Anonymous bank accounts, numbered accounts, and secret bank accounts all refer to financial accounts where the identity of the ultimate beneficial owner is only available to a small circle of bank employees.
In this traditional sense, anonymous accounts are no longer available. Instead, anonymous corporations and asset protection structures like trusts and foundations are required to achieve anonymity.
Additional options for anonymity also exist, though in most countries they are considered illegal or, at the very least, they are questionable and should be avoided.
We explain what anonymous bank accounts are, why people want to open them, and the different types of accounts that exist today in this article.
We also explain where things get dodgy, what to watch out for, and how to unlock the same benefits of an anonymous bank account without crossing the line.
Feel free to use the table of contents to jump ahead to the sections most relevant to you.
Table of Contents
- Are Anonymous Accounts Real?
- What Is an Anonymous Bank Account?
- Why Do People Still Want Numbered Bank Accounts?
- Is It Possible to Access Anonymous Accounts Today?
- Are There Benefits of Having a Numbered Bank Account?
- Frequently Asked Banking Questions
- Do You Want to Open an Offshore Bank Account?
Are Anonymous Accounts Real?
Historically, anonymous accounts were widely used by the rich, powerful, and well-connected for a wide range of purposes. Dictators, arms dealers, intelligence agencies, and cheating spouses used them too.
Many people wanted privacy and others did it to avoid taxes. Some groups wanted an untraceable account to disguise nefarious activities. Others used anonymous accounts to hide money from ex-husbands and wives, disgruntled business partners, or creditors but the desire to be private and maintain anonymity doesn’t have to be criminal.
Many people used anonymous accounts throughout history to protect their nest eggs from corrupt governments, illegal seizures, or confiscation in their home countries.
Up until the 1990s numbered accounts in Switzerland were synonymous with anonymous accounts. Your name didn’t appear anywhere as the bank didn’t know who the ultimate beneficial owner (UBO) was.
People set up a company with bearer shares and had their international attorney open a corporate account for the company and in seconds you had an anonymous bank account that couldn’t tie back to you. This is no longer the case. Let’s consider what an anonymous bank account is today.
What Is an Anonymous Bank Account?
An anonymous bank account, also referred to as a “numbered account,” is a bank account where the identity of the account holder is replaced with a multi-digit number or code.
The name of the client is only accessible to the account holder and a small circle of senior staff at the bank. People often confuse anonymous accounts with standard offshore accounts, however, they are very different.
Traditionally, the account holder’s name and code number were written on an index card. The card was then placed in the bank’s safe, let’s say somewhere in Switzerland, and it would only be accessible to the banker and his boss.
Like any bank account, the money either sat there and did nothing or it grew through investments. It was entirely up to the account holder.
Here is where things get interesting, or dodgy, depending on who you are.
The account holder’s responsibility was to report the account to the appropriate tax authorities. If the owner didn’t declare the account, it was nearly impossible for tax authorities to find out that the account existed.
Result? The owner didn’t pay taxes on their account in Switzerland and the money grew over time.
Basically, in the era of banking secrecy (yes, that era is now over), the thinking was that money that no one knew about wasn’t taxable.
In 2007 Everything Changed…
UBS got busted for helping Americans evade taxes with anonymous accounts in 2007. Not surprisingly, the US retaliated and rolled out the big guns – information sharing, US-style.
FATCA (Foreign Account Tax Compliance Act) was introduced in 2010. Governments and tax authorities around the world rolled out their version of FATCA, called CRS in 2014. This was followed by the Panama Papers leak in 2016, which only expedited global information-sharing procedures.
Governments everywhere cried out for more transparency, compliance, and tax revenue.
After all, if governments had info about the private financial holdings of their taxpayers abroad, they could recoup billions in unpaid taxes and penalties. Just like the United States got to do with Americans under FATCA.
The result was tougher banking laws, beefier KYC & AML rules, and new compliance standards. These were all rolled out across the board. Now, anonymous banking and secrecy are dead.
The point is that banks automatically send your bank account details to tax authorities now. Banks also must now know who the UB) of the account is to be approved for an account. Banks that neglect to do so get slapped with massive penalties, lose their license, and possibly be subjected to excruciating investigations. This is the new normal.
Do You Want Our Free Non-Resident Banking Guide?
Sign up here to receive our Free Non-Resident Banking Starter Guide and weekly updates on the best account opening options available:
Why Do People Still Want Numbered Bank Accounts?
There are many reasons why someone wants to have their account anonymous. We share five of these reasons below.
