If you’ve tried to open a bank account overseas, you’ve probably come across a bank introducer. You know the ones. They offer to help you or your company open accounts. Maybe you’ve even paid one of them for their services.
Bank introducers don’t actually offer any value. They charge thousands of dollars to make an introduction to a bank that you can contact yourself. And instead of offering any guarantees, they simply say they can’t control if the bank will accept you. But a simple review of the banks requirements will tell them if you are a suitable client. This is the old way of bank account opening. There is a better, more effective way to open accounts and it doesn’t involve bank introducers. It’s called GlobalBanks.
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What are their services? Well, usually they profess to be able to introduce you to a bank. Sometimes they offer “special relationships” and the ability to get you “pre-approved”.
But you don’t get to choose the bank. In fact, many service providers will flat out refuse to tell you the name of the bank that you’re applying to. Sounds crazy, right?
You’re literally paying for a bank introduction, yet you don’t even get to choose the bank. On top of that, you’re being “introduced” by someone who knows nothing about you or your business.
Then, magically, they deliver an introduction to a banker.
Introductions do not guarantee that you’ll get an account open. In fact, in the end, the account usually doesn’t get open. It sounds like a stellar service, right?
So to recap, you paid around US $1,000 for an email introduction to a bank that did nothing for you. And here’s the kicker. Based on your profile the service provider already knew if the bank would accept you. They just had to assess your business, nationality, residency, and the services you offer. But they took your money anyway.
Usually, if you use bank account opening services, you will have one of two outcomes:
You’ll discover that you could have opened the account by yourself. In which case, the bank never required an “introduction” in the first place. If the bank accepts you through the introducer, they will accept you directly as well. In almost all instances, banks do not need an introducer. Even if the introducer says you do. Georgia is one jurisdiction where we have been seeing many introducers say that need their services, when in fact you do not.
Georgia Is Now Popular, In Part Because It Has Not Signed International Information Sharing Agreements
You now have a useless and expensive bank account at a low-quality bank. And they probably don’t have the services that you want or need. Most introducers offer “account opening” at low-caliber banks in undesirable jurisdictions. Even though most of these banks do not need introducers. For more on why the country you bank in is as important as the bank, click here.
Mauritius is a common jurisdiction being used by bank account introducers. Though it’s not the best choice for most clients.
In either case, you paid for a service that you didn’t need. And, you probably paid a very high price. Hopefully, when you decide to shut down the account, you won’t have to pay a hefty closing fee. Though this is common at many of the banks that service providers suggest.
The first step in making sure you don’t waste money on introductions is knowing how to identify the bad apples. This can be tough, so it pays to be skeptical.
There are three main groups of people that engage in bank introductions. These include internationalization gurus, fake introducers, and corporate service providers. Each of these groups has sub-groups. Some of them even offer a bit of value.
But generally speaking, they charge absurd fees because they can help you open an account. And when they are unsuccessful, they’ll charge you another fee for the next introduction.
That’s one of the reasons that becoming a GlobalBanks Insider is so unique. Unlike bank introducers, we don’t charge you for introductions at all.
Instead, we give you the tools, strategies, and actionable intelligence that you need. You will be able to navigate the international banking world and make the best decisions for you. You choose which banks to apply to, not us. Protect your assets and avoid the pitfalls of international banking.
And, even better, you get it for a fraction of the cost that you would pay bank introducers for a single introduction.
Let’s dive into these groups so you can start identifying them. If you know the warning signs and what to look out for, you can save yourself a lot of time and money.
This is a blanket term that we use for anyone engaged in the internationalization space. They typically share their international musings through blogs or newsletters.
Generally speaking, they help people move various aspects of their lives offshore. This includes everything from offshoring assets and living overseas. It also extends to getting residency or citizenship in a different country.
These groups can offer value when it comes to certain aspects of internationalization. In fact, they can be helpful. Not as bank introducers but for streamlining research and identifying loopholes.
But given their areas of expertise, they typically focus on very specific legislation. And often, it’s focused on particular jurisdictions. In other cases, most of their information is qualitative and lifestyle-oriented.
This can include citizenship law and legislation protecting assets. It can also include tax laws and helping you understand how and where to move to make your life more tax efficient.
Unfortunately, all that information is rather theoretical. That’s not to say it’s wrong. On the contrary, many GlobalBanks Insiders subscribe to these gurus.
But that type of theoretical approach has limited value when it comes to the world of banking.
