Citizens of most countries are free to set up accounts with foreign banks. We are not going to claim that everyone needs a foreign bank account. If you do not have any business partners in foreign countries and you go abroad only for a short time on holidays, you hardly need a foreign bank account. If you are in a different situation, chances are that you could benefit greatly from opening a bank account in a foreign country.
Who needs a foreign bank account and why
If you do business with a foreign country, you have to have a bank account there. If you don’t, making money transfers to that country and receiving money from there is going to be problematic or expensive.
This is a situation when you must have a foreign bank account. You may benefit from a foreign bank account in other ways too, however. In some countries, banks pay high interests on deposits made in their national currencies. This might be a way of increasing your wealth. Besides, banking privacy is a top priority for many foreign banks and this could also be a reason to set up a bank account in a foreign country. An account with a reliable bank is an efficient asset protection mechanism. Please consult the Offshore Pro Group experts on opening a foreign bank account. The consultation is free of charge.
Opening a foreign bank account: a step-by-step guide
We must admit that setting up a bank account in a foreign country has become more challenging over recent years. You could try to do it without anybody’s help but there are so many pitfalls on the way that the chance of failure is considerable in this case. The guide below is intended to give you a general understanding of the process of opening a foreign bank account. You have to involve a professional to clarify numerous details.
Important note:
Citizens of many countries have to report opening foreign bank accounts to their authorities. Please do not count on setting up a secret bank account outside your home country.
Step 1. Choose the country
The choice of country will depend on your purposes. True, Western European banks are prestigious but many of them are reluctant to provide services to non-residents. They do not usually refuse to do it pointblank but they make the process of establishing a bank account difficult. You’d have to collect a large set of application documents, have them translated, have the translations notarized, and so on. Besides, the banks in Western Europe charge rather high services fees and commissions.
We suggest that you should consider banking in Eastern Europe in countries such as Serbia or Estonia, for example. Please note that it is only a suggestion and opening a bank account in Germany, France, the Netherlands, etc. is not impossible at all.
Banks in Singapore and Hong Kong welcome foreign clients who intend to do business in Southeast Asia. On the other hand, they don’t like accepting deposits unless they are really substantial. An account with a Swiss bank will suit somebody who wants to preserve his/ her capital rather than participate in international trade operations. You have to realize that many banks in Switzerland (even though not all of them) require large security deposits.
Offshore banks offer favorable service conditions but many of them have not overcome the reputation issue thus far. In any case, you have to make certain that the political and economic situation is stable in the country that you are considering for opening a bank account.
Step 2. Register or purchase a foreign company
It’s much safer to keep your money in a corporate bank account. People often register offshore companies with no intention to use them for business purposes. All they want the companies to do is to hold their assets and their money in corporate accounts.
Buying an offshore company is a widespread practice too. Admittedly, the company registration process involves quite a lot of red tape and what is even more important in some cases is the fact that it can take a considerable amount of time. Buying a shelf company, on the contrary, can be done almost instantly, within 1 or 2 days. Needless to say, you have to find a reliable intermediary who can help you buy a company without any debts or bad history behind it.
Step 3. Choose the bank
When you have decided on the country where you want to open a foreign bank account, you have to choose the bank in that country. You should take several important characteristics into consideration including the following ones:
- The bank’s capitalization;
- Its reputation;
- The commissions and service fees that the bank charges;
- The interests that it pays on deposits;
- The bank’s credit policies;
- Availability of English-language client support;
- Availability of English-language online and mobile banking applications.
We have to note, however, that you might find yourself in a situation when your choice of banks will be rather small. Some banks in the country of your choice could refuse to take a foreigner onboard, which will lessen your choice. Other banks might put forward certain requirements that are impossible for you to meet and this fact would lessen your choice of banks again. Unfortunately, we have to admit that banks choose clients today, not vice versa.
Step 4. Apply for bank account opening
You have to be prepared to supply a large package of application documents when opening a corporate account in a foreign bank. Today, banks request a much larger number of documents than they used to do before. For example, the bank manager will want to know everything not only about you and your company but also about all the company directors and business partners. The list of application documents includes, but is not limited to, the following documents:
- A completed and signed application form.
- A notarized copy of your passport.
- The original or a copy of a utility bill or a bank statement to serve as proof of your residential address.
- The original or a copy of a Letter of Recommendation from a bank that already provides services to you.
- Your résumé. The document has to demonstrate your educational background, work experience, qualifications, and your current position in the company.
- A complete apostilled package of corporate documents including:
- Registration Certificate;
- Registers of directors and shareholders;
- Share Certificates;
- A copy if the Declaration of Trust from nominee shareholders;
- Personal information about company UBOs;
- Certificate of Good Standing (if the company has been in existence for 12 months or more).
The bank manager may also request some additional documents.
In most cases, your personal presence is required when you are opening a corporate account with a foreign bank. Personal bank accounts can be opened remotely but not corporate ones. As far as the account opening timeframes are concerned, they can be different depending on the particular country and the particular bank. In some cases, setting up a foreign bank account can take 1 or 2 days, while in some other cases, it can take 1 or 2 months.