Last week, members of the GlobalBanks team descended on several Caribbean islands to explore various banking sectors and determine whether or not they are worthy banking hubs for our members.
And while many parts of the Caribbean have been picked over, there are still a few non-obvious banking sectors that can be overlooked gems and have special capabilities for certain clients… making them interesting for GlobalBanks Insiders.
If you’re new to the offshore world and need an initial primer on why you should be moving a portion of your money abroad, get started with our Ultimate Guide to Offshore Banking for free by clicking right here.
Aruba is well-known holiday hotspot for vacationers from Europe and North America. But it’s often overlooked by many in the offshore banking world.
There are a number of reasons for this. On the most basic level, Aruba is ignored because there are simply better, more established banking options in the Caribbean. The other reason is that Aruba has one of the smallest financial sectors in the Caribbean. They care more about domestic tourism than being a banking powerhouse.
But as we continue to see offshore banking hubs wiped out by regulatory pressure, it might be time to start considering alternative banking destinations.
So, we set out to see if Aruba could be an interesting option for offshore accounts…
Aruba is a tiny island 13 miles off the coast of Venezuela. And, like other islands in the region, Aruba is a Dutch constituent country, meaning it’s actually part of Netherlands.
And while it’s neighbor, Curacao, made an appearance in the Netflix series Narcos as a banking hub for a Colombian cartel, Aruba has remained under the radar… at least in terms of banking.
Back in 1940s, during WWII, Aruba was home to the second largest oil refinery in the world. But today, this tiny island is focused almost exclusively on tourism.
As for banking, being a Dutch constituent country comes with other pros and cons. Information sharing with European countrymen, a con for many. Strict regulation and sound banking practices, usually a pro.
We’ll cover these and other important considerations in today’s article on offshore banking in Aruba for non-residents….
There are a few obvious factors that make Aruba a more secure and stable banking hub than many of the other sandy banking options. But instead of accepting these factors at face value, we decided to dig a little deeper and get to the heart of the issue, sitting down with bankers and assessing the situation for ourselves.
But before diving in, let’s start with the obvious question: “Why would anyone bank in Aruba?”
Aruba one of the most pristine islands in the Caribbean. It’s postcard perfect white sand beaches, crystal blue water, and a fusion of Dutch and Afro-Caribbean culture gives Aruba a unique and interesting flair.
And that brings us to one of the first reasons why people bank in Aruba…
Aruban banks actually offer mortgages to foreigners and non-residents who want to purchase real estate and even time-shares on the island.
Since Aruba is a haven for vacationers from North America and Europe, it would make sense that some of them would be interested in obtaining financing for a property purchase there. And while the overwhelming majority of people who visit Aruba are vacationers, a select few do actually end up moving to Aruba for a large part of the year.
The second reason why foreigners look to bank offshore in Aruba is because they actually spend a considerable amount of time in the country…
Aruba is one of the islands that attracts affluent foreigners for extended stays. So it’s uniquely accustomed to non-residents and foreigners looking to open accounts to facilitate their travel and local spending.
And while that might seem like an obvious need, non-resident banking is becoming difficult. If you don’t have any formal “ties” to a country and don’t have a residency permit, banking can be tough. If fact, it’s not even possible in many countries.
To round things out, we should tell you why you wouldn’t want to bank in Aruba… and that’s for any type of business banking.
In fact, many of the business owners and investors that we met with in Aruba expressed that they did all of their commercial banking “off island”. They typically looked to bank in Curacao, a surrounding Caribbean country, or directly in the United States.
As we’ve mentioned before, banking in the US is a great option for non-residents and foreigners looking to facilitate business banking or payment processing. We cover this in detail in our Comprehensive US Banking Guide. Click here to learn more.
Aruban banks charge high fees for inbound and outbound transfers, are above average in terms of exchange fees, and don’t offer any valuable commercial banking products. So if you’re looking for a business banking option in the Caribbean, Aruba is a pass.
Caribbean banking hubs have suffered from a number of embarrassing scandals over the past 5 years. That can’t be denied. But the Caribbean isn’t the only region under the microscope.
