| OFFSHORE
BANKING Offshore
Bank Accounts When
you come to us to set up an offshore account you will find that, unlike other
companies our site does not direct you to a payment page, take your money and
then direct you to a series of links. You will find many companies that tend to
do this but it is a pointless way to assist clients with setting up an account.
The reason for this is that, if you are directed to a series of forms but not
provided with the advice to enable them to be correctly filled in the whole application
process will become extremely difficult. Without sound advice all sorts of problems
often arise. To give you an example, the items below have been mentioned by clients
in the past and are good examples of the nightmares which can crop up. -
Mrs N went to a company she found on the Internet intending to set up an account
in Italy. She registered the account to a UK address not realising that the Italian
Tax Authorities report accounts held by UK residents to the UK tax collector,
HMRC! Had she opened the account and given the address of her home in Florida
this would not have arisen because there is no automatic exchange between Italy
and the USA. The problem was she did not speak to anyone and was simply pointed
to some forms to complete with instructions to fill them in and send them direct
to the bank.
~~ -
Mr and Mrs S, who live in South Africa, were buying a second home on a golf course
in Faro, Portugal and went to a so called banking expert in the Isle of Man. Following
a discussion with him they decided that, to avoid local tax and currency hassles
in South Africa, they would register the account - which was being set up in Portugal
- to their second home in Ireland. This seemed an option on the surface but the
reality was that the South African tax collector would never have received information
from the Portuguese bank whereas there is automatic exchange of details between
Portugal and Ireland under the EU savings tax directive.
~~ - Mr
N went to a firm in London who advised him that, if he needed an account for British
clients to credit pounds at a High Street bank in the UK, a branch in Gibraltar
or Jersey was ideal as both were offshore but accessible through any High Street
bank. He opted for Jersey and they informed him that he needed a mailing address
and phone number outside the EU to avoid Jersey reporting the details under the
requirements of the EU savings tax directive. This was wrong because Jersey pays
a proportion of the interest to the UK government but does not disclose any information
about the actual account holder's identity. As a result, Mr N paid around €700
or £500 for an address and phone number outside the EU which he did not need.
Okay, he would pay a bit of tax on the interest but, as the account was to enable
him to access his funds via an ATM, the balance was never going to exceed £4000
or £5000 at any particular time. In any case, the deduction by the bank would
have been no more than £25 per annum! He had therefore wasted £475! Had he opted
for Gibraltar he would have found that they accept UK cheques at any UK Barclays
for credit to a Barclays Gibraltar account but, if his clients wanted to pay with
cash, they would not accept it as cash credits via the UK to Gibraltar are not
permitted by the Gibraltar Government so this would have made the account pointless.
The
above are just three examples. Fortunately, we put the people on the right track
and sorted everything out. These examples simply indicate that it is an absolute
minefield trying to get it right because you can sometimes phone five so called
experts who give five different solutions and, in many cases, they do not have
a clue what they are doing and will simply send you a pile of forms and leave
you to get on with it! We favour a hands-on approach where we speak to you about
your circumstances and needs before we do anything. Once we work out the options
between us, you complete the forms for the chosen bank and we then check them
prior to submission to the bank. The
banking arrangement needs to be 100% right because offshore banking and card facilities
are central to all tax efficient trading, savings or investment structures. Of
course, the type of financial arrangements currently available can range from
a simple account with a debit or ATM card right up to a comprehensive banking
solution involving multiple currencies and a whole variety of sub accounts with
various credit and debit cards. The key to getting it right lies in determining
exactly what is needed to achieve the required results. Matching our clients to
the right account is our area of expertise; normally a quick conversation on the
phone or an exchange of email enables us to pretty much define the ideal solution
for your particular needs. After all, there is little point in going through all
the hassle and expense of arranging a high maintenance structure involving merchant
and bank accounts when a simple account to receive funds which is, in turn, linked
to an international debit card and perhaps a PayPal account (see www.paypal.com)
will meet all your day to day needs. An additional point which should be considered
