What to Know Before Opening an Offshore Bank Account Overseas?

Offshore bank account opening and offshore financial services increase security, reduce exposure to economic and political instability, and provide access to a wide range of wealth management alternatives.

In this free guide, you’re going to unlock the knowledge we’ve gained from helping thousands of people open offshore and international bank accounts over the last ten years.

This will include the steps to open offshore accounts, the 10 offshore banking countries we find interesting today, and answers to all of the most common questions we get asked about offshore banking.

Key Takeaways

• An offshore bank account can be opened 100% remotely
• Offshore banking is 100% legal and offers practical benefits
• Non-resident and expat clients can access many benefits offshore
• Opening deposits can range from $500 to $5,000,000
• Requirements vary depending on your client profile and the bank

What is an Offshore Bank Account?

An offshore bank account is a financial account that individuals and businesses open overseas to hold assets and foreign currencies, conduct transactions, and engage in international banking in a foreign jurisdiction.

Financial privacy, asset protection, expat wealth management, and access to global investment opportunities are all reasons why offshore bank accounts are used by individuals from around the world. Not to mention, moving money to stronger jurisdictions, protecting savings, and accessing better rates.

Cross-border transactions and economic activity in foreign countries are also important reasons for banking overseas. This is true for businesses and individuals with economic activity, employees, and customers abroad requiring international funds to support FX transactions.

That said, legal compliance and onboarding processes at offshore banks are often more strict than at domestic banks. This is due to the scrutiny offshore banks face from international regulators and watchdogs.

Of course, certain claims by these organizations are true. But, the idea that money hides offshore and offers tax optimization today is a misrepresentation. Instead, offshore structures, trusts, foundations, and corporations are used to achieve such objectives, not bank accounts.

In other words, offshore banks offer practical solutions for individuals fleeing destructive monetary policy, businesses engaging in overseas trade, investors seeking international investments, people seeking access to payments, and more.

Additionally, due to their international nature, most offshore banks offer remote onboarding without traveling to where the bank is domiciled. This process is completed through secure onboarding processes, including video, email, and certified documents.

Tables of Contents

1. What Is an Offshore Bank Account?
2. How Do Offshore Bank Accounts Work?
3. Why Use Offshore Banks?
4. What Services Do Offshore Banks Offer?
5. What Currencies Can You Access Offshore?
6. Is Offshore Banking Illegal?
7. Where Should People Bank Offshore?
8. What Are the Best Offshore Countries?
9. How to Open an Account Offshore?
10. Where to Get Reliable Bank Information?
11. Frequently Asked Offshore Questions
12. Do You Want Help Opening Offshore?

How Do Offshore Bank Accounts Work?

In order to understand how offshore bank accounts work, we need to first clarify the different elements that exist within offshore banking. Unfortunately, many people within the financial industry get these wrong. Let’s dive in…

Note: Misconceptions About Offshore Bank Account Countries

Offshore banking countries do not include onshore locations like Germany or Canada, which typically require residency to open a bank account. This is important because many major financial publications claim that these countries are offshore banking hubs, which is wrong.

If you would like to start exploring the best offshore jurisdictions right now, you can access ten country briefings from our team of banking experts in this free download.

Before exploring where to open offshore accounts, let’s consider all of the benefits available and why you might want to use offshore banks in the first place.

Why Use Offshore Banks?

The benefits you can unlock from an offshore bank differ between countries, client types, and even the bank account you open. But, they can also differ from bank to bank.

So, when applying for an offshore account, you should understand the specific benefits you want to access. You should also consider how each bank could impact your money and which offshore banks are the best for your situation.

For example, the benefits available through private banking and wealth management are very different from retail or transactional banking. Likewise, the benefits that a business can unlock with offshore banking are different than those available to individuals.

Here’s a look at some of the key benefits foreign non-resident individuals can access through an offshore bank account.

What Are the Benefits of Opening a Bank Account Offshore?

• Stronger regulatory environment than your home country
• Better (and more diversified) finance & banking services
• More security for your savings (Not all offshore bank options)
• Fast way to diversify your money around the world
• Lower cost to transfer and borrow funds
• Access to multi-currency bank accounts away from home
• Access to offshore debit cards for international withdrawals
• Ability to transfer money into foreign markets around the world
• Investing your money in foreign markets to get higher rates
• Flexibility to transfer funds back home at any point
• One way to establish ties in the best countries around the world
• In extremely rare cases, they offer a way to reduce tax
• Unlock higher interest rates for greater returns (varies from bank to bank)
• Attractive foreign exchange rates

What Services Do Offshore Banks Offer?

Offshore banks offer many of the same services as onshore banks, including accounts for savings, checking, and investing. Additionally, banks in offshore countries offer card support, including cards that can be used abroad, often with lower fees.

