We often hear the following questions from our clients:
- How can I open a personal bank account abroad?
- How should I go about setting up an offshore bank account?
- Can you help me open a personal bank account in a foreign country?
- Can I open a foreign bank account without a personal visit?
Quite a number of people are looking for an opportunity to bank in a foreign country be it a small island country in the middle of the ocean or an EU member state. This task is not so simple in the modern world and you have to handle it with care and take it step by step is order to achieve the set goal.
The stages of setting up a foreign bank account
Theoretically, you can set up a foreign bank account by yourself without leaving home. Many banks today have websites that you can use to apply for their services. However, non-resident banking has become especially challenging due to the international campaign against money laundering and terrorism financing.
For this reason, we advise that you should apply for professionals’ assistance in this matter. We have vast experience in helping clients set up foreign bank accounts and we will gladly provide these services to you too.
We suggest that you should start by acquiring a free consultation from us that comes in the form of a questionnaire that you will find below the text. We will use your answers to the questions to determine which foreign banks or payment systems are going to suit your purposes best of all. Thus, we will come up with several suggestions.
You will be able to discuss the details of every recommendation that we make with an expert of ours. You can use any means of communication that you prefer such as e-mail, telephone, Skype, Telegram, WhatsApp, or Viber.
After you have chosen two most appealing banks or payment systems, we will proceed to apply to them for a preapproval on your behalf. We highly recommend that you make use of our preapproval service as it can help you save valuable resources and it does not cost very much.
What does a preapproval mean? It is a provisional consent on the part of the bank to provide services to you. In order to grant preapproval the bank administration has to assess an ‘abridged’ profile of the prospective client, that is, you will not have to supply the complete application document package at this stage.
At the same time, obtaining the preapproval does not mean that the bank has given its ultimate consent to you: it has only agreed to consider your application for services seriously. There is no guarantee that you will have a foreign bank account but with our assistance, your chances for acquiring one are going to increase manifold.
We have used the word ‘one’ in the previous sentence because such is the requirement of the English grammar. The requirement of modern life, however, is that you have several bank accounts abroad. Any bank can freeze your account. Any bank can go bust. Any national legislation can change overnight. It is just too unsafe to have only one bank account these days. Asset diversification, remember?
When you have selected the bank and obtained its preapproval, you can start collecting the application documents required by this particular bank. Every bank will have its own set of requirements and thus every bank needs an individual approach.
There are alternatives to traditional banks, however. You can also set up an account with a payment system, which is going to work out much faster. At the same time, it is important to realize that any PSP (Payment Service Provider, as such systems are often referred to) will have its own Compliance Department and its own due diligence requirements.
It would be wrong to think that opening an account with a payment system is much simpler in terms of compliance than opening one with a bank. Every financial institution has its own internal rules and you have to follow them if you want to have an account established there, which makes careful document preparation very important.
Financial institutions of today seek total transparency. This is why you have to be prepared to supply truthful and well-documented information to the bank.
You have to prove to the bank that you are a trustworthy client. Long gone are the times when banks were glad to provide services to any person who knocks on the door. These days, banks are highly selective especially when it comes to servicing foreign clients.
What documents are required to open a personal bank account abroad?
1. First, you have to provide an identification document. It can be your foreign passport or ID card.
2. The second key document is a proof of your residential address. Different banks will accept different documents as proofs of addresses but most often, you have to submit a recent utility bill. Some banks will be satisfied with a statement from your home country bank but you have to make sure that the statement carries your residential address.
These two documents are obligatory with all banks and payment system while the ones listed below may be requested in some cases.
3. A bank statement for the last six months as a confirmation of the legality of your sources of income.
4. A letter of recommendation from a bank or from a professional such as a lawyer, an accountant, a notary public, etc.
5. A tax declaration. Most often, a tax declaration is required when you are setting up an investment account in a foreign bank.
6. A résumé that reflects your education and work experience.
What should you pay heed to when selecting the foreign bank to open a personal account with?
The first thing that you have to determine is what type of a foreign bank account you would like to set up. It can be a regular current account that you are going to transfer money to and use for your everyday purchases, payment of utility bills, payment of your children’s tuition fees, and so on and so forth.
If you have accumulated a larger amount of money, you may want to set up an investment account with a foreign bank. Choosing the bank where you can open an account of this type is a more challenging task and professional assistance is going to be especially valuable here. You are going to trust the management of your money to a foreign financial organization and you have to be certain that it is going to do a good job. There are thousands of banks in the world and only few efficient ones.
You can also set up a broker’s account with a foreign bank. If you are engaged with FOREX trade, a broker’s account abroad can be of great help to you. Far from every bank will by happy to open a non-resident broker’s account but there is an option to set up a current account first and then apply for a broker’s account to the same bank. This will increase your chances for success.
After you have decided what type (or what types) of foreign bank account you need, you have to come to terms with your own self on how much money you want to deposit into the account. Your choice of banks will largely depend on the amount of money that you would like to keep in a foreign bank. The transfer method can also be of importance, as many banks prefer that you transfer the initial deposit to the new account from a bank account that you already have.
Please make certain that you inform your consultant where you have an existing bank account as the country where the money is going to come from does matter in some cases. Many banks will have restrictions and they will be reluctant to accept transfers from certain jurisdictions.
In addition to that, the bank will want to know about the origin of your capital and you have to prepare the documents that confirm the legality of your sources of income. Since recently, many European banks require that the prospective client submit the tax declaration that documents the payment of taxes on the sum that the person is planning to put in the foreign bank.
There are banks and payment systems that do not require any initial deposits nor any security balances. However, these banks and payment systems may fail to suit you on other parameters such as their tariffs and service fees, their location, the availability of certain pay cards, and so on.
The next thing you have to choose is the currency in which you would like to open a foreign bank account. What should be the currency of your choice? It is up to you to decide but probably the best option would be to set up a bank account in the foreign currency that you use most often.
There are banks that make it possible to open multicurrency accounts so that you can make and receive transfers in a large quantity of various national currencies. There are those that offer a choice of only a few currencies and allow establishing only single-currency accounts. There are many options to choose from and you may want to open, for example, a euro account and a dollar account in the same bank or otherwise open a euro account in one bank and a dollar account in another one, and so on. With the view of the need for asset diversification, setting up accounts in several banks would probably be a better idea.
Finally, you have to find out everything about the bank tariffs and service fees. How large is the transfer commission? How much is the account maintenance fee? Are you going to owe anything to the bank if you decide to close your account there at some point in time? How much does the issuance of a plastic card cost? What is the commission on withdrawing cash from the ATM? How much can you withdraw in one go? What is the maximum amount of money that you can have on the card? How much can you put on it in one go? Are there monthly or yearly limits, and so on, and on, and on. You have to study these questions very carefully to avoid possible future disappointments when you have to pay more than you expected. We always draw our clients’ attention to bank tariffs, as these can be quite different depending on a number of factors such as the bank’s location, its size, the level of its greediness, etc. In any case, if you would like to establish long-term relationships with a foreign bank, you have to find the one whose tariff policy is acceptable for you.
When you have found (at least provisional) answers to the questions posed above, please go on to answering the ones that you can find below. Please also tell us about the best way to contact you and we will get back to you as soon as we have analyzed your answers. We are going to make several suggestions to you and you can choose the ones that look most attractive in your own view.