In this article, we’re sharing what country residence means from a banking perspective.
This is part of our free series on navigating the complexities of opening international and offshore accounts.
That said, you can access our guide for navigating offshore bank accounts for free by clicking here.
Feel free to use the table of contents to jump ahead to the sections most relevant to you.
Table of Contents
- Country Residence Means
- Country of Residence vs Nationality
- Frequently Asked Questions
- Ready to Explore Your Options?
Country Residence Means
Country of residence means your country of tax (or fiscal) residence. This is the country where you have a legal right to reside and are obligated to report taxes. However, it is possible to have residency in multiple jurisdictions, in which case the country where you normally reside and pay taxes is usually your country of residence.
Importantly, each country determines residency in its own way. So, if you are trying to determine where you are (or are not) a resident, you should check with the relevant authorities in your countries of interest.
Here is a look at several ways that residency is determined:
- A country where the person spends 183 days (or more) in a tax year
- A country where the person has their “center of vital interest”
- A country where the person physically carried out work
- A country where you maintain your primary abode (home)
- A country where you have dependents
Again, each country is different in the way they determine residency. So, be sure to check with your relevant jurisdictions in order to determine your local status in the country.
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Country of Residence vs Nationality
The main difference between country of residence and nationality is country of residence refers to where you live and country of nationality refers to where you have citizenship. In other words, you can obtain residency in a country where you do not have citizenship.
That said, most people are residents of their home countries. In most cases, a person only obtains residence elsewhere when they leave the place where they were born and legally obtain residency elsewhere. However, certain countries do have other ways of determining residency, most notably the amount of time spent in the country.
Why Does Country of Residence Matter When Opening a Bank Account in the United States?
Country of residence matters when opening a bank account. This is true whether you are opening onshore or offshore. That’s because regulators in all countries require financial institutions to collect this information for identification purposes.
Additionally, this information is used to complete risk assessments and establish norms for transaction behavior on prospective clients, which can change depending on where a prospective client lives.
Lastly, collecting this information also allows the US to meet its obligations under joint information-sharing agreements.
Frequently Asked Questions
Below are two of the most common questions that we receive from people looking into what country residence means in terms of banking. If you have further questions you would like answered, don’t hesitate to get in touch with us directly.
What Is a Country Residence Example?
A country of residence example is where you are a permanent resident and obligated to report your taxes. For example, if you live and work in the United States, then the United States is considered your residence. Additionally, it’s important to note that country of residence is separate from country of nationality.
What Do I Put for Country of Residence on My Bank Application?
When filling out “country of residence” on a bank application, you should put the jurisdiction where you are a tax resident. This is what banks are generally looking to understand. That said, if you have residency in multiple countries, you generally put the country where you report taxes and reside most of the time. If you need further clarification, you can always check with your banker before proceeding.
Ready to Explore Your Options?
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Of course, if you have any questions, please contact us directly.