at this time is that, the more complex the arrangements are, the more expensive
and time consuming they will be to set up. For example, to set up a straightforward
account and debit card we need only one piece of ID, to set up most bank accounts
we require notarised or certified passport copies, utility bills and often bank
references. This
section provides details of our most popular tried and tested accounts which we
arrange on a daily basis although, after over 20 years in the business, we have
so many bank contacts that this list is, in reality, only a small cross section
of what we provide. If you do not see anything here which is ideal for your personal
needs, contact us because we provide numerous bespoke solutions tailored to meet
your exact requirements. Our primary aim is to offer our clients a comprehensive
range of banking facilities. These facilities include offshore personal and corporate
accounts, high yield savings accounts, ATM and debit card based accounts and confidential
numbered accounts. The requirements for passport copies and other ID documents
when opening accounts can be a concern to individuals and corporations wishing
to retain a low profile in these days of continual snooping. It is important to
keep in mind that, regardless of the pressures from the OECD and the EU, rock
solid banking secrecy still exists in many reputable jurisdictions such as Austria,
Luxembourg or Switzerland. Other banking centres such as Panama, Nevis or Cyprus
also maintain high levels of discretion. Some
countries have become so obsessed with money laundering and dirty money that things
have gone well beyond what is needed to prevent the proceeds of crime getting
into the system. In both the US and UK, bank employees are now effectively government
informers under threat of draconian penalties for failure to inform government
of even trivial irregularities. This is the opposite of many offshore jurisdictions
which impose heavy fines and prison sentences on bank employees who breach the
privacy of account holders. Although
most clients will not have a problem with banks ID requirements, if you have particular
worries let us know, we are here to assist you. We can generally deal with most
ID problems that arise as various alternatives exist. For example, some banks
insist on a passport but if you do not have a passport they will often accept
a certified driving licence copy. The key to successful offshore banking lies
in selecting the correct location to fit you requirements. An illustration of
this is that, whilst the Channel Islands are defiantly not ideal for UK residents,
they are OK for Canadians; the Bahamas are not good for an American but generally
fine if you are European, and so on. What we have endeavoured to achieve here
is to offer a selection of facilities that offer the most flexible range of facilities
to meet our clients' banking needs back
to top THE
MYTHS, HALF-TRUTHS AND WHOLE TRUTHS ABOUT OFFSHORE BANKING Offshore
banking is not illegal, immoral or unethical although many people think there
is something unsavoury about it. Exact
figures of how much money is held offshore are difficult to come by but US studies
estimate that offshore banking has grown by an astonishing 30% to 40% annually
over the past five years. Although there is no official statistic, it is believed
that at least 65% of the worlds money is kept offshore in a number of leading
finance centres, the biggest of these is still Switzerland by a large margin but
the Channel Islands, Isle of Man, Panama, Andorra and numerous others such as
Dubai all want a slice of the action. Amazingly, even the US has its fingers in
the pie but more about that later. back
to top What
is an Offshore Bank? An
offshore bank is any bank that operates outside the jurisdiction of your country
of residence. It is, however, important to be mindful of any exchange of information
agreements in the case of personal accounts. For corporate accounts this is not
an issue. The key is to keep in mind that branches of Barclays, or of Citicorp
located in the Bahamas, are subject to the laws of the Bahamas not the laws of
England or the USA. For the same reason, UBS in the UK or Italy will not be able
to offer the same level of secrecy as UBS in Switzerland. back
to top Where
are the best banks located? For
general efficiency, you cannot beat Switzerland or Liechtenstein. Most Austrian
banks are good as are banks in Cyprus, Austria, Luxembourg and several Caribbean
locations. Dubai is also very up and coming, as are Hong Kong and Singapore, since
the European savings tax directive took effect in July 2004. Many formerly good
banking countries are no longer worth considering. Latvia is grim, to put it mildly,
no end of reputable clients have been to hell and back with all sorts of hassles
which involved Latvian banks. What
about the UK Banks? The
UK used to be quite good but these days quality banking services are limited to
the more well healed Private Banking clients and the total overkill on the due
diligence requirements makes the application procedures a nightmare for many non
residents. Unfortunately, in the UK Mr. Average has to put up with what must be