1. Fascination & Intrigue With Offshore Banks
Movies get some of the credit. They’ve added to the mystique of anonymous bank accounts. They’re everywhere. Spy thrillers. Spielberg movies. Even the Wolf of Wall Street has a Switzerland banking scene where the main character is hunting for the best offshore accounts and proceeds to deposit endless amounts of cash.
It’s no surprise many people first learn about anonymous bank accounts from Hollywood and then aspire, to some degree, to get in on the “fun”!
2. True Privacy & Desire to Be Anonymous
This is tough for people from safe and comfortable corners of the world to understand, but if you’re from a country with rampant corruption and a weak rule of law, you don’t want corrupt bank employees or government officials to have access to your private account information or to be able to monitor your account transactions.
This makes you and your family more vulnerable to blackmail, kidnapping, extortion, and a host of other unpleasantries. Being anonymous, in some instances, has its benefits, especially if you have a healthy balance in your bank account.
Some banks and government employees have easy access to your personal information and account details and if that’s the case, then you’re an easy target. This is one of the main reasons that people opt to set up an LLC instead of doing business personally in places like the US, allowing them to effectively operate anonymously online.
3. Protect Data & Personal Info
Some people want an anonymous bank account to protect themselves from identity theft and cybercriminals. If your name, personal details, and account information are easily accessible and splashed all over a bank’s internal system, you’re vulnerable to identity theft and cybercrime.
JP Morgan Chase was hacked and data on more than 80 million clients were stolen in 2014. Capital One had the same thing happen and personal details of over 100 million clients were stolen in 2019. The list goes on.
It’s no surprise that there is a growing desire for anonymity, especially when it comes to online banking. Many people seek out money transfer services that allow them to send money anonymously without an account number, though we suggest avoiding such platforms.
4. Anonymously Protect Assets Offshore
Some people want to open an anonymous bank account for more traditional reasons, such as more robust asset protection. That’s why many people seek anonymous accounts offshore, numbered bank accounts, or accounts in Switzerland.
Banking anonymously only helps you if the country where the account is located has strong asset protection laws, a stable banking system, and strict bank secrecy laws. Though, as we’ve explained above, times have changed.
Numbered accounts help shield your life savings from collections against fraudulent claims and frivolous lawsuits when used correctly. They also protected you from predetermined guilt. This is a fancy way of saying your money is frozen by the court because they think you’re guilty before trial.
It’s important to always consult a qualified advisor.
5. Hide Money & Avoid Taxes
One of the main reasons people want to bank anonymously is they don’t want to pay taxes. This is why many people want to bank in non-CRS countries, like Georgia or the United States.
Many incorrectly think that the best way to minimize taxes is by opening an anonymous bank account that isn’t in their name. This is tax evasion. This is illegal in many countries, so don’t do it. It’s not the 1980s, you are going to get caught for breaking the law.
It’s also important to remember that banking secrecy is dead and banks automatically send your bank details to tax authorities in your home country.
Now, if avoiding taxes is the reason you chose this article, you’ll be happy to learn that there are 100% legal ways to eliminate or drastically lower your tax bill without an anonymous bank account. We share more details on this below.
Is It Possible to Access Anonymous Accounts Today?
Anonymous accounts are no longer possible because banks have CDD, KYC, and AML rules that require them to verify the identity of the UBO.
Additionally, automatic exchange of information (AEOI) agreements now require banks to report your account information directly to tax authorities in your home country.
This is even true when you open a virtual bank account, offshore bank account, numbered bank account, or any other way you store your money, regardless of what lawyers might tell you.
Before moving your money overseas or opening bank accounts online offshore, consider whether it’s the right choice for you and your money.
Some people still think it’s a great idea to try and open anonymous accounts. They use a third party to set up accounts for them. The third party is the signatory and the perceived owner of the account. But another person is the actual owner and uses the account from behind the scenes.
This Is Illegal Pretty Much Everywhere…
In The Wolf of Wall Street, the main character, Jordan Belfort, is advised by a Swiss banker to open a bank account in another person’s name. This way the account isn’t in his name and (theoretically)it won’t be seized by the US government, rendering his money anonymous. He decides to have his wife’s aunt, a non-US citizen, open numbered bank accounts for him. He then accesses the funds with a nameless international debit card, Visa, or Amex card tied to the account.
Alternatively, some people buy a company that has a functioning bank account that has already been set up by the previous owner or a nominee. It’s up to the new owner to inform the bank and change the signatory. If they don’t, they’ve effectively acquired an anonymous bank account.
