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Selecting a bank, gathering initial information, making an application for pre-approval
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USD 500
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Collecting documents, making and submitting a proper application, further interaction with the bank
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from USD 2 000 (depending on the bank)
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You fill in a special questionnaire which helps us to get to know you and your business closer, in order to offer you a choice of several banks that are best suited for you to open an offshore account at:
Based on the questionnaire, we make an initial pre-approval request and send it to the bank.
To increase your chances of getting a positive decision, you can apply for pre-approval to several banks at once.
After the bank has given its pre-approval to offshore account opening, we help you to put together a package of necessary supporting documents for your application and correctly fill in the bank forms, after which we send the application to the bank. From then on, we take care of further interaction with the bank.
It consists in the successful opening and activation of your offshore account when you only need to receive the account details and Internet banking codes. At this point, the process can be considered completed.
*The list is not exhaustive. The bank may request more documents and information.
**Depending on the business activity of the company and the chosen bank, a company may be required to have economic substance (an office and employees) in the country of incorporation. We can provide these services in a number of jurisdictions: please contact your consultant for details.
Effectively, there is no limit on the number of accounts or jurisdictions where you can open an account for an offshore company – unless you are establishing an insurance firm and have to deposit insurance proceeds in certain licensed banks.
Many jurisdictions do not require a company to have a bank account locally, where it has its headquarters, i.e. registered office. This is the case in all offshore jurisdictions, as well as in some other countries. However, Switzerland, the Netherlands or Austria make it a mandatory condition.
If a company holds several accounts at different banks and is taxed in its country of incorporation, it is obliged to provide bank statements for all its accounts when filing tax returns.
Recently, the banking services market (opening bank account overseas) has been quite busy, no matter what: over 160 European, Asian and American banks more or less actively co-operate with our clients.
The most important characteristic of an offshore bank, which is one of the criteria of its reputation, is its geographical location. It is usually the location of a bank that is of greatest interest to clients who want to open an account abroad. However, the choice of a bank should not be limited just to the reputation of the country or the fact that this is where your business partners are. This may lead to a wrong decision because as a result you may end up working with a bank that falls short of your requirements. For example, you may encounter rather high fees and charges, compliance people being wary of the jurisdiction of your company, and bank employees behaving differently than in your home country.
Of course, the geographical location of the bank must also be considered, but the most important thing is the convenient operation of the account and the bank’s suitable specialization.
From the outset, it is important to bear in mind that there is no such thing as an ideal foreign bank account, or an ideal bank, or an ideal client. So it is best to look for a bank at which an account would be most suited for your business needs.
When a foreign bank account is being opened for a company’s operations, this usually means that the client will make frequent transactions abroad. If this is the case, such a client should better opt for a bank that does not limit the number of payments (incoming and outgoing).
When choosing a bank, it is also advisable to consider a number of other factors. Where does the offshore account opening procedure take place geographically? Does the bank have any requirements for the initial deposit and minimum account balance? Does it offer transactions in different currencies? What are the bank fees and account management procedures? Does the bank have any staff speaking your native language? Do you need to provide any reference letters? How complicated is the account opening process?
To open an offshore account, the first thing you need is a set of apostilled company documents, with a recent apostille date. If the company was established a while ago, you are going to need additional documents: a Certificate of Good Standing, which is equivalent to an extract from the companies register, and a Certificate of Incumbency, a document containing information about the directors and shareholders of the company. It is also necessary to provide resolutions appointing directors and issuing shares, share certificates and a trust declaration.
The client must produce proof of identity (passport and/or ID card). When a passport or ID card expires, the bank may request a copy of a new one. The bank will also require copies of passports/IDs of the director, attorney, shareholder and beneficial owner of the company, as well as proof of their address. Proof of address, as a rule, will come in the form of telephone/utility bills or a bank statement sent to the client’s address.
In some cases, a foreign bank will ask for a reference letter from another bank or your business partner. The reference letter should be issued by a ‘recognized’ foreign partner with an existing company (it cannot be one of your companies!), with an existing business and the name searchable in the public domain (directories, the Internet, etc.). The reference must be written on the letterhead and contain the details of the company that issued it. The name of the signatory on the reference must appear next to the signature and be legible.
Every bank has its own requirements for verifying copies of submitted documents. Most banks have their own staff certify copies of documents, but others may ask that copies be certified by a notary public or that original documents be temporarily provided to the bank for review and examination.