That said, the average offshore bank caters to wealthy clients. So, it’s no surprise that many banks offer clients a financial advisor to assist with planning investments. They also offer guidance and information about taxes, the protection of assets (or a particular asset), and will even review your taxes to help identify unnecessary payments.

In certain instances, you can even access more attractive loan rates, higher account APY, and earn more from your investments, if you open with the right expat bank. Of course, you can also open a traditional savings and checking account.

That said, there are certain services offshore banks do not typically offer, including homeowners insurance, retirement accounts, and other domestic banking services.

Lastly, while certain offshore jurisdictions do offer deposit insurance, it’s usually less than the insurance that accounts at member FDIC banks in the United States can offer. Though in special cases, like the UAE, this is not the case.

In short, offshore banks offer many different services, ranging from basic savings accounts to sophisticated investments, often catering to wealthy clients leading international lives. And, given the need for international transactions, access to foreign currencies is critical. With this in mind, let’s look at the specific currencies you can access offshore.

What Currencies Can You Access Offshore?

Offshore banks offer multi-currency accounts for savings in major global currencies like United States Dollars (USD or $), euros (EUR or €;), Great British Pounds (GBP or £), Hong Kong Dollars (HKD or $), Singapore Dollars (SGD or $), Chinese Yuan (CNY or ¥), and more.

That said, the specific currencies available at each bank depend on the jurisdiction, government, and each bank’s correspondent banking relationships. Importantly, different jurisdictions do place restrictions on foreign currency transactions and conversions with the use of capital controls. So, it’s important to consider this before opening accounts.

Additionally, just because an offshore bank offers multi-currency accounts, it doesn’t mean you will receive debit cards with access to these currencies. While this is possible at some banks, it’s always best to confirm before applying.

Of course, the available services and currencies are not the only considerations before applying. Individuals and business owners considering offshore banks often wonder whether offshore banking is illegal. We’ll address this and dispel a few common misconceptions in the next section of the article.

Is Offshore Banking Illegal?

No, offshore banking is not illegal. Most nationalities can freely open foreign savings accounts and other offshore bank accounts without restrictions.

However, mainstream media does commonly associate offshore banking and illegal activity. This comes from the use of offshore banking and offshore financial centers by organized crime, tax evaders, and money launderers.

That said, many of the tools to support these illegal activities, including the use of anonymozied company ownership, anonymous bank accounts, and nominees have been disappearing.

Additionally, automatic exchange of information (AEOI) agreements ensure government(s) in CRS countries have full oversight of your financial accounts no matter where they are located.

Of course, there are non-AEOI countries available that do not exchange information automatically. But, in our experience, the jurisdictions that specifically cater to clients seeking “banking secrecy” are not suitable jurisdictions and should usually be avoided.

On the other hand, major jurisdictions that are commonly associated with offshore banking, like the Cayman Islands, have become increasingly difficult to access and only accept wealthy and fully vetted clientele.

Lastly, certain nationalities do need government approval before opening foreign accounts (e.g. India) or are required to report foreign accounts above certain values (e.g. the United States). So, it’s important to know your requirements and fully comply with any relevant legislation when banking overseas.

Where Should People Bank Offshore?

Deciding where to bank offshore is one of the biggest questions people face. After all, there are a lot of offshore jurisdictions to choose from.

But, at GlobalBanks, we take a very straightforward approach to selecting jurisdictions (and banks), which is:

Open accounts with the best bank in the best jurisdiction that offers the services you need, and that you can access and afford.

In other words, we don’t promote one country or bank over others. Instead, we believe that each client profile determines which countries and banks they can access.

So, if you want to a personal checking account offshore with a $500 deposit or a private bank account with a $5mm deposit, there are options available. But, they won’t be the same options.

Likewise, if you’re looking to access corporate banking for an offshore or onshore company, there are options available for both. But, they won’t be in the same country or with the same bank.

Of course, while we focus on helping each person unlock the best banks and countries they can access, it doesn’t mean there aren’t certain countries that are better than others. With this in mind, let’s dig into the best offshore banking countries.

What Are the Best Offshore Countries?

We’ve compiled a list of offshore countries below, including high-level details to help you quickly determine if a banking hub is a suitable option for you.

This list includes offshore banking hubs, Caribbean islands, commonly used tax havens for tax optimization, and the best places for offshore banking for both individual and company accounts.

But, before diving in, it’s important to note that not all jurisdictions will be suitable for all applicants. In most cases, we suggest taking a close look at your specific profile and finding the best jurisdictions and banks that match.

How to Determine Where You Should Open a Bank Account?

Depending on your specific offshore requirements, source of income, financial goals, investment portfolio, where you want to invest in the future, asset protection goals, and desired support, one overseas banking hub may be better than others. For example, while certain prospective clients may be served by Bahamanian banks, others may find Singapore a better option.

