Before you open an offshore bank account, you need to familiarize yourself with the secrets to offshore banking and get rid of any misconceptions.
And if you’re like most people, you probably have a lot of negative misconceptions thanks to the media and Hollywood.
In this article, we’re going to give you a crash course on offshore banking by unveiling the secrets and helping you uncover the benefits that used to be reserved for the ultra-wealthy.
The first step is recognizing that offshore banking isn’t a shady industry of obfuscation, but instead an important tool to protect your assets and grow your wealth. And today, it’s a tool that anyone at any income level can access and benefit from.
Previously, offshore banking was only available if you had the right “connections” and a hefty initial deposit. You also needed a personal introduction just to get your foot in the door.
Thanks to the internet, and to services like GlobalBanks, it doesn’t matter if you have $1,000 or $10,000,000 – the benefits of offshore banking are available to you.
So know this, offshore banking is NOT illegal. What is illegal is hiding money and not reporting it properly. Unfortunately, many people get this confused.
The important thing to remember is that: anyone can bank offshore legally, you just have to make sure that you fulfill your legal reporting requirements.
With this in mind, anyone who is willing to do a bit of research, uncover the power of growing and diversifying their assets, should seriously consider offshore banking as a viable option for protecting and growing their wealth.
While most people immediately think of palm trees, sandy beaches, and crystal Caribbean islands when they hear the term “offshore banking” – that’s not entirely true. Offshore banking actually refers to banking anywhere outside of your home country or country of residence.
For example, a Canadian who has a bank account in the United State is “banking offshore” if they don’t live in the United States and don’t hold United States residency.
So why open an account? Maybe they like the outlook of the USD vs CAD. Alternatively, they might want to keep USD in an account to pay for vacations and save on foreign exchange rates internationally.
Similarly, an American is engaged in “offshore banking” if they have a bank account in Germany. And likewise, a German would have an “offshore banking” if they have one in the United States.
When you think about offshore banking like this, you start to realize that offshore banking isn’t a mysterious, complex thing that only rich people use. Instead, it becomes a tool that has benefits for regular, everyday people too.
There are thousands of lawyers and service providers around the world that will try to sell you “bank introduction services.” The idea is that you pay them a fee (often $500-$2000) to be introduced to a banker at one offshore bank. Then, you hope that you can get an account open.
This industry has existed for decades.
Before the internet and banking regulations evolved, this service actually did have a place in the world. But today, it’s not needed. In fact, we view it as a out-dated service that’s just a hangover from the 1980s offshore banking days. Today, it’s just a fake service that firms use to fluff their profit margins.
It still exists because a) there is rampant misinformation on the internet, b) no one has called BS on it, and c) newbies don’t know any better.
It’s also worth noting that there are only a few jurisdictions in the world that have a requirement that clients be “introduced.” But even then, these aren’t hard and fast requirements and there are ways to get around them.
In other words, opening an account at pretty much any country and at any bank depends entirely on YOU and your profile. It’s also something that you can do entirely by yourself – if you have the right contacts, strategies, information, and know which banks to approach.
There are a lot of reasons why you might want to setup an international company, either for yourself personally or for your business. In any case, the corporate structure that you choose is going to need to open a bank account in order to be useful.
Here’s one major problem that we see far too often…
An individual goes to a service provider, asks them for help setting up the structure, and they end up with a corporate structure (company, trust, foundation, etc) that they can’t even use. Why? They can’t open a bank account for it anywhere.
This often happens in popular jurisdictions for international businesses, such as Cayman Islands, BVI, Seychelles, Belize, Cook Islands, Panama, Nevis, and many more.
Before rushing out to set up a company, make sure that you’ll actually be able to open a bank account for that structure. Has the service provider successfully opened accounts for that structure before? If so where? And, when were these accounts supposedly opened?
Already have a company and still need an account? Join GlobalBanks Insider and you’ll get everything you need to do it yourself.
Most people dream of opening low-cost offshore accounts that have ultra-low minimum deposit requirements (e.g. deposit $1,500 to avoid monthly fees).
But, beware of their fee structure. It’s likely that the bank may lack basic infrastructure (like online banking) or will charge you for services that are normally included…and you’ll end up paying more in ad hoc fees.
