An International Bank Account is a bank account in a country other than the one which you are a citizen. If an American were to open a bank account abroad, it would be considered an international bank account. International banking, or an offshore bank account, commonly refers to accounts opened in financial havens such as the Caribbean Islands, Cyprus, Luxembourg or Switzerland. Offshore, in this case, refers to banks that are not located in Great Britain, where the term originated. Perhaps as much as 50 percent of global capital flows through offshore banks. These banking jurisdictions offer the most privacy, stronger protective legislation and global availability of your deposits.
Offshore Bank Account Opening
Opening an international bank account is not significantly different than your domestic account. You provide your personal information and identification, a reference or two and your opening deposit. When opening a bank account abroad, your US Passport is generally required. In addition, you will need a proof of residence, such as a utility bill, among a few other items. The items needed depend on the institution’s requirements and local and international regulations.
An offshore bank may request reference documents from your present bank, focusing on the average balances and whether your relationship with the bank is satisfactory. This requirement is generally satisfied by producing up to a year’s worth of bank statements.
In some circumstances, the offshore bank may want to verify the source of funds going into the account and the type of transactions you expect to employ. This is for the bank’s protection, as offshore banks are under considerable pressure to ensure they do not engage in illegal activities.
Proof of Source of Funds
If you are employed, a pay stub should prove satisfactory for certain fund verification. Money from real estate or business transactions may require proof of origin via contracts, closing documents and the like. A letter from an insurance company should suffice when depositing funds from an insurance contract, and if the money is inherited, the executor or personal administrator of the estate can send a letter to the bank establishing you as the beneficiary. The offshore bank may inquire about your investment income and where your investments are held.
The advantage of having Offshore Company establish your account is that we are eligible introducers. So, we can establish your account for you without you needing to travel abroad.
Offshore Banking Tips & Advantages
When you bank internationally you are taking advantage of various features of the foreign jurisdiction. In some jurisdictions offshore banking privacy is taken so seriously, providing information to unauthorized parties is a crime for bank employees. An international bank account can be a great privacy tool and in order to maximize your financial privacy, the bank account is opened in the name of an offshore company. US people are taxed on worldwide income. So it is important to follow the laws and obtain tax and legal advice.
Because operating costs are usually lower, offshore banks often offer higher interest rates than domestic banks. If you are living in a country with an unstable currency or political environment, depositing your funds offshore is one of the best ways to safeguard your investment. If you are concerned about your government freezing your bank accounts, that is usually very hard to do when your money is held in an offshore bank.
Offshore accounts are also good places to hold money if you want to send funds to friends and relatives in those countries. Perhaps a loved one living in another country left you an inheritance, and opening an account in that country is the simplest way of accessing your money. If you travel a great deal to certain destinations, you may want to avoid having to carry large amounts of money with you on the trip, and opt for a foreign bank account instead.
Why Open an Offshore Account?
One of the strongest arguments for establishing an offshore bank account is diversification. Just as a well-rounded portfolio consists of stocks, bonds, real estate, precious metals and the like, asset diversification increasingly means more than just putting your money in different asset classes. It also means geographic and geopolitical diversification, which you can achieve with an offshore bank account. Keep in mind the current US national debt is at all-time high, topping $22 trillion as of this writing. Those numbers mean even the US is vulnerable
International bank accounts held by offshore companies and/or trusts offer the most in personal financial privacy and asset protection. Banking offshore is also a great way to participate in international investing opportunities. This organization opens bank accounts in all major international jurisdictions and acts as an eligible introducer to Switzerland’s strongest banks.
Choosing Your Currency
Unlike most US accounts, an offshore bank allows you to choose between different currencies in which to hold your funds. Many investors prefer to hold assets in a variety of currencies so that they are less affected if the dollar’s purchasing power declines.
However, while there are many advantages to choosing between various currencies, there are also drawbacks. You could end up owing foreign taxes on interest earned. If the country in whose currency you have invested experiences a recession, currency devaluation is possible. That means the value of the assets in your bank account could fall. There is always the possibility of regime change in a country, and the subsequent nationalization of banks.
While the latter is unlikely in most countries, keep in mind that many countries do not have the cybersecurity strength of the US. So, the odds of experiencing identity theft or similar cyber-crimes increases slightly. In addition, many countries do not have the same consumer protection laws as the US. Investigate the consumer protection laws of a nation before opening a foreign bank account. Better yet, contact an organization with experience on opening offshore accounts. Our organization is the largest worldwide on assisting people who need international bank accounts.
Changing currencies in the process of making deposits and withdrawals can often involve exchange fees. The exchange rate remains a constant factor in currency conversion.
Get Professional Help
So, the reasons above strongly support why it so important to have professional help when opening an offshore bank account. Our professionals know which bank have treated our clients well. We know which bank will open accounts for people who reside in your country. Moreover, bank safety is a strong desire for our clients, so, we regularly research the solvency of the banks before we recommend them. There are numbers above for you to discuss your needs with a professional. Alternatively, you can complete the free consultation form on this page.
Fund your offshore bank account via wire transfers. There is one small consideration to these transfer when made to an offshore bank, and that concerns the fees involved. Unlike wire transfers made between domestic banks, international wire transfers involves fees charged to the customer whether funds are sent or received. There is no standard fee, so potential international banking clients should look for institutions offering the best deals. Notably, offshore banks do not typically utilize checks (cheques). So, the best options are wire transfers.
Withdrawing funds from your offshore accounts is generally simpler. This is because your bank should provide you with an ATM or debit card. That way, your money is easily accessible worldwide. Now, these transactions are also subject to reasonable fees. Rarely, an offshore bank will offer checks, but this is not a suitable method of withdrawing funds for many clients. When an offshore bank issues checks to a client, the confidentiality aspect diminishes. It is also difficult to cash a check drawn on a foreign bank domestically, and cashing such a check may require a long waiting period.
A good alternative is using two accounts, in a domestic and offshore bank, respectively. Via wire transfer, you can send money from your offshore account to your domestic bank, so obtaining your funds isn’t an issue. You still enjoy the privacy offered by an offshore bank account while taking advantage of the domestic bank’s convenience.
When performing your research on offshore bank accounts, take local taxes into consideration. Most offshore banks that we utilize do not impose local taxes on foreign accounts, while others do. For example, if you hold an account in Switzerland in US dollars there are no taxes in Switzerland. If someone hold and account in Swiss Franc, the account holder pays Swiss taxes on those profits. So, that could mean you end up paying taxes not only to your own country, but to the country in which you are banking. Typically, you get do deduct foreign taxes off of your domestic tax bill, so the effects are usually neutral.