Owners of offshore companies are increasingly faced with compliance issues when applying for bank accounts. International Wealth experts are ready to assess your options and recommend foreign banks that cooperate with offshore companies. This article shares insights into options and solutions that work well.
Why are many banks reluctant to open accounts for any offshore company?
Despite all the obvious advantages of incorporation in offshore jurisdictions (tax incentives, data protection, etc.), many offshore companies face difficulties when applying for bank accounts. In some places, especially in Europe and Asia, it is almost impossible to open an offshore entity’s bank account without professional support.
Why? Simply because the banks’ concerns and requirements are often not considered by the applicants.
Financial institutions rightly cherish their licenses and correspondent accounts. Unfortunately, many of them associate international clients with potential trouble and risks. Banks just have to be cautious, because services rendered to high-risk customers may lead to financial and even criminal sanctions against financial institutions. So, be\y default, they prefer not to get involved with international companies at all.
However, if you do respect their stance and consider it in your application, your chances for success are better than you might expect! Our experts can discuss this with you during a free consultation.
Whom do banks consider to be high-risk clients?
Company owners (and especially from outside the USA, EU etc) can be impatient and intolerant when foreign banks conduct thorough KYC checks of new clients’ documents and don’ t appear to be in any hurry to open accounts.
The compliance people naturally look at due diligence and compliance standards before approving the application and regularly monitor the company’s business in the course of cooperation. Such measures are part of the binding national and international policies and procedures promoted by the FATF, IMF, World Bank, and FSRBs on combating money laundering, tax evasion, terrorist financing.
The above-mentioned international standards and guidelines, it must be said, do help reduce the incidence of fraud and other financial crime. They apply to a financial institution’s individual and corporate customers alike.
The Basel Committee, for example, defines a customer as:
- A person or entity who maintains an account with a financial institution or on whose behalf an account is maintained (i.e., beneficial owners);
- Beneficiaries of transactions conducted by professional intermediaries(e.g., agents, accountants, lawyers); and
- A person or entity connected with a financial transaction who can pose a significant risk to the bank.
So – whom do banks consider high-risk clients and would prefer to avoid or conduct a more thorough check? And how can you avoid falling into this group?
- Individuals who are reluctant to provide information or who create excessively complex ownership structures involving nominee shareholders, or issue bearer shares. Such policies pose an increased risk of money laundering and terrorist financing.
!!! Note: complex structures mean more money for incorporation agents. People often come to us with absolutely crazy structures that have been recommended by people online, only to find that they cannot open bank accounts!
- Individuals who mostly pay in cash. This conduct may indicate illegal activity (for example, in real estate transactions where payments are made in cash and the source of the money is unclear).
- Individuals who are engaged in arms trade, financial services organizations, gambling or cigarette trade.
- Individuals who do business with politically exposed persons (PEPs). These people often have significant net worth and can influence government contracts or public decisions.
- Individuals who demonstrate odd behavior. For example, their activities or spending levels are inconsistent with their lifestyle.
- Individuals who conduct transactions that do not make commercial sense.
- Individuals who have a criminal record or are somehow connected with terrorist organizations.
High-risk products or services
- A big volume of electronic payments such as the automated clearing house (ACH), bank or money orders, excessive use of prepaid cards.
- A large number of simultaneous transactions.
- Investment business, trust, and corporate services, accounting services, bankruptcy services.
- Transactions involving the sale of very expensive cars, boats, airplanes, houses, office space, and other real estate transactions. There is a risk that this is a way to launder dirty money.
- Use of high-risk delivery channels
- Virtual financial services provided to customers. These include remote payment services, as well as currency exchange and real estate transactions in the absence of the customer.
High-risk geographic areas
- Countries on the FATF black and grey lists.
- Offshore jurisdictions.
- Countries with high levels of corruption.
- Developing countries looking for hard currency investments.
- Areas known for a large amount of illicit drug trafficking.
Banks often push offshore clients by default into the potentially high-risk category. To foresee what difficulties may arise during your application for opening an account for offshore companies, please follow our articles. Our experts explain the risks and share valuable life hacks.
Life hacks on bank account set-up for non-resident offshore companies
Owners of offshore companies know how difficult it is to open an account, especially with a reliable bank. Although this is changing, offshore companies, more often than not, do not have real physical substance in the jurisdiction where they are incorporated. Our experts are ready to offer you several effective solutions, such as placing local employees on payroll.
Where are offshore companies’ bank account applications more than welcome?
Thanks to our extensive and successful experience with banks and payment services, we know exactly at any given time which banks have remained loyal to offshore companies. These are reliable offshore, midshore, and onshore banks. Having received your detailed request for our services, our experts can recommend a specific bank and customized tips for your application.
CAYE INTERNATIONAL BANK LIMITED, an offshore bank, is proud of its long successful history of cooperation with international business. It is a reliable highly liquid bank with top-quality English-speaking staff. The CEO lives here in Panama so we can call him and meet any time we wish. It offers a full range of competitive banking and investment services, including payment cards, on-demand accounts, other investment services.
According to its status as an offshore bank, CAPITAL SECURITY BANK LIMITED is subject to the laws of the local jurisdiction and ensures the privacy of its clients. It is a reliable bank, and its deposits are secured by an insurance policy. It specializes in the provision of traditional payment and investment services. The bank provides access to exchange platforms, allows trading in precious metals. It opens accounts in 25+ currencies and renders capital management services.
Commonwealth of Dominica
Let us recommend you to an internationally-focused bank in the Commonwealth of Dominica. It opens accounts for non-resident clients, including offshore companies. It offers digital banking, including online services. Here you can obtain prepaid debit cards, order asset management services, and select from many other advanced solutions.
