Ultimate Guide to Opening Accounts in 2021
Ultimate Guide to Opening Accounts in 2021
In this article, we're pulling back the curtain and giving you the tools that you need to open an offshore bank account.
In fact, you'll receive the same account opening strategies that we share with our premium members. Each strategy is designed to help you successfully find and open an offshore bank account that matches your client profile.
So, if you're interested in opening an offshore bank account, keep reading to uncover everything you need to know to get started.
If you want to start opening offshore bank accounts, you need to know which banks are going to accept you, what their opening requirements are, and how to open accounts without wasting your time or money.
In this article, we’re going to answer all of these questions for you.
But, there’s a lot that we’re not going to include in this article. Including the account opening secrets that we share in our “Ultimate Guide to Offshore Banking.“
But you’re in luck…
Signup to the GlobalBanks Newsletter now and we’ll send you a free sample of our Premium Report the Ultimate Guide to International Banking as our way of saying thanks. It includes…
To answer this question, lets start off with a different one:
Why do so many sophisticated investors and business owners open offshore bank accounts?
Do they know something you don’t? Maybe they just know where to go for the best banking options.
You see, domestic banks in most Western countries are underperforming on almost all metrics. Whether you’re comparing balance sheets or management practices.
It’s true, domestic banks tend to be over-leveraged and make riskier decisions than the offshore alternatives. Meanwhile, offshore banks tend to be safer and more financially sound.
In other words, the right offshore bank account can offer you better security and a wider range of banking services than those currently available in most developed countries.
There are lots of reasons why people avoid offshore banking, not the least of which is how the media and regulators try to undermine the benefits of offshore banking for their own benefits.
But the truth is, the world is more interconnected than ever before in history. And this is especially true in the world of international finance and banking.
We are no longer restricted to opening accounts at the bank down the street. We have banking and investment options available to us in almost every country around the world.
Not exploring those international options would be a disservice to yourself.
Offshore banking helps you protect, growth, and diversify your wealth. And, it’s not just for the super wealthy. There are real concerns facing everyday, law abiding citizens who acquired their wealth through old fashioned hard work.
And offshore banking protects you from those concerns, whether it’s frivolous lawsuits, asset confiscation, asset forfeiture, overreaching governments, fiscally irresponsible banks, or high-risk banking practices in your home country.
The fact that you’re reading this article suggests that you already understand some of the benefits of offshore banking. And with the right tools and strategies, you’ll soon be in a position to start benefiting yourself.
Today, many GlobalBanks Insiders are using offshore banks for a variety of reasons. They benefit in different ways and all had different motivations for opening accounts.
Some wanted personal accounts for everyday transactions or to decrease hefty fees. Other Insiders are business owners looking to pay suppliers and process local payments in different countries.
Some are entrepreneurs with international businesses who use offshore banking to complement their businesses and enhance tax-efficiency.
These Insiders know that they can find safer banks, better service, and better returns offshore. And they also benefit from reduced risks and enhanced asset protection.
Then, there are the market-driven Insiders, hunting for higher returns via offshore bank accounts. They know that higher interest rates are available at offshore banks. And they need to know the best banking options for growing their wealth.
But before you can reap the benefits, you need to know which countries and banks to target, which strategies to use, and how to avoid the pitfalls when opening an offshore bank account.
Unfortunately, opening bank accounts abroad is becoming more difficult. Banking laws and regulations are not only changing, they’re getting stricter. And this trend will only continue, which means account opening will be even more difficult in the future.
The days of “easy” account opening are gone. And trying to open offshore accounts without the right information and contacts has become almost impossible and painfully expensive.
Lucky for you, that won’t be the case, all the information you need to open accounts successfully while reducing costs is included in this article….
Before going any deeper, it’s important to address some of the challenges that you will undoubtably face opening offshore accounts.
After all, while the world is more connected than ever before, regulations are increasing and it’s becoming much more difficult to actually open accounts.
In fact, discrimination is alive and well in banking, and if you belong to certain groups of people or businesses you will face a lot of challenges opening accounts.
For instance, if you’re a non-resident, have not established tax residency, own a foreign company, or do business in certain industries, you’re going to be turned away by most banks.
The reason for this, quite simply, is that you will be seen as a high-risk client in the eyes of banks and regulators.
That might seem strange, but unfortunately it’s the truth.