one of the worst domestic banking systems in a developed country. The fact is
that banking in the UK is more like something from the third world but this is
probably because most UK banks use call centres in places such as India. With
most UK banks you cannot even call your own branch anymore, you get through to
someone in Delhi or Bangalore who is completely clueless and sounds like a cross
between an automated system and a sub human. Sometimes you do not really know
for sure which it is! In reality, they can do little more than tell you your balance
without going away and making further enquiries. If you need a UK account, and
we accept some clients do, we can arrange it but it won't be easy or fast - whatever
anyone else tells you! - and the paperwork is a real source of stress with endless
details required. You
are probably asking whether we can recommend any UK banks. The answer is yes but
only two and they are both owned by the same parent company. If you need a UK
account we tend to recommend NatWest or Royal Bank of Scotland because they are
not bad generally and you can at least call your branch direct. Most reports we
get from UK clients seem to support these two banks with both Barclays and Abbey
getting a consistently bad feedback although HSBC is not bad because of the international
dimension. The worst of all seems to be LloydsTSB. Maybe you have a story to contribute
about UK banks and, if you do, we would love to hear it. Back
to top Why
Bank Overseas? When
you deposit your money in an offshore bank, your account is subject to the privacy
laws and regulations of that particular country. For example, the US or UK government
is powerless to investigate anybody's activities outside the US or UK without
the consent and active cooperation of the country in which the investigation is
taking place. Moreover, unless you are an international terrorist, a major drug
dealer or a fraudster, most governments are very reluctant to assist with an investigation
into your financial affairs. It is even more difficult to get cooperation from
countries whose laws differ from those in the country seeking the information.
For example, tax evasion is not a crime in Switzerland but, in most other countries,
it is a serious crime. Shipping of tobacco products such as Cuban cigars from
Canada to the USA might be a crime in the USA but in Canada they are totally legal
hence a massive black market in illicit cigars. Whatever your business, it is
a case of picking the right location to keep things within the law. If you are
cautious and keep everything on the level it will all run smoothly. The key is
working within the rules. Example:
Some countries such as the Bahamas and Andorra do not levy income tax. Therefore,
since income tax evasion is not a crime in those countries, they are loath to
help any government investigating anyone suspected of tax evasion although the
Bahamas does tend to be helpful towards the US due to its close proximity so we
do not recommend it as a good banking location for American citizens. A
further advantage of banking offshore is that it is virtually impossible for non-governmental
snoops such as private investigators, family members, business associates etc.
to find out anything about your financial affairs. This is because, firstly, they
need to know where the account is and, secondly, the security procedures in most
offshore centres are so rigid it is hard for anyone to bluff their way round them. The
degree of protection of a depositor's privacy and confidentiality differs from
country to country. Switzerland is one of the most vigilant protectors of privacy
and the privacy culture is endemic within the entire banking system while Monte
Carlo, France and Italy offer little more privacy to its residents than the UK
or US. Back
to top Whatever
Your Personal Reason for 'Going Offshore' It
is important to keep in mind that there are many offshore centres with large numbers
of high quality banks which are very happy to provide you with a discreet private
banking service. The vast majority are secure, perfectly respectable and as experienced
as your home bank. Unfortunately,
whatever the advantages offshore jurisdictions may offer, some accounts can be
as awkward to open as those at home and, in many cases, more so! Our job is to
simplify the process as much as possible by smoothing the path through our knowledge
of each banks' particular procedures. The
setting up of all offshore facilities requires careful planning to avoid making
errors. By nature, some facilities are always a compromise but it is in the area
of the banking and financial arrangements that exceptional care is needed because
these services are the most crucial to success or failure of both a business and
in the area of personal financial planning. Unfortunately, the banking arrangements
are the most complicated part of the structure to put in place so defining exactly
what is needed is absolutely imperative. An example of how things can go wrong
is illustrated by a client who came to us after contacting an offshore service
provider who had sold him a Belize company with banking facilities in Anguilla.