It results in content that focuses on the ease of opening in a theoretical sense. For example, they’ll tell you that you can open accounts remotely in Georgia so long as you have a Power of Attorney.
But they won’t outline the actual steps that they took to complete the process themselves. And they’re unable to provide real-world examples of people getting it done. That doesn’t offer much more value than other bank introducers.
This kind of theoretical approach isn’t wrong. But it does avoid the reality of whether you are actually going to be able to open an account. Not to mention the underlying quality of the banking jurisdictions.
Banking, while governed by mountains of legislation and regulation is actually very practical. This is because the actual experience of account opening can change in an instant.
Not to mention the differing experiences that different people can have at the same bank. Or the different experience that one person can have at different branches of the same bank.
To truly help people open accounts, you need to be assessing banks constantly. And bank introducers and international gurus just don’t do this. Banking can not be a side note to a broader research strategy, it has to be at the core of what you do. And in case you haven’t figured it out, that’s exactly what we do at GlobalBanks.
Bank introducers exist in almost every country. They prey on newbies that don’t understand the banking sector. Sometimes they target people who are unfamiliar with the local banking customs. Other times, they target people who have never opened an international account before.
In some very rare instances, a bank might require an introducer. But in those instances, this is often governed by local regulations.
The problem is that introducers will always tell you a bank requires an introduction. Even when no such requirement exists.
GlobalBanks analyzes hundreds of banks each month. We arm you with the most comprehensive and updated intelligence. Actions that you can take to enable your international banking activities. We empower you to take action so you can grow your money, protect your assets, and thrive. This includes alerts and insights on account opening practices and introducer preferences.
In the old, pre-internet days, introducers included lawyers and corporate service providers. They introduced pre-vetted clients to banks around the world.
With no internet or compliance databases to cross-check, banks depended on these introductions. If a service provider could vouch for a client, it was a valuable credibility indicator. Not anymore.
But back then, if a bank introducer made a bad introduction it would ruin their reputation. And then the internet came along and changed everything.
Since the 1990s, an entirely new industry dedicated to fake bank introductions appeared. And with the onset of the internet and online payment processing, the industry exploded.
Basically, anyone with a website could offer “bank account introductions” to consumers. No actual banking relationships needed.
But there’s another layer of motivation here as well. Lawyers, accountants, and corporate service providers make money by setting up offshore structures.
If people know certain companies can’t get bank accounts, demand for them drops. So, law firms that rely on setting up such companies for 95% of their profits keep quiet. Why on earth would they take a stand and call out fake introducers? It’s those introducers that are helping their structures appear more attractive.
Meanwhile, banks are restricted on what they can say. They have to abide by regulations that govern how they communicate with consumers.
If a bank steps out of line, they get slapped with fines. So, they have zero interest in making statements about their account opening practices.
And it’s for this reason that the fake introducers are still alive and well.
Fake introducers are very real and they really want you to pay them. The services that they are offering you are fake. And in 99% of all circumstances what they offer is completely useless. In other words, you would be far better off going through the process alone.
Yes, there are some very rare exceptions who do offer some value. But, they are the exception, not the rule. The value they provide usually involves filling out the account opening paperwork. Or if they have a genuine, long-standing relationship with the bank. And that’s basically it.
Introducers also offer other services. These can include acting as a middleman for remote opening or acting as power of attorney. Most recently, we’re seeing a handful of fake introducers spring up in Georgia.
It’s true that remote opening is becoming more difficult in Georgia, but you don’t need to hire an introducer. In fact, you don’t even need a local power of attorney to open an account remotely.
If you go to the right bank, apply for the right account, and say the right things, you will get an account. But you need to be prepared and have the right paperwork in place beforehand.
If you are already a GlobalBanks Insider, read our Banking In Georgia report. We’ll tell you exactly which bank accepts remote opening, how to do it, and how to determine if it’s a good option for you.
Can they open an account for you?
The answer is simple: maybe. If a corporate service provider is able to get you an account, odds are – you could have got the same account on your own. It just costs you a lot more if you hire a corporate service provider.
It’s also common for corporate service providers to lie. They’ll tell you that they can open bank accounts when it’s actually impossible to do so.
In fact, many credible service providers and law firms won’t offer these services. They won’t do this because they know it’s unlikely that an account will be opened at all. This is especially true for exotic companies (e.g. BVI, Seychelles, Belize, Panama, etc).
Credible firms wouldn’t dare jeopardize their reputation to make a quick buck. So they won’t even try to sell you account opening assistance.