Banks do not open personal accounts for an individual’s business activities: business and personal finances must be clearly separated. However, it is still possible to transfer profits distributed by a company to a personal account if the account holder is a beneficial owner of the company.
From a technical perspective, a transfer from a current account of a legal entity to a personal account of an individual is not a problem, but, for example, the sending bank or receiving bank may have their doubts. In such cases, questions may arise about the origin of funds. Due to their anti-money laundering commitments, lenders and financial institutions are legally obliged to ask these questions in such cases. The movement of funds in a personal account should not have signs of a regular business activity as banks closely monitor these transactions.
Personal accounts are usually opened at banks in Switzerland, Austria and Luxembourg. In this case, a bank may require a minimum account balance between USD 500 and USD 500 000 as an ‘entrance ticket’, also expecting this amount to increase over time.
In some cases, you can use an offshore company account as a personal account as well. For example, if you need to buy real estate – not in your name, but in the name of your controlled foreign company.
It is important to note that some countries may require their citizens to report to the tax authorities personal accounts/deposits held at foreign accounts, but will not extend this reporting requirement to foreign companies owned by such individuals.
The process for opening accounts at foreign banks that traditionally offered services to offshore companies has now become more complex. The stricter client onboarding requirements are the result of recent reforms in the banking systems of European countries that have joined the European Union and wish to follow the EU banking directives. The client must now provide the bank with detailed information about all persons involved in the company structure, about the company’s activities and the purpose of the bank account.
Only authorized individuals can open, maintain and close business accounts at offshore banks. Firstly, it is the director of a company, and secondly, the company’s attorney – a person who holds a power of attorney specifically authorizing them to open and close accounts. The bank must keep all information about this person (a copy of the passport signed by them, bank forms, etc.). In case of change of signatory, the client must notify the bank and follow the bank’s procedures for changing the person responsible for the account.
Due to the spread of Internet banking, full information about the balance of and transactions in an offshore account is now available online. Clients can not only check the balance of account, but can also make payments without having to call the bank or send a fax. Recently, even the most conservative Swiss banks have begun to provide access to online banking systems, but usually with certain restrictions: clients can check the balance of their accounts, but cannot make transactions.
If you open an offshore account via meeting with a representative, you must provide detailed information about yourself and your business and be prepared to answer questions asked by the bank, including questions about the source of funds. You must provide telephone and fax numbers, email address, business and home addresses. You will also need to fill in and sign bank forms at the meeting.
First of all, the bank will ask for specific information about your business and the expected turnover of funds in the account. Questions about the activity and nature of your business should not be answered monosyllabically (e.g. ‘trading’); a better reply would be ‘brokerage in trading of petroleum products’. The banker may also ask you about your trading partners and what the entire trading chain looks like. What, where, and from whom do they buy? What, where and to whom do they sell? The banker conducting an interview will usually ask indirect questions to verify the truthfulness of the information provided. For example, if a client says that the company’s core business is gold trading, the banker may ask directly, ‘What is the current price of gold per ounce?’. The process of opening a foreign bank account is only simple for ordinary import-export transactions. If, however, the business involves real estate, investments, loans, etc., everything must be explained in detail.
In some cases, the bank asks the law firm representing the client to write a letter of introduction to present the client to the bank. This letter should describe how the company is managed, what its actual (existing) business is, and what its operations have been in the recent years.
In some cases, the bank may ask for a detailed business plan, a list of partners with whom business will be conducted using an account at this bank, etc.
We also think it wise to bring to the interview some business cards or advertising materials explaining the company’s activities.
Every bank has its own criteria for ‘suspicious’, but they basically boil down to numbers (volume, importance, frequency, quantity, etc.). Therefore, when opening an offshore account, it is advisable to discuss the criteria in detail with the bank representatives and in the future notify them of any changes in financial flows. This is an ideal way to build a relationship that bankers will naturally appreciate.
If a bank suspects or has reasonable grounds to suspect that money in an account is linked to any criminal activity or terrorist financing, the bank must immediately report its suspicions to the relevant financial intelligence unit.
In addition to their existing current account, some clients may need other banking products, such as a merchant account, brokerage account, non-recourse deposit, or escrow account. These products can be sourced from the bank where the company holds its business account or from other banks. A client must first decide which type of instrument they need and then check whether a particular bank can provide it.
Some credit organizations allow their clients to immediately use some of non-standard products when opening an account.
Each offshore bank offering non-standard products has its own array of instruments and it charges a separate fee for them. Keep in mind that these services will usually be more costly than similar products offered by banks specializied in these instruments.