Likewise, your available documents, crypto holdings, the currencies you need to access (e.g. USD EUR GBP), the type of company you have (e.g. offshore companies or LLC), the currency you accept from clients, and which offshore banking jurisdiction around the world you desire (e.g. Hong Kong), will obviously determine where you decide to open a personal or business bank account.

What Are the Top 10 Offshore Banking Countries?

Here are ten of the offshore jurisdictions we find most interesting.

Jersey Bank Account 🇯🇪

Opening a Jersey bank account is an interesting option for anyone seeking premier banking and expat banking services.

Singapore Bank Account 🇸🇬

Singapore is arguably the best banking jurisdiction in the world. And, while it is possible to open here (including remotely) banking services are limited to certain foreigners.

Panama Bank Account 🇵🇦

Opening a Panama bank account can be a good solution for non-resident banking, owners of offshore companies, and certain wealth management structures.

Switzerland Bank Account 🇨🇭

Opening a Swiss bank account is still considered a right of passage for many. However, while Swiss banks are prestigious, they can be opaque in terms of services and fees.

Isle of Man Bank Account 🇮🇲

Opening an Isle of Man bank account is one of the best ways to get started with expat banking for foreign non-residents.

Cyprus Bank Account 🇨🇾

Cyprus has a bad reputation. But it remains one of the few transactional banking hubs in all of the EU for foreign and offshore companies.

Cayman Islands Bank Account 🇰🇾

Opening a Cayman Islands bank account is one way to get started with offshore and entry-level private banking for foreigners.

Liechtenstein Bank Account 🇱🇮

Opening a bank account in Liechtenstein is more accessible than other banking jurisdictions, offering world-class banks with lower deposits.

Luxembourg Bank Account 🇱🇺

Luxembourg is an institutional banking jurisdiction. While it is possible to open here, deposits are high and local substance is almost always required.

Guernsey Bank Account 🇬🇬

Like the Isle of Man and Jersey, Guernsey is interesting for non-residents and expats. However, deposits are higher and there is more of a focus on private banking.

How to Open Offshore Accounts?

To open an account with an offshore bank, you will need to understand your client profile, identify your specific requirements, select a bank that is willing to onboard you, and navigate the account opening process successfully. This is true in all cases, whether you want to open a business account or a personal account.

Unfortunately, opening offshore accounts can be tedious. In many cases, applicants say something wrong, don’t position themselves correctly, or provide the wrong information and end up getting rejected. Of course, this doesn’t happen with all applicants, but we see it frequently.

That’s why we stress the importance of carefully selecting where you apply and making sure you prepare before contacting the bank. If you would like help with this process, you can learn more about GlobalBanks IQ below.

In the meantime, let’s look at the most common requirements you should expect when opening an offshore bank account.

Offshore Bank Account Opening Requirements

• Proof of nationality & residency
• Government-issued identification
• Proof of income & source of wealth
• Tax identification & residence card (bank dependent)
• Completed account opening documentation
• Bank reference letter (bank dependent)
• A clear rationale for opening (bank dependent)
• Economic substance in the country (bank dependent)
• Required account opening deposit

Note: It’s important to confirm all of the specific requirements you will need to meet before applying. This will ensure you do not waste time applying at the wrong bank or in the wrong jurisdiction.

Where to Get Reliable Bank Information?

In our experience, there is very limited information on the internet that accurately discusses offshore banking. In fact, there is limited information that accurately and objectively discusses banking at all.

This was one of the main reasons we decided to start publishing our views on GlobalBanks, exclusively focusing on international banking in an objective and accurate way that didn’t exist elsewhere.

While other sites are laced with bias, busy selling you residency and citizenship programs or pushing their latest commission deals via their “preferred providers”, we are committed to bringing you accurate, objective, and actionable information on all of the available banking options.

We deliver our most valuable insights to the members of our premier services, which you can learn more about here.

Frequently Asked Offshore Questions

We decided to tackle important FAQs that other sources keep getting wrong when it comes to offshore banking.

If you have other questions you’d like us to cover, contact us and we’ll add them below.

Is it legal to have an offshore bank account?

Yes, it is legal to have an offshore bank account. In fact, opening an account with an offshore bank can offer a wide range of practical benefits (e.g. multi-currency accounts), protection from inflation (e.g. Argentina), or corruption (e.g. Russia). This is true for both business and personal accounts. However, certain nationalities do need consent before opening (e.g. India) or funding above a certain level (e.g. South Africa). In fact, due to international information-sharing agreements, offshore is rarely associated with tax anymore.

How much does it cost to open an offshore bank account?

