Since Foreign Account Tax Compliance Act (FACTA) was enacted many innocent expats have been affected. Offshore bank accounts have been purged and now countries like the UK are considering following suit.
If you’ve ever wondered whether you could benefit from an offshore bank account, or you’re considering opening an account but you’re not sure which one to go for, this guide has been written with you in mind!
We take you right through the process of choosing the right account, and opening it. We examine the benefits of banking offshore and help you to find and open the best offshore bank account for your requirements.
We discuss why you have to choose your jurisdiction carefully, and how ‘know your client’ due diligence now means that it is harder than ever before to open an offshore bank account - but it’s not impossible!
How do I choose the right offshore bank?
Many banks advertise their various accounts on the internet, in fact the number and variety of banks and accounts on offer is daunting and the problem isn’t likely to get any easier with time as more and more account types and variations on the theme are becoming available from more and more institutions year on year.
Each back is vying for your business and attention.
So, how do you sort the wheat from the chaff and make sure that you select the best establishment for your money management needs?
Firstly, select your jurisdiction carefully, and pay particular attention to the local regulatory rules and regulations that govern the jurisdiction. After all, you need to be sure that any investment you make within an offshore centre is going to be secure.
When you have a particular location in mind consider doing a little research into which financial and banking big brand international names are located within your favoured offshore centre. Though this is not an exact science, chances are the jurisdiction is considered secure and legitimate if the larger international banks have offices there.
Now you’ve narrowed down your location options you will need to decide which institution is worthy of your business.
Do your research and find out who exactly is the money and security behind a particular bank and see if you can learn a little about the bank’s history in terms of its stability, security and customer/staff turnover - this due diligence is particularly applicable to those thinking about investing with a lesser known offshore bank.
Obviously if you’re considering opening an HSBC offshore bank account your research needn’t necessarily be so intense!
Make sure you’re happy with the bank’s general attitude towards its customers - there is nothing worse than ringing up for a balance inquiry and speaking to some stroppy employee who couldn’t care less about you and your needs!
Also, if you’re considering online banking make sure your connection to the bank is secure - further details about a bank’s security methods can usually be found on their website.
Which is the best offshore bank account?
The answer to this question will depend entirely on you requirements, your favoured banking jurisdiction and your preferred financial institution.
The key is to always stay in touch with your immediate money management requirements.
Many offshore bank accounts these days come with more bells and whistles than you could imagine! And chances are these features don’t come for free!
So ask yourself this -
“Which features of an account are essential to me today, and which features can I really live without?”
Often the ability to access and manage an account remotely - either via the internet, telephone or fax machine - is an essential requirement. If this is true for you, consider how you would like to be able to manage your account and make sure that option is available to you from your chosen bank.
If a plain vanilla deposit and easy access account is all you really need, then make that your goal.
If on the other hand you would like to save and invest through your favoured offshore institution consider the more sophisticated packages of banking facilities on offer from the institutions in your favoured jurisdiction. Check out their charge structure and what additional features they offer you in an attempt to win your business.
Money management techniques, interest rates, multi currency options, investment funds on offer - all of these points and more may be of importance to you if you’re looking for a more sophisticated banking package - make sure you get what you need and don’t accept less than the best.
Ultimately, when it comes to your money, you are the buyer and in this case, it’s a buyer’s market. Therefore you need accept nothing less than the very best because the banks and offshore financial centres are seeking your investment and commitment; therefore they have to offer you the features and security you desire in return for your commitment.
Finally, how do I open and access my offshore bank account?
Because there has been a global clampdown on the illegal use of offshore centres by the likes of terrorists for example, nowadays opening a bank account in any nation is harder than it was just 10 years ago.
Banks have to apply so-called ‘know your client’ due diligence to any potential customer. This means they will need to verify your identification and home address before being able to issue you with a bank account.
All banks have different levels of criteria they apply, so speak to your chosen institution and ask them how the procedure works.
Generally speaking you neither have to visit the country in which you wish to open an account, nor do you have to travel to the country to carry out any banking activity.
Most offshore accounts offered through legitimate organisations will allow you to carry out all your banking activity via the internet, e-mail, post, fax or telephone.
Furthermore, many offshore bank accounts offer full debit cards facilities as well as credit card facilities, allowing you easy and direct access to your funds at all times.
If after reading this article you believe that an offshore bank account is the solution to your needs you will need to think about the jurisdiction you favour, the financial institution most suitable for your needs and your preferred account type.
The internet is an excellent place to begin the next stage of your research. We also have an abundance of additional articles to guide your research.
If you’re moving abroad and wondering how to manage your money, an international account from Lloyds TSB for expats is a free and flexible solution
What is offshore banking all about? Can anyone have an offshore bank account? What’s the point of going offshore?
Examining the main types of offshore bank accounts that expatriates and offshore company owners can choose from
Examining the pros and cons of banking offshore for expats and internationally minded individuals.