking requirements and you can have access to their expertise and solutions via our offshore advice service page. 

To accept international transactions

If you’re in regular receipt of international transactions it can make sense to establish an offshore company structure in a jurisdiction like the Seychelles where no tax is levied on income generated outside the jurisdiction and where such a company is not required to fill out annual financial or activity reports.  Such a company can then open and hold an account which can be used for international personal OR business transactions.

Such an account can be in various currencies if required, it can offer an account holder maximum flexibility whilst remaining private and it can also be fully taxation optimised depending on the account holder’s personal circumstances.

Because I’m moving abroad

If you’re moving overseas you have a number of choices available to you – you can let your current bank know and they may change your account type to be an international account.  This usually only incurs minimum charges but do ensure you ask about fees and charges up front.  You can then use this account to pay bills back home and conduct international transactions.

Alternatively or additionally you can open a personal account in your new country – it’s often impossible to do this before you go because you need to prove residency in the country to open an account and you need to personally be present with your passport or alternative proof of ID to open such an account.  Therefore, the most commonly chosen method of approach by expatriates is retaining use of their old bank account whilst they establish themselves in their new country at which time they open a local account and gradually move all transactions over.

The final alternative is opening an offshore bank account.  For those who want the minimum of hassle, fuss and work this is most easily done by opening an offshore company off the shelf and then using this company to open you the bank account.  You therefore don’t have to be present in any given country at any given time and you can go on to use this account for all your transactions at home or abroad.

For confidentiality and/or taxation optimisation

If you require an offshore bank account for confidentiality and legitimate taxation optimisation purposes it is often possible to achieve such aims – BUT it depends on your personal circumstances and you should take advice.  Because of OECD, EU and international rules relating to financial disclosure those who want maximum privacy never select an offshore personal bank account – this is because such an account provides no confidentiality security provision 99 times out of 100.  Again, such aims are usually achieved with an offshore business account held via the most well optimised offshore company structure.

Finally, in conclusion and in answer to the question posed – namely ‘can I open an offshore bank account?’ – the answer is usually ‘yes’ but as you can see not everyone has the same requirements of an account and therefore not everyone requires the same sort of account.  We always emphasise an individual’s requirement to take informed advice from an expert which is why we set up our offshore advice service in the first place.  We are not qualified tax or financial advisers, any information we give does not constitute advice – but our strategic partners are expert in their field and you can have access to them via our offshore advice service form.