When compared to the banking challenges experienced in lesser known jurisdictions like Estonia and Latvia, as well as established hubs like Andorra, Germany, and even the US… the Caribbean can be an attractive option for some people.
So before believing the false narratives being perpetuated by the media and Hollywood that “all offshore banking (especially in the Caribbean) is bad”, we ask that you direct your attention to the many banking failures, money laundering scandals, and illegal activities that are being uncovered in Europe and the US on a regular basis.
In other words, the Caribbean has its issues like everywhere else. But as long as you are choosing a politically stable, financially sound jurisdiction, the bigger and more important consideration are the individual banks themselves.
Unlike many banking hubs around the world, for the reasons we explained above, Aruba is still open to non-residents account opening. Of course, there is a requirement to show up in person, though you would be hard pressed to find a better place to visit to open an account.
For this reason, one of the most important benefits of account opening in Aruba is the fact that some banks here will actually consider opening accounts for non-resident foreigners. It’s additionally comforting that the banks themselves are familiar with foreigners and well-versed on how to open accounts for such customers.
And if you choose the right bank, you could also be on your way to owning your own property in Aruba with domestic financing, which is a nice bonus.
That said, you do need to be careful which banks, branches, and accounts you choose. The account details, charges, and requirements vary and not all banks will accept non-resident account holders.
In fact, opening with the wrong bank in Aruba can lead to painful customer service experiences, long waits for support, and the need to show up in person to resolve account issues – which is a problem if you’re non-resident and not spending a huge amount of time on the island.
Choosing the wrong account can also result in extortionate international transfer fees, foreign currency fees, and very high maintenance fees, all of which can contribute to your Aruba bank account being more hassle than benefit.
Fortunately, if you are interested in opening an account in Aruba and you are a GlobalBanks Insider, you will be able to compare the banks in Aruba and get our analyst insights using the GlobalBanks Database, which is currently being updated with a number of our preferred Aruba banking options.
And if there is enough interest from GlobalBanks Insiders, we will also recap the specifics of account opening with a premium intelligence report on account opening strategies and specific contact details for banks in Aruba.
There are of course risks to banking in Aruba, like any country. And before opening accounts, you should consider the various issues that you can face both when opening and maintaining an account here.
Aruba also sits only 13 miles off the coast of Venezuela. And while the two jurisdictions have maintained relations for many years, there is always a risk that the situation in Venezuela could negatively impact Aruba, as it continues to deteriorate.
Similarly, external pressure from another country or foreign regulatory authority could also have a negative impact on Aruba. Canadian banks, a long-time stalwart in the Caribbean are beginning to roll back their operations across the region. This is already happening in Aruba and will likely deliver changes in the coming years. That said, Canadian banks are not our preferred banking options in Aruba, and there are two other banks that we strongly recommend considering first.
Lastly, as mentioned, Aruba is a constituent country of the Netherlands. Literally, Arubans are Dutch citizens and carry Dutch passports. So you should expect information to flow freely between the EU parent country and your home country (or wherever you have tax residency). With this in mind, if you have any concerns about your information being shared, consider one of the non-CRS countries that we have shared in the CRS tracker, which you can access here.
If you are interested in opening an account in Aruba, you have a number of banking options available to you. But knowing which one is best suited to your needs (and won’t cost you a fortune) is key to making your account opening a success.
For example, if you are simply looking to open an account for geographical diversification or make local payments easier, you’ll likely be interested in one of two banks.
Alternatively, if you’re looking to open an account with the hope of purchasing real estate or a timeshare in Aruba, there is one bank in particular that you should consider.
Alternatively, if you are looking to secure high interest deposits, Aruba isn’t a destination that we would recommend considering. There are better options within the region that you should consider instead. Similarly, if you are looking for a transactional account, Aruba is not the best destination.
To open a bank account in Aruba you can become a GlobalBanks Insiders and gain immediate access to our GlobalBanks Database, Premium Reports, and Real Time Analyst Support.
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