For example, you’ll get slapped with fees for monthly balance statements, referral letters, inactivity fees, closing your account, inflated FX rates, abnormally high transfer fees, etc.
If you get a cheap bank account, expect cheap service, cheap technology, and cheap customer support.
While you might save some money upfront by getting an account with super-low minimums, be careful. Examine their fee structure like a hawk. After the first year, you may find that you’re paying out far more than you otherwise would at better banks elsewhere.
This might seem like a no brainer. But this statement goes deeper than the surface level considerations of the banks balance sheet, their solvency ratio, the amount of deposits kept in reserves, etc. Those are all important considerations, but you also need to understand the bank’s business model and the way that they motivate their staff.
For example, banks in the United States are motivated to use and lend as much credit as possible. This has led to the rapid expansion of the US economy, but it has also created a lot of risky banks with awful balance sheets.
So when it comes to banking, you want to make sure that you your money is deposited with a healthy bank that won’t gamble your savings on toxic investments or high-risk lending. You want a safe, conservative bank, that is going to respect your money the same way that you would if you were managing it yourself.
So far, we’ve talked about the misconceptions and falsehoods that are broadly shared about offshore banking. But why do these myths exist?
As we’ve said, offshore banking is a 100% legal. It’s also an easy way to protect yourself from various risks and grow your money.
For this reason, looking to open an offshore bank account is no different than considering an insurance policy or a retirement plan.
More often than not, the stories that get shared in the media expose politicians, famous athletes, or movie stars using offshore companies to hide their wealth from the tax collector. It makes for a good sensationalist headline and appeals to the public. It’s easy to throw stones at wealthy and successful people.
But if so many smart, rich, successful people are using legal means to increase their investment returns and protect themselves from frivolous lawsuits, is it really that bad? We don’t think so.
Thanks to anything “offshore” being vilified, we now live in a society where the majority of people are painfully misinformed about the benefits of offshore banking. Millions have been programmed to overlook and be scared of one of the most highly-effective financial and wealth building tools of our time – that when used properly can create financial security for generations.
Keep reading to learn more about common account opening misconceptions, the benefits of offshore banking, and what you can (and cannot) do with an offshore bank account!
Most people that come to GlobalBanks want one thing: help opening offshore bank accounts and navigating the offshore banking world. If you’re one of those people, this section is for you.
Below, we’ll explore little-known secrets about account opening that bankers, lawyers, and service providers will NEVER tell you.
When it comes to account opening, most people get frustrated in the initial account opening phase – the insane amount of documents required, odd authentication procedures, requests for documents that don’t even exist (or that you can’t get without a significant amount of effort).
What most people don’t realize is that their approach to account opening is wrong. And they are the actual cause of a lot of the delays and problems with the account opening process, not the bank.
Here’s what we mean: you can look at each step in the account opening process as one phase in a multi-phased interview. From the first email through to finally receiving your account number and making your initial deposit (and even after).
In order to make sure that you’re successful in each of those phases, you need to be prepared. And it’s a lack of preparation that often causes delays and problems. If instead, you approach the situation with the seriousness that it requires, and ensure that you are presenting yourself as an attractive client for the bank, these problems will start to disappear. If you don’t, chances are you’re going to find yourself without an account and starting back at the beginning of the process.
Quick reminder: banks are businesses and you are the customer. Most people fail to realize this and don’t bother to ask.
This is a delicate process of give and take. And, as long as you have presented yourself as an attractive client and can meet the bank’s desired minimums, the bank will most likely be willing to negotiate with you. This can include anything from your initial deposit amount, the annual maintenance fees, and commissions on investment products, to transfer charges, and even your credit card fees.
Almost anything the bank charges a fee for is up for negotiation. You just need to know how to approach it, position yourself, ask the right questions, and know what type of allowances are likely to made based on your client profile.
Of course, if you overestimate your importance and misread the signals, the banking relationship can turn sour, so you have to be careful.
The account opening process is like an intense, multi-phase interview. From your first email and call to your in-person interview, you are being analyzed.
In offshore banking, first impressions count (a lot) and can ultimately be the reason you are rejected from a bank. So, be sure to make a positive impression on the bank.