We recommend offshore companies an excellent option of setting up an account in the payment system of Hong Kong. The financial company we recommend opens virtual IBAN accounts in Europe and UK for clients, provides international SWIFT transfers, and guarantees confidentiality and security of payment transactions based on Hong Kong banking laws. Clients are allowed to manage accounts online, receive MasterCard payment cards, and work with PayPal, Amazon, Stripe etc.
Offshore companies are welcome to open a multi-currency account with an IBAN in a payment system in Kazakhstan. Its distinctive feature is a range of versatile functions, including integration with a major cryptocurrency exchange platform. Clients (including forex, crypto, gambling) can conduct international payment transactions, or order investment services.
The bank in North Macedonia recommended by us is one of the few financial institutions in Europe that offer to open old-fashioned accounts for offshore companies. To become a client of this bank, you need to pay an up-front onboarding fee, then a video verification, and of course to make a respectable minimum deposit. The bank processes international payments and opens access to virtual trading floors for transactions with securities, crypto and other assets.
The special status of the jurisdiction as a candidate for the European Union member is of particular interest for financial institutions located in the country. As the country will soon join the EU, local banks have long since switched to international standards. Nevertheless, offshore companies can still open accounts here. Our experts have some excellent lifehacks (for example, on how to meet the substance requirements). One of them is to register a branch in Serbia and to open a bank account in its name there.
St. Kitts and Nevis
We recommend the premier offshore bank in St.Kitts and Nevis and indeed the region – offering a full range of comprehensive services including high speed wire transfers. It can open accounts for offshore companies remotely. The initial deposit and minimum balance requirements for medium and large businesses are quite conventional. It is possible to be issued prepaid Visa cards.
You can register both an offshore LLC and an account in Nevis following our experts’ advice.
We recommend BOSLIL BANK LIMITED – the leading international bank working in full compliance with the requirements of FATCA and CRS. Non-resident companies can open multi-currency accounts in 15+ currencies, issue bank cards, and of course make round-the-clock international SWIFT payments.
You are invited to specify your objectives and book a free consultation or our fee-based professional services. Please CLICK on the picture below to proceed to the fillable request form.
Procedure for an offshore company’s bank account set-up
All reliable and trustworthy offshore banks have similar requirements for clients applying to open corporate and other business accounts.
To approve your application, the bank of course needs to analyze whatever information you provide about your business and owners, and to carry out verification of your documents. Quite often banks ask applicants to make an initial deposit to be sure they are not tire kickers.
It is very important to submit all the documents required by the bank and fill out the application forms very carefully. This paperwork is very important, as it will influence the speed of processing your application (i.e. the timeline for opening your account), and your big picture chances to obtain the bank/payment system’s approval.
To be sure that your business, and especially your offshore company, will be able to open a bank account, you can ask our experts to conduct a pre-approval check without any obligation.
Our experts will guide you through the paperwork, verify that the bank’s requirements are observed (for notarization, validity dates, signature, etc.), and thus help you upgrade your chances for success. Our staff include former bank compliance officers who have extensive international experience.
Stages of opening an account for an offshore company
Send us your request for a free consultation. You can do this by sending a message to our e-mail address given at the top of the page or using our contact form. Please write “Bank Account Pre-Approval” in the subject line for a faster response.
Fill out the form for the account matching service. Just click the icon given above in this article and fill out the fillable online form. Our professional experts will study your case and select for you several banks in which your chances of bank account set-up can be high because of the mutual compatibility. They will also focus your attention on the bank’s particular requirements and possible solutions. If you follow our experts’ recommendations and then order the Pre-Approval service your chances will be secured.
Order the bank account set-up service. Once you’ve decided (together with our expert) which of the recommended banks suits you best, you are welcome to order our experts’ assistance in your account opening. This is a fee-based package service.
What are the basic requirements for an offshore company’s bank account set-up?
The procedure for opening a bank account for offshore companies is similar to the one you follow in any other country when opening an account with a bank.
In addition to corporate documents and information about your business, banks require personal information about the owners of the companies. This includes the name, date of birth, address, nationality, occupation of the UBO and those responsible for opening and managing the accounts.
Regardless of what type of documents you provide, banks will need to verify their validity. In some cases, a notarized copy of some documents may be necessary. But other banks and financial centers these days work with video calls or other foolproof online ID verification procedures.
How do I open an offshore bank account and gain access to it?
Quite often, banks impose additional requirements on applicants wishing to open a bank account for an offshore company. This is their right and measure to prevent money laundering, tax fraud or to discourage other risky activities often associated with offshore banking, such as gambling, forex and adult websites.
Banks typically request from your current bank some specific financial documents: a reference indicating the average balance and a statement about you as a regular client, plus the bank statements for the recent 6-12 months.
Also, many banks ask you to describe in written the type of transactions you are going to conduct on your account. As part of our service, we can help you to write and translate such documents to English based on information you provide to us.
Is it difficult to open a bank account for an offshore company?
Despite “anti offshore” media reports that are politically motivated, this is at ther end of the day pure politics. For those of you like us who do not want to get involved in politics, opportunities still exist as always to open offshore bank accounts. Certain difficulties in this industry do of course exist: the “Panama Papers” for example. However, we offer you the expertise and services of our highly reputed and professional experts with their long successful experience and reliable contacts all over the world. You can rely on their sound judgments, support, and effective solutions.
By taking advantage of our services and step-by-step recommendations, you are guaranteed to be able to open an account for your offshore company in a bank that we recommend to you.
All you need to do is to thoroughly fill out the application and attach the required documents compiled according to the clear criteria, including the IDs, transcripts, and add some extra on-demand information – to convince the bank of your good intentions to use the account for legal purposes. And remember we are here to help you at every step!