To open an offshore bank account, there are usually no fees involved in the application process. However, certain banks may charge application and due diligence fees for high-risk clients. This is especially true when high-risk sources of wealth or income are involved, as is often the case with high-net-worth cryptocurrency investors. Additionally, if you are looking to open for a business, you may find that banks try to charge fees. If you do not have a high-risk business, then you are likely applying at the wrong bank.

Can I open an offshore bank account?

Yes. Anyone can open an offshore account as long as they can meet the account opening requirements. In fact, you can even open an account online. In certain instances, deposits start with as little as $300, depending on the country you choose. However, when opening an account for a business, banks typically want to see attractive revenue and still require an opening deposit. That said, it is rare that you will ever find an offshore bank account with no minimum deposit.

Can a US citizen have an offshore account?

Yes, it is possible for a US citizen to have foreign and offshore accounts. In fact, there are many banks still actively opening accounts for Americans in top banking hubs around the world. That said, certain banks place restrictions on US citizens, only offering savings accounts. Additionally, accounts that meet certain criteria do need to be reported to the United States government through appropriate channels during tax reporting.

How much money do you need to open an offshore bank account?

The amount of money you need to open an offshore bank account ranges between USD 500 to USD 5,000,000, depending on the bank you apply to and your client profile. That said, in most cases, applicants can open offshore bank accounts with deposits between USD 50,000 and USD 250,000. If you would like to know how much you will need to deposit to open an offshore bank account, contact us to discuss your options.

What are the best offshore bank accounts?

There is no “best” offshore bank account or “best” foreign banking country. Each country typically caters to a different type of client and financial profile. Similarly, each bank in the country typically has its own areas of expertise. So instead of finding the “best offshore bank account”, the goal should be to find the “best” account for you, based on your financial objectives, or your business.

Does having an account offshore help you avoid taxes?

No, having an offshore account does not help you avoid taxes. Tax is based on citizenship, residency, source of income, or a combination of these factors. Where your bank is located does NOT determine your tax liability, where you call home and source your income from does. In other words, where you are a tax resident is key. So, if your goal is to reduce your tax burden, consult a qualified tax advisor to explore your options.

Can an account offshore offer asset protection?

Yes, an account offshore can offer asset protection when it is used in combination with asset protection structures. This is because a foreign account on its own, even when opened in a foreign country, cannot protect an asset. Instead, in most cases, you need an appropriate structure or business in addition to dealing with banks in suitable legal environments to protect your money.

Can anyone open an account offshore?

Yes, anyone can open an account offshore. However, if the applicant’s home country or (more commonly) residence is on a blacklist (e.g. FATF), greylist (e.g. FATF), or non-cooperative list (e.g. EU), they may have fewer account opening options available. Additionally, any individual on a sanctions list (e.g. OFAC) will obviously not be permitted to open accounts.

Are offshore bank accounts safe?

Yes, generally speaking, offshore bank accounts are safe. But, not all banking jurisdictions are safe destinations for all of your money. In fact, while many “expert” bloggers promote their “top 10 offshore countries” list, most of the countries they list should not be considered for opening accounts. Instead, you should only consider opening bank accounts in reputable jurisdictions with strong regulators, stable currencies, and strong banks.

Is an offshore and foreign account the same?

Yes. An offshore account is a foreign bank account. But instead of being opened with domestic banks, an account is opened with a bank offshore.

These bank accounts still offer basic services like online banking, international transfer options, company banking, mortgages, and access to funds. But instead of catering to domestic clients, they cater to international and global clients that desire specific benefits.

What’s the point of an offshore bank account?

You might be wondering “What’s the point of an offshore bank account?” Well, as shared above, people open offshore accounts to achieve both practical (e.g. multi-currency & lower fees) and fundamental (e.g. security & reduce risks) money goals.

So the specific reason is different for each applicant. But the path to achieving the goals is always the same, through accessing stable jurisdictions, strong banks, and sound currencies. Please note, opening foreign bank accounts is not a path to reduced tax. If you are looking to reduce taxes, consult a qualified advisor.

Do You Want Help Opening an Offshore Bank Account?

If so, you can get access to GlobalBanks IQ in just a few clicks.

GlobalBanks IQ is our flagship international account opening solution. It gives you instant access to the…

+ Expert insights on which banks to choose & why

+ Step-by-step reports to open accounts in the best banking hubs

+ GlobalBanks international bank database & detailed bank profiles

+ Tried & tested banks for high-risk, offshore, & non-resident clients

+ Plus, get YOUR most pressing bank account opening questions answered by our team!

And “Yes!” GlobalBanks IQ helps foreigners and non-resident individuals open offshore bank accounts.

In fact, GlobalBanks IQ even helps non-resident, foreign & offshore entities open bank accounts.

Click here to learn more about GlobalBanks IQ and start the process of opening accounts today.