Can an Offshore Bank Account be Opened Online? Yes, but…

One of the most reliable, perfectly legal and easy ways to protect capital is to open an account with a reliable offshore bank. That is why a popular question is: how can an offshore bank account be opened online? Enough with wishful thinking!  Whatever you might be told, remote account opening (RAO) can be quite painful and often not successful if you take it carelessly. 

Gone are the days when the privacy of global banking was a natural phenomenon. Though it is widely accepted today that banking offshore is not about hiding, the requirements set for non-resident applications for foreign accounts have grown stricter over recent years. Nowadays, the KYC (know your customer) and AML (anti-money laundering) regulations have made the global banking system more transparent and banks more alert to risks. Offshore banks are getting more hesitant to take non-resident clients and so many reputable banks tend to introduce more sophisticated compliance checks, charge higher fees for consideration of applications, and demand larger sums on the balance. 

That said, we do not mean that you cannot open offshore accounts online. But there are many things you should look into before you submit your papers to some chosen bank. It is important to analyze all the possible pitfalls in the application and client onboarding policy, estimate one’s goals and resources, prepare a plan, and follow it thoroughly, whether you apply in-person on-site, remotely via a representative, or online. That is why the assistance of seasoned experts is in demand today. 

It is obvious that technological advancements in banking have made it possible to open an account in an offshore bank online from the comfort of your laptop virtually anywhere in the world. However, the simplicity of online communication with the bank should not be your only criterion when choosing a financial institution. 

The main thing is to aim at developing reliable, profitable, predictable long-term cooperation with the bank. This needs to be planned right from the stage of your application. The benefits should be mutual. Your respect for the bank’s reputation should make you look deeper into the rules and procedures, see the bank’s concerns behind all the requirements, and be most responsive and proactive in submitting the needed information and documents.

It is not only you who seeks cooperation with a reputable bank. The bank is interested in making reliable clients onboard. Some banks choose to refuse foreign applicants. Unfortunately, today, there are too many reasons why a foreign bank may not wish to work with non-residents. Yet many banks do not mind non-resident holders of accounts if they can be convinced of the good prospects of long-term cooperation. It’s not that easy to win a foreign bank’s trust at a distance. That is why professional assistance is often a must.

How to get an offshore bank interested in cooperation?

As we’ve mentioned above, all banks are under increasing pressure from financial regulators and governments. Even fully private financial institutions are obliged to comply with international KYC, KYB, AML standards and follow relevant regulations and trends. Yes, even trends. So how do you go about this situation?

Way back when, there was a common belief that entities registered in respectable European onshore or midshore jurisdictions would be better clients and partners. For example, many entrepreneurs chose to register Scottish Limited Partnerships (SLPs) perceived by European banks as trustworthy customers while they did not have to pay taxes in the UK. But this scheme will very soon be a thing of the past, as the UK’s authorities have already expressed their dissatisfaction with the fact that their financial instrument has been used as a ploy in tax avoidance schemes. Of course, this attitude is a trigger for the European banks to retrieve from or limit cooperation with SLPs, especially when they do not have credible information about the trustworthiness of the beneficiary of the account. Thus registration of companies in onshore or midshore jurisdictions can not automatically guarantee smooth cooperation with the bank in the future.

No wonder that similar schools of thought in Europe have brought about intentions to tighten fiscal control mechanisms, build on barriers against tax evasion, money laundering and other crimes (often associated with certain countries). Each offshore bank may have its ‘grey list’ of countries whose nationals are not accepted for opening bank accounts.

There is, though, one proven solution to the above-mentioned problem of prejudice and fears on the part of all banks. The trust can be earned by means of a large deposit on the account, but the sum needs to be exceptionally big. If we narrow our discussion to the concerns of small and medium-sized companies and average entrepreneurs or common people, the solution would be in choosing the bank that will not require multimillion-dollar balances and yet agree to cooperate.

In other words, the best strategic option involves the proper selections of a foreign bank for future long-term cooperation before you start preparing a portfolio of documents according to its requirement.

The right bank for opening the right offshore account online

It is critically important to choose a strategically loyal financial institution that accepts remote applications. Though it is becoming more difficult to open an offshore account online in Europe, there is still such a possibility, for example, in Switzerland or Cyprus, Luxembourg and Monaco, but these opportunities are becoming less available and more challenging.

But if you look around, in addition to Europe there are a lot of regions where you can become a welcome client of an offshore bank, with the opening available online. As an option, it could be Singapour, in the Cook Islands, Vanuatu.

Someone may doubt the reputation of the jurisdiction since Vanuatu is far from Europe. But, Vanuatu has every chance for rapid development, as it offers not only good banks but even one of the most profitable licenses for FOREX.

May we recommend that you should never immediately write off a jurisdiction that is unknown to you. The fact is that now little-known offshore destinations have every chance to make a leap in their development if they offer what exactly the client needs: trouble-free opening of an account, smooth payment settlement, acceptable tariff policy.

Region-specific offshore bank accounts opened online 

Another difficulty of cooperation with foreign, even European, banks is the possibility of debugging payments and crediting funds into the account. More and more often clients face the need to open an online offshore account in a particular region. Thus for transactions in Asia you will need an account in Hong Kong or Singapore, in the EU – a European account, outside the EU – some other offshore accounts.

The reason for such region-specific solutions is rooted not only in the cost concerns but also in the time difference and the associated delays in transactions. In some countries, banks may charge you a higher fee for payments in US dollars and request relevant documents confirming the legal nature of the transaction. Without such reference to agreements between the payer and the beneficiary, the intermediary bank and the correspondent bank will hold the payment for compliance check (to make sure that the parties are not on the OFAC, Embargo, PEP, or similar lists, and the transaction or transfer is legal). As a result, the money transfer may take several days.

At some point, you will realize that to work in different regions, you need different offshore accounts. To discuss and understand what account to open and where, please refer to our Offshore Pro Group experts.

Why should you rely on professional help when opening an offshore account online?

The answer to this question is very simple – to REALLY become the happy holder of this account without unnecessary waste of time, efforts and money. Fewer banks are opening accounts remotely nowadays. Even such destinations as Panama that are popular with applicants wishing to open dollar accounts, often require them to visit the jurisdiction in person to submit the documents.

Of course, a Panama account is a widely recognized asset protection tool. When negotiating face-to-face with bankers you are likely to obtain more flexible terms of cooperation and a chance to personally assess the opportunities available in this jurisdiction and the bank itself. However, not everyone has the desire and time to visit Panama. That is why most clients are looking for alternative solutions. A sound alternative can be offered by our seasoned experts after a detailed discussion with you. Having understood your needs and concerns, our consultant can recommend the most suitable bank and help with the actual account opening.

Open an account with an offshore bank online and do not fear deoffshorization

Another painful topic is the process of deoffshorization, which is actively unfolding in the EU and beyond. A strategy of business restructuring, tax planning, and the decision to change the country of tax residency need to be carefully prepared with a professional expert to yield the expected benefits.

For example, some find it reasonable to obtain a second citizenship in one of the Caribbean countries and a tax residency in Andorra, Monaco, or Malta. There can be many alternatives based on economic citizenship programs and tax residency options in different jurisdictions. But they need to be explored and planned with consideration of many aspects.