As you can perhaps imagine, we get no end of enquiries from people all over the world who want an offshore bank account. The enquiries we receive show that a lot of expats believe they may have to pay through the nose for such a service, and that ultimately what they’re seeking from a bank account solution is simply maximum flexibility.
The truth is that the services most people are seeking are available from free or low-cost international accounts…and you don’t need to come to us directly to be referred to someone who can help you. All the leading banks and building societies offer international/offshore accounts for qualifying individuals, as we will now explain.
If you are seeking a more complex structure however, then yes, there are offshore bank account solutions that could benefit you – they are sometimes wrapped up with an offshore company structure as well. In this report we’re going to explain the different types of accounts, who can benefit from them and how to get one set up.
Offshore Bank Accounts Defined
An offshore bank account in its simplest form is simply an account held with a bank located in a jurisdiction other than the one in which you’re living – i.e., an offshore bank!
Typically the term ‘offshore’ is applied to jurisdictions where there are some tax advantages. Many offshore banks are located in havens such as the Channel Islands, Switzerland, and The Isle of Man etc.
Just because an account is offshore does not mean that you can shield your income within it from taxation however! More about that in a moment…
International accounts are almost always offshore accounts – but not all offshore accounts are international accounts! An international account is one that gives the account holder flexibility in terms of money management. These accounts typically benefit expats living abroad who perhaps have assets, wealth or liabilities in more than one nation.
The account structures typically allow for ease of international transfers, transfers between currencies, the ability to access and manage money from anywhere in the world etc., and as stated they are often of maximum benefit to expats and those working abroad or who have a property overseas for example.
Some international accounts are multicurrency accounts. These accounts allow you to bank in more than one currency beneath one bank account number umbrella – again, adding an extra layer of flexibility to an account for an account holder.
As stated not all offshore accounts are international accounts according to the above definition. Some offshore accounts are provided simply for privacy, security and the close handling of a client’s wealth. International flexibility is not a requirement for some people when it comes to utilising an offshore structure! For such individuals an offshore private bank account may be sufficient, for others it’s a case of having an account that is associated with an offshore company structure which is perhaps also wrapped within a trust structure.
How to Open the Right Offshore Bank Account
Reading the above definitions of the different types of offshore bank accounts available, you may have identified with either needing maximum flexibility or desiring maximum privacy. Whilst it is possible to enjoy some flexibility from a private or company account, and it is possible to have a degree of privacy with an international account – generally speaking you get one or the other.
If you are an expat and you want a bank account that is as international as you are, look at what the leading banks are offering in terms of suitable accounts. We recently compared and contrasted the main offerings from leading banks in our article ‘who offers the best offshore bank account for expats.’
However, fees, terms and conditions change all the time, so do some googling and online research to see which bank or building society offers you the most appropriate structure.
If you’re seeking privacy from a bank account, or you specifically want a business account offshore, if you’ve faced bankruptcy in the UK or you need an offshore account solution quickly, then perhaps a bespoke business offshore bank account and offshore company formation solution would suit your needs.
You can learn more about these structures in our articles: -
Instant offshore bank accounts
And
Seychelles offshore company and a guaranteed bank account
How to Get Your Hands on an Offshore Bank Account
The simplest way for expats to open offshore bank accounts if they’re looking for flexibility etc., is to directly approach their banking provider of choice. You have no need to go via a middleman. As stated you may find that such an account is free, (although you usually have to have a minimum account balance on deposit or invested to avoid charges), or you will face low monthly fees.
If you’re seeking a private account you usually need an introduction to such a bank – international accountants and offshore financial advisers usually facilitate such introductions…although we can refer you to an introducer for a private bank in Monaco if you require.
If you’re looking for a business bank account solution, once again you can contact us for a referral, alternatively there are service providers out there who claim to be able to assist. We would urge you to seek testimonials from them from satisfied customers first, and to ensure that they really do guarantee you a bank account however, as a typical scam is to take your money, provide you with an offshore company and then make you jump through a million impossible hoops to get a bank account in place.
A Final Word About Taxation and Offshore Bank Accounts
Above we mentioned that even if an offshore bank account is held with a bank in a so-called tax haven, that doesn’t mean you can automatically and legitimately shied your account balance from tax.
Your tax liability is determined by factors such as your country of tax residence and their rules about the taxation of your worldwide assets. Additionally, you are likely to have a reporting requirement to your nation of tax residence, even if taxation is not due on certain assets for example. Expats typically have a complex tax situation – often exacerbated if they hold assets in more than one nation, and have financial liabilities in more that one country.
Ignorance is not an excuse when it comes to tax – which is why we always urge expats to seek personalised taxation advice from an international accountant…and to never assume they don’t have to pay tax if they keep assets offshore.