If you go in looking like a poor backpacker, who hasn’t showered in 3 days, and you have no ties to the country – bankers aren’t going to take you seriously.
But, first impressions aren’t limited to face-to-face interviews. And this is where a lot of people fail. That can include email, a phone call, or an in person meeting.
Another dirty secret? Snap judgements, racial (and nationality) profiling, unflattering search results on Google – are totally acceptable reasons to reject you. Of course, if you’re serious about account opening, check out GlobalBanks Insider where we have entire reports dedicated to this topic.
Bottomline, whenever you have an interaction with a bank, be smart. Ideally, you want to educate yourself first, depending on what the bank and that bankers are looking for in a client, so that you can best position yourself to meet their expectations.
It’s the era of the internet. And, your online footprint matters. So, make sure that your online persona reflects is a true and accurate representation of yourself.
For instance, if you are presenting yourself as a peanut farmer your online presence shouldn’t depict an ecommerce retailer, and vice versa. As always, honesty is the best policy, so make sure that your online profile is accurate and easy to understand.
If you’ve had the misfortune of unflattering news coverage or have had your reputation tarnished, it might be worth investing in someone to push down (or bury) any negative or embarrassing content to at least the third or fourth page of Google.
The holy grail of offshore banking is being able to open an account remotely.
Thanks to increasing international regulations, remote opening is becoming harder and harder.
Now that banks have had a few years to get used to these new regulations, some are willing to open accounts remotely again.
It’s tricky, there are quirks, and it can sometimes be expensive if you don’t know what you are doing.
Many banks don’t promote remote opening as an offering anymore because they don’t want to attract regulatory scrutiny. Other banks will allow it but only if you meet certain criteria and requirements first.
That said, remote opening is still possible – if you know where to look.
We discuss specific strategies, countries and banks that are best for remote-opening in the reports that are available to our GlobalBanks Insider as part of their subscription.
Not having the “right” citizenship or residency can mean a long, painful account opening process or total failure.
Whether you are trying to open an account in-person or remotely, your residency and your citizenship matter to the bank…a lot. It’s often the first thing they look at.
You see, the dirty secret for citizenship and residency is this: it matters for the “Common Reporting Standards” which basically means it’s how governments get information on their citizens abroad.
If you don’t provide sufficient evidence of tax residency, the bank has to report you to your home country and the place that you say you have residence. And they don’t have to tell you either.
They need this information for other obvious reasons too, like making sure you’re not on a watch list and proving you are who you say you are. But this inter-government information sharing is often missed or overlooked by people looking to open offshore accounts.
Your answer this question can make or break your account application.
Sure, it sounds nice and innocent on the surface. But remember, this is an interview. And every question that you’re asked is laced with compliance related meanings to screen whether or not you’re a good fit for the bank.
Your answer to this question will tell your banker right away if you might be a high-risk client and might be have behavioral tendencies of a money launderer.
In GlobalBanks Insider, we go through a number of different ways that you can answer this question and how you should best position yourself – not by lying, but by always presenting your strengths and how you can benefit the bank as a client.
This might come as a surprise. But in many countries and at many banks around the world, your banker is actually paid to open your account.
Yes, the same person that is delivering the bank’s intense compliance interrogation actually wants you to open an account. Heck, they get paid for it!
And this isn’t just an offshore banking phenomenon, in fact, sitting down with bankers in the midwest of the United States you will hear the same thing.
At some banks, bankers have to open a certain number of accounts each month in order to hit their quotas.
So at the end of the day, while you are going through that multiphase account opening interview, keep in mind that the person sitting across the table usually wants to help you open an account.
With this in mind: help them, help you. Prepare. Present yourself in the best light possible. Don’t accidentally red-flag yourself. And, always tell the truth.
Account closures and freezes are skyrocketing. Banks can shut down your account for a minor technicality. What’s worse is that they won’t even tell you why.
It’s true. Many people feel a massive amount of relief once they are able to get offshore accounts opened for either themselves or their businesses.
But the reality is that, if you’re not careful, your new account can be closed a lot faster than it was opened…and you might not even know why.