Most people inform the bank of the ownership change and then they change the signatory. Some people don’t do this and instead, continue to operate the account under the old signatory. They maintain access to the account by using the same username, password, password device, phone, email, and ATM cards.
If the company is on a public registry that lists beneficial owners, the bank sees the ownership change. If the company, however, is from a country that doesn’t have a public registry, then the bank has no way of knowing about the ownership change.
Again, this is almost always illegal and violates the terms of use. Plus, after the bank catches on, the bank freezes your account immediately.
Are There Benefits of Having a Numbered Bank Account?
You still have access to some of the benefits anonymous accounts offer, although these types of accounts no longer exist.
By using 100% legal and fully legitimate internationalization strategies you’re able to reduce your taxes, increase asset protection, and remove leverage that any one government has over you and your money.
Knowing how to strategically use international and offshore banking is important.
Why? Because information sharing is unavoidable, even in non-CRS countries. The only way to protect yourself is by following legitimate legal strategies.
Common Strategies People Use to Reduce Taxes Without an Anonymous Account
Non-Americans usually achieve this by becoming non-resident in their home country and establishing tax residency in a low-tax, no-tax, or territorial-tax jurisdiction.
Depending on the passport(s) the individual carries, they usually shed any reporting requirements with their home country. Individuals who structure their income correctly, usually live tax-free…forever.
Individuals do this by getting a residency in a tax-free country, which has no income, dividends, or capital gains taxes. All their personal income is tax-free. Many entrepreneurs get paid personally rather than through their corporations because doing so is tax-free.
Alternatively, you get residency in a territorial tax country that does not tax foreign-sourced income. This ultimately means that any income generated outside of the country is tax-free. This is a classic example of a territorial tax country, including Panama and Hong Kong.
Both of these scenarios require you to set up banking for your investments, structures, and of course, personal offshore accounts. If you do all this, you already have achieved 90% of the benefits that an anonymous account offers you–and it’s all 100% legal!
Eliminating tax by acquiring residency and moving to a tax-free country or territorial tax haven is easier for some people than others. It’s also much easier for certain nationalities.
The American Challenge
It’s a lot harder for Americans to achieve the above as it usually takes longer and there are more hoops to go through–but it is still 100% possible.
US citizens have three options to choose from. The lite version involves moving abroad and taking advantage of the foreign-earned income exclusion, various expense-related loopholes, and filling out mountains of paperwork to report your foreign accounts.
The middle-of-the-road option for Americans is moving to Puerto Rico or the US Virgin Islands. Hire a lawyer, sign a few contracts, move your business there, hire some staff (it’s a bit more complicated than that), and shed all of your US Federal Tax obligations in the process.
It’s not a bad deal considering that you cut your effective tax rate to low single digits. But, there’s a catch. You can’t leave whichever island you choose for around 6 months a year. Just skip hurricane season and either place will do.
Then there’s the full monty. Get yourself second citizenship (maybe a third for backup), renounce your citizenship, pay an exit tax (if you’re a “covered expat”), leave the US for good, establish tax residency in a tax-efficient country, and be free of onerous reporting and overreaching governments forever.
Frequently Asked Banking Questions
Below are three of the most common questions we receive from people exploring an anonymous bank account. If you have further questions you would like answered, don’t hesitate to get in touch with us directly.
Do Anonymous Bank Accounts Exist?
No, anonymous bank accounts no longer exist because of international banking regulations. Most banks adhere to strict banking regulations, including anti-money laundering (AML) and Know-Your-Customer (KYC) measures.
Can I Have a Secret Bank Account?
No, you cannot have a secret bank account. While you can protect your personal information when setting up an anonymous LLC, most banks require personal information to open bank accounts.
Can You Open a Swiss Bank Account Anonymously?
No, you cannot open Swiss bank accounts anonymously. This is because bank accounts in Switzerland are no longer fully anonymous, all Swiss banks require applicants to provide proof of identification.
Do You Want to Open an Offshore Bank Account?
If so, you can access GlobalBanks Insider and start the process of applying for an offshore account in a few clicks.
GlobalBanks Insider is a dedicated account opening solution that involves direct support from our team and direct introductions to the banks of your choosing. It gives you instant access to the…
+ Direct support from a team of banking experts
+ Direct introductions to your desired banks
+ Answers to your most pressing questions and challenges
+ Expert insights on which banks to choose & why
+ Plus, FULL access to our entire suite of account opening tools and intelligence!
And “yes!” GlobalBanks Insider is designed to help foreign and non-resident individuals and companies open bank accounts.
Use this link to see how GlobalBanks Insider can help you successfully open accounts.
