Documents Required Before and After Offshore Bank Accounts Opening

Why and which documents are usually required by banks before and after offshore bank accounts opening? The answer takes us back to the Know Your Customer standards and Compliance parameters set for banks by national and international bodies. We have mentioned them many times in our articles explaining the importance of submitting your personal and corporate information requested by bankers. However, too often applicants omit some meaningful data, ignore details, fail to meet the set formal parameters.  

Let us revisit our observations and see if the list of mandatory pre- and post-application documents asked by bankers is too long and difficult to deliver. 

The main tip is: just before you nibble at the foreign banks’ detailed inquiries, you should try to understand their justified concerns and recognize the real risks they would face in case of the revocation of a bank’s operating license. 

For example, some applicants for opening bank accounts with financial institutions in Panama may perceive the local banks as zealous bureaucrats asking too many questions. However, if you think long and hard about it you will never trust banks that do not ask you to provide detailed information about yourself and/or your business.  Most likely, such institutions are fraudulent and will not last long. So, you should better respect and appreciate the banks’ scrupulous compliance approach as a guarantee of the future safety of your deposits. 

Any reliable bank wants to be sure that you are a trustworthy person, have a decent business reputation and a legitimate source of wealth, and reside at the indicated address. 

It all comes down to your banker’s need to know only three things about you. 

• First, who exactly are you? 

It all starts with submitting your passport or its notarized and apostilled copy. 

There can hardly be any reason for credible international customers who are not scammers not to have valid passports.  

If you can visit an offshore bank or its branch in person, it will be easy to present your original passport to verify your identity. In some cases, reputable banks may agree to accept an ID card or even a driver’s license instead of a passport. Quite often, though, offshore banks that mainly specialize in opening bank accounts remotely may request more than just one identification document: a notarized copy of a passport plus a notarized copy of a driver’s license (or an ID card). This is a way to guarantee that the applicant for a bank account setup is not a scammer with a stolen document. Besides, to be on the safe side, many banks will prefer the application documents to be submitted via a trusted professional agent or international tax planning expert.

If you open a bank account abroad by sending your documents via a courier delivery or email correspondence, any licensed bank will usually request a certified copy of the identification document. Responsible banks prefer notarized copies. In some jurisdictions, offshore banks are required to accept only legalized copies of documents from non-residents. This means you need to get your passport copies notarized and apostilled. You should plan such chores in advance, as such legalization will take some time and money. 

Here is another tip for you: before you submit an extensive package of documents meeting all the rules and requirements, you can ask if the bank will consider first your passport copy certified only by a notary, lawyer, consul, embassy, or banking officer from any known international bank. Besides, it is good to know that if you are consulted by an offshore business expert or an agent of certain banks, such an adviser can also certify copies of your documents. But reliable consultants will never certify documents at a distance: an in-person meeting is required, and all papers need to be brought there in the original.  An offshore business consultant is responsible for his/her activities both to the international bank of which he is an agent and to the offshore jurisdiction that issued the bank license. Some professionals experienced in offshore company registration and account opening take risks and accept scanned copies from their clients via e-mail and certify them. We strongly recommend that you should be alert to such risky deals. You should trust real professional experts who always insist on the submission of the duly certified and apostilled copies of the applicant’s passport. 

• Second, the manager needs to know if the bank can trust you.

A reputable bank approves only applications from persons they can trust. The best proof of your trustworthiness is a testimonial letter from your current bank. If you have not had an offshore bank account before, you will have to ask for a reference from a bank in your home country. 

Try to get a letter addressed to any organization/person concerned, not stating that it is intended for a particular bank in a particular offshore jurisdiction. Instead, you may say that you need this letter for your application for a second citizenship. (Such a letter of recommendation from a banker is a standard requirement for any licensed program leading to a second passport and citizenship.) Many banks may ask you to write the text for your recommendation and submit it to be signed and sealed. In such cases, you are welcome to use the assistance of our consultants and request sample letters of recommendation/testimonials from lawyers and banks directly from us. 