That’s a dangerous prospect for anyone reliant their offshore account for regular business activities and making regular payments.
Whether you live in the United States, a European capital, or somewhere in Asia, the world is becoming increasingly litigious.
After all The highest rates of lawsuits in the world are in the US, Canada, UK, Australia and New Zealand.
Even if you’ve done nothing wrong, you and your business are still vulnerable to frivolous lawsuits where you live, in a country where you do business, and beyond.
How can you protect yourself? By starting to take steps to insulate yourself and your funds from frivolous lawsuits. And one way that you can do this is by structuring your assets offshore and using offshore bank accounts.
At GlobalBanks we talk a lot about the strategies that are available to help Insiders protect their money and have greater financial security. And no matter how you look at it, that’s just smart.
By keeping a portion of your nest-egg in an offshore bank that is outside lawsuit-heavy jurisdictions, you can better protect yourself and minimize exposure to lawsuits. This is a simple strategy that has been used by some of the wealthiest families for generations, and they continue to use them today.
Banking offshore can give you access to higher returns on your money. This is true for even the most basic investments. An example of this is high earning fixed term deposits, also called certified deposits or CDs, on USD accounts in foreign countries.
And while people might think that foreign banks are riskier, many of the accounts that pay higher rates offshore are actually safer than accounts earning 1% or less interest in the US or Europe.
If you know where to look, who to contact, and how to negotiate with bankers – you can find very attractive rates on fixed term deposits with safe banks ranging from 5% to 7%.
And while you can get high interest rates in places like Mongolia and Zimbabwe, we don’t recommend either at the moment. Especially when you can get high interest rates in more established (and safer) banking hubs like Panama… if you know where to look.
So far, we’ve talked a lot about accessing banks and opening accounts in places that offer benefits either through rule of law or in the way that banks are actually managed.
But there are other benefits to banking outside of your home country as well. And one of the most important benefits is currency diversification.
By opening offshore bank accounts you will normally have your choice of holding your funds in several international currencies. Doing so will help you protect your money from major fluctuations or devaluations. This is especially true for people that earn and spend in countries that are less stable, such as South Africa, Mongolia, and other emerging or frontier nations.
How can you start saving money right now?
If you are a business owner, one step you can take to start saving immediately is to identify the countries where you transfer money on a regular basis. Then find a bank that offers favorable rates for frequent transfer.
By taking this approach you can benefit from holding money that you will pay suppliers or contractors in the local currency and get a reduced price on transfers.
The same can be true for personal accounts. If you spend a great deal of time in any particular country, opening an account there and keeping money locally can help you cut down on foreign exchange costs and transfer fees when you send money in and out.
If you are planning on opening a personal account, you might be surprised to find out that your offshore bank account can help you build international credit in the country where the account is located.
You can do this by using products from bank, including: credit cards, investment products, and more.
Doing so can help you lay the foundation for accessing domestic credit in that country, even if you are not a citizen of the country and even if you don’t maintain residency there.
In other words, as a tourist you can open a bank account, and in time, get a mortgage to buy a house. It will take time to go through the process, and you will have to establish good credit, but it is possible as long as you know what steps to take.
Something we talk about a lot at GlobalBanks is making sure that you and your money are protected, no matter what happens. And step one in doing that is thinking pragmatically about the world and the risks that exist.
With that in mind, it’s important to open accounts in countries that you feel safe, that you understand, and that you’re confident have the right legal, political, and social systems to support you and your money for the long haul.
Taking this kind of approach and not stopping when you simply have one account opened, is the minimum that you can do to protect your money from existential risks that do exist in the world today.
For these reasons, opening an offshore bank account and spreading your wealth across several countries can act as an insurance policy against any number of risks that could impact the economy, the currency, the bank, and as a result, your wealth.
Don’t miss the final 17 secrets, which you can get for free right now.
In the final 17 secrets, we share the banks that you should be opening with, the countries you should consider banking in, and exactly what you can (and CAN’T) do with your new offshore bank account.
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Unlock 37 secretsthat will save you money, time, and frustration so you can open accounts faster and smarter!
Unlock 37 secrets that will save you money, time, and frustration so you can open accounts faster and smarter!
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