Now you might be wondering, why would a corporate service provider lie to you? And the answer is all about economics. Most service providers concentrate on one or a handful of specific jurisdictions.
For example, one corporate service provider might only focus on Panama. Another might focus on BVI, Cayman Islands, and Belize.
Corporate service providers make money by incorporating and maintaining companies. And they do this in their respective jurisdictions. Additionally, they likely offer other services. These can include nominee directors, corporate secretary, or account services. Additionally, they might have an accounting or mail forwarding arm.
Bottom-line, the lifeblood of their business is setting up companies. Their secondary revenue source is the services they sell for those companies. And bank account opening is a small portion of what they do because they can’t.
Many service providers know that you want a bank account to go along with your company. After all, what good is a company if it can’t open a bank account? So, service providers will say that they can help you set up bank accounts as well – even if they know they can’t.
In other words, they suck you in by promising that they can help open a bank account. But their only real objective is to sell you a company and charge you fees. After they set up the company for you, you’re on your own. Oh, and if you decide to shut down the company – they’ll charge you again for that too.
These three groups are not out to help you open accounts, find the best bank, or solve your banking problems.
The internationalization gurus aren’t banking experts. And, while they may talk about offshore banking occasionally, it’s not their core focus.
Their articles and reports are often laced with outdated, inaccurate information. They’ll call up one bank, talk to one banker, and never set up an account. But from that, they’ll recommend this bank as the ‘best bank’ in the jurisdiction. Or they might say it’s amazing for non-residents…when it’s really not.
Meanwhile, fake introducers can continue to offer services because the internet hasn’t called them out yet. They prey on people who desperately need to open a bank account. Or the go after people that are new to the offshore banking world, and don’t have access to the right information.
And corporate service providers have a vested interest to sell you structures. So, of course, they’ll sell you bank introductions if it means you’ll also buy a structure from them.
In any of the scenarios above, you are paying US $1,000 to $5,000 for bad banking information. And when you do get an introduction, it’s disingenuous and won’t get you results.
Here’s a breakdown of the most important things that you need to watch out for when opening bank accounts. These are common pitfalls that people have experienced when dealing with these groups.
The bank introducer won’t tell you the name of the bank
This is a common tactic amongst introducers and service providers.
The general process is: a client pays a fee, then the bank introducer will choose which bank the client should be introduced to. They will refuse to tell you the name of any of the banks they work with. You just have to sit there and hope that the introducer chooses a bank that actually meets your needs and isn’t horrendous.
If you don’t know which bank the bank introducers are going to introduce you to, you could end up with a very low-quality bank. And it’s very common that bank introducers will introduce you to banks in a low-quality jurisdiction.
Banking at a low-quality bank or in a jurisdiction with a poor reputation can damage your business and make you look like an amateur. It also might cost you more money because the bank might have exorbitant fees or not even have the services you need. For instance, some banks can’t even send and receive transfers in US dollars!
Read more here on why the country you bank in is so important.
This is exactly why they don’t tell you the name of the bank until you pay them. They are worried that after you get the name of the bank, you will just go ahead and try to open the account yourself. Though even then your chances are low without the right strategy and the right information going in.
Remember: even if you can’t open an account, you still have to pay the introducer. You’ll also have to spend more money to either open an account at a different bank by yourself or pay them for a second introduction to a second bank.
This fee structure indicates that they don’t actually care if you successfully open an account or not. All they care about is generating as many fees as possible. Fees can range anywhere from $500-$2000 per bank.
To learn more about the costs of opening accounts, read our recent article “Bank Account Opening Doesn’t Have To Cost You Thousands Of Dollars“.
If an introducer says they have “special relationships” or can get you “pre-approved” at a particular bank, beware. This is a pretty good sign that whatever they’re offering isn’t great.
In fact, many introducers and service providers falsely advertise “special relationships” to convince people that they can get accounts open. But even if your service provider has a cousin working inside the bank, this won’t help you.
You won’t get the account open unless you have the right opening strategy. This requires the right information and you need to know the bank’s customer preferences and unspoken requirements. Only then can you present yourself in a way that is attractive to the bank. And therein lies the problem.
Regulations have changed banking forever. Front-office bankers, like your service provider’s cousin, have been stripped of their power. They can’t push through applications like they did ten years ago.
Instead, these days, everything goes to the compliance department. Here, your application is scrutinized for red flags, KYC/AML issues, and inconsistencies. The compliance department dictates your fate and decides who gets an account open.
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