A testimonial letter from a banker that will satisfy the legal department of any international bank will include the following text: “Mr. or Mrs. (last name) has been a customer of our bank for five years and during this time his/her bank account with our bank has always had a positive balance and we have had no problems in dealing with this customer for the past five years.” That’s quite enough. Some banks qualify their reference letters as bank certificates. Some clients confess that they do not dare to ask their bank for a testimonial letter or are confident their request will be rejected. You should be more relaxed about this. In fact, no bank will ever refuse to issue a letter of reference to its customers. Moreover, the issuance of such documents is a standard service, and some even charge some fees for rendering it. To issue a bank reference,  your bank will check its records and a blacklist compiled by your jurisdiction.

The task of obtaining a bank reference can be quite challenging in the United Kingdom. However, if you phrase and file your request in the right way you will get it all right. In the UK, according to the rules adopted by the British Bankers Association, letters of recommendation from a bank should be requested by mail in writing. Emailed applications are rejected. The request needs to be filed in hard copy.  Banks in the U.S., Canada, Australia, and Europe issue letters of recommendation nearly instantly, on your first request.

In any case, it is always important to know in advance whether such a letter needs to be addressed to a particular organization or whether it may be issued to whoever it may concern.

Some banks accept testimonials from lawyers and accountants. This option will be suitable for customers whose bank issues letters of recommendation only in case they are addressed to particular entities. This is important to keep in mind if you avoid sharing your intentions to open an offshore account.

If you have some doubts or concerns, your professional offshore business advisor will give you advice and offer help.

For example, there is a bank in Switzerland that finds video conferencing with an applicant a good substitution for letters of recommendation from bankers/professionals. For more details, you are welcome to book a free private consultation with our expert and/or look up relevant articles on our portal. 

• The third question is if your assets are legal

Perhaps the most critical information your offshore bank needs to know about you is the proof of the legal origin of your funds. The banker has to be sure that you are not laundering other people’s money and that you are not going to receive illegally obtained funds into your account. The usual documents that explain the legal origin of funds are: a contract of purchase and sale of some real estate, an inheritance record, a documented share in the family fund, or proof of your profit/capital arising from your ownership/share in a company. You can also provide a contract that specifies that you are an employee of a particular company and receive a certain income in your account.

Of course, the documents you submit need to correlate with the amounts you have forwarded to your new offshore bank account. If your documents show you earn USD 5,000 a month, your account balance of USD 20,000 will raise no questions from the bank. But if you suddenly deposit a million dollars in your account, the bank will ask you questions. Therefore, if you are going to get a million dollars transferred into your account, you need to inform the bank in advance that such an amount may come into your account. If you provide justifications of the legal source of this sum (for example, documents about the sale of your business for a million dollars in cash), most banks will welcome your deal.

And of course, if you open a corporate bank account, the offshore bank will want to see your corporate documents and confirmation that your company is in operation. Our experts always see to it that their clients get duly certified copies of corporate documents. 

It is also important to submit to the bank a formal POA authorizing a particular person / offshore company representative to act as a signatory on behalf of your company. 

To sum up, there are 3 main questions any offshore bank needs to clarify about you.

We also recommend other publications on our portal discussing some key aspects in more detail. For example, the following articles are worth your attention:

Bank Account Set-Up for an Offshore Company: Fail-Safe Option

Offshore Bank Compliance: General Requirements and Recommendations

Offshore banks are interested in you opening an account with them, no matter what you might feel when asked to submit a list of documents and additional information. 

If it happens to be hardly possible to provide a particular document we advise you to tell this to the banker and explain why. In most cases, your manager will offer a reasonable solution that will suit you. Otherwise, you will have to look for another bank or seek help from an offshore business consultant.

By and large, it is not too difficult to compile a package of documents when applying for opening an offshore bank account. If you know and observe the requirements, you have every chance to successfully open your foreign bank account.