At first sight this was fine except the client earns 80% of his money (around
$60,000 per month) from eBay and could not link his PayPal account to the Anguillan
bank account! A complete disaster and he had pointed out what he was doing from
the outset. Fortunately, we solved the problem for him by setting up a new PayPal
account and a bank account in Singapore and this is working fine because over
half of the items he sells originate there and he can transfer direct from the
account to the suppliers. The
key to getting everything right lays in balancing the need for confidentiality
with the need for day-today operational capability. Many clients ask us how confidential
their accounts need to be. We can usually determine this based on a few simple
questions; if you are a non tax payer living in several different countries over
the course of the year absolute confidentiality would be unlikely to be the number
one requirement as your tax position would most likely be favourable already.
However, if you move around a lot then ease of use would be important and a first
class online banking system becomes essential. In this situation, an efficient
bank in one of the middle of the road finance centres such as Jersey, the Isle
of Man, the Bahamas or Cyprus may be a good choice. This is because they offer
an ideal compromise between discretion and ease of operation. If, on the other
hand, your primary goal is to ensure that no one can possibly discover who operates
and controls the business and its bank accounts then choice of location is going
to be more restricted. Back
to top The
Rules of Successful Offshore Banking
1.
Do not link your onshore and offshore accounts together. If you transfer money
directly to your Offshore Account or pay in a personal check, even if it is only
once, your account is no longer secure! If you get divorced or entangled in litigation,
a good private investigator could trace the account. The key is to keep your offshore
and onshore facilities entirely separate as mixing them up can lead to all sorts
of nightmares! Even better, if you are actively trading, why not accept payments
by credit card? The credit card processor transfers the payments direct to the
bank on a weekly or daily basis and sits between you and the client giving an
extra layer of security. 2.
Do not receive your statements at your home or office. For maximum security opt
for internet banking. This makes sense for a number of reasons but, with identity
theft rife in most countries combined with the ever present threat of speculative
litigation, why have paper records lying around? Even I forget to shred old statements
occasionally and the risk is always there whenever you throw something out. The
increase in security that doing everything electronically provides is invaluable.
3.
Make sure you leave details of your offshore account where it would be found if
you died. Unfortunately, catering for this eventuality is difficult without compromising
security while you are alive. Banks love clients who die; they end up sitting
on piles of cash! Some bankers call it windfall profit. If
you live in the UK whatever happens do not discuss your offshore accounts with
your accountant or solicitor. If they have even the slightest suspicion of tax
evasion or any impropriety they are obliged - since March 1st 2004 - to inform
the UK government. You might be 100% on the level but they might not see it that
way. 4.
Be discreet. Your partner today could be your enemy tomorrow. A client of ours
once said "I never really knew my wife until I fought it out with her in Court".
The fact is 80% of problems tend to originate from ex business partners or lovers
who want revenge. A colleague recently fell out with a business associate of 12
years standing due to putting a deal his way which lost him some money. The loss
was beyond his control because it turned out that the client he introduced was
a scammer. What had been a close business relationship descended within weeks
into an attempt to destroy each other. Fortunately, our client had never disclosed
much about himself on a personal level and, as a result, he got through it although
his counter attacks will probably undermine his opponent for years. 5.
Live a low profile. Don't go around dripping in gold like Mr T, who played BA
Baracus in the A Team, or drive around in over flashy expensive cars! Neighbours
can be very jealous and vindictive which can cause them to spread malicious and
unfounded rumours which often invite unwelcome attention. 6.
Don't take risks. It is vital to have a structure that you can operate on
a day-to-day basis which will not become an administrative nightmare. Try to keep
a few good accounts in the right locations. Back
to top |