As more and more people bank outside of their home countries, governments are trying to hold on. They don’t want to lose hold of your money, your information, and “their” tax dollars.
Governments and banks are now exchanging information on account holders automatically, so hiding money in offshore banks isn’t only impossible – it’s a thing of the past.
Sweeping information sharing and strict AML and KYC laws mean that there is nowhere to hide. So, if “hiding” anything was part of your master plan, don’t bother.
If you want to decrease your tax bill, there are 100% legal ways to do this. In fact, there are countless ways for you to structure yourself in a tax efficient manner legally.
Just be sure to check that whatever structure and entities you end up using can actually open bank accounts and won’t be looked down on by regulators.
One of the most challenging by-products of increasingly strict banking regulation is something called “de-risking.”
De-risking basically translates into banks are scared. One misstep or bad customer can result in massive penalties.
Compliance departments now rule over the onboarding process of new clients with an iron fist. They dictate whether you are accepted as a client or whether your account should be frozen or terminated.
In fact, the new rules of the banking world have become so overbearing and expensive, that banks have just started rejecting new customers altogether. And they’re also purging existing clients that don’t fit their “ideal” risk-profile.
And all of this extra compliance comes at a cost, literally. Today, banks are unable to keep up with the ever-increasing demands of regulators and the increasing compliance burden that they’re being asked to carry.
In some instances, it’s easier for them to reject new customers and terminate accounts of anyone they consider “undesirable,” a practice known as “de-risking.”
Banks are getting picky about who they accept as clients. And, it’s only going to get worse.
In this scenario, it’s the people and businesses who are “easy” to onboard, don’t raise red-flags during the account opening process, and who have a low-risk profile who win.
The problem is that most people don’t know the new rules of the game. They go in blind. Choose the wrong bank. Carelessly slap together application answers.
They don’t understand the bank’s sensitivities, likes and dislikes, account opening quirks, or the best strategies…so they end up denied.
After all, whether you’re opening a bank account or sitting down at a restaurant, everyone appreciates a client that is easy to serve.
When it comes to account opening, this means that you need to prep carefully and strategically before setting foot in a bank or interacting with bankers. You need to clearly understand your banking goals. And you need to know the benefits that you’re actually after.
That means you need to be aware of the risks and disadvantages of the bank, bank account, and more. You know, those little, hidden “cons” that no one talks about – like hidden fees, internal policies, restrictions, and compliance quirks.
But all of that will come when we go through the process of actually opening an offshore bank account…
Yes, opening an offshore bank account can be complex. But, we’re going to simplify it for you.
Here are a few common stumbling blocks that lead unprepared applicants astray.
That means slowing down your account opening process dramatically because of additional requests for costly documents, more intense scrutiny, or in person interviews. Worse, it can result in your account application being denied without explanation and forcing you to start from scratch.
If you don’t address these ahead of time, it can result in a long and expensive account opening process.
Our team has been dealing with offshore banks, opening accounts, and analyzing the offshore banking sector for over a decade.
Like any task you take on, before applying for an offshore account, you need to be prepared. Otherwise, you’re setting yourself up for account opening failure.
And if you’ve ever been on the receiving end of a bank account rejection, you know how painful and frustrating that can be… especially if you have invested considerable time and money into the process.
Unfortunately, being rejected by banks is a very common outcome.
What’s worse, is that it could be completely avoided. Choosing the right bank, understanding its account opening quirks, and addressing the issues above before applying will dramatically improve your chances of opening an offshore bank account.
GlobalBanks Insiders use specific strategies, intelligence reports, and banking data from the GlobalBanks Database to inform their offshore banking applications.
These strategies, combined with the GlobalBanks country and client reports, help Insiders achieve success faster and at a fraction of the cost.
To get started, here are a few foundational concepts that applicants need to understand before trying to open an account at offshore banks:
At GlobalBanks, we work to help you understand these points and provide proven account opening strategies and real-time analyst support.
The key is understanding how and where to apply the knowledge above to get an offshore bank account open. That’s why having the right tools, intelligence, and contacts before applying is critical to account opening success.
For instance, without even knowing it you might flag yourself as “high-risk” at one bank, but not at another. This could be because something you say to one banker might be considered a “red-flag” at a bank in England, but not at a bank in Panama or Singapore.
Likewise, if you go to the wrong branch or approach the wrong banker, you’re also going to face challenges opening an account.
For instance, it’s not uncommon to get denied on the spot or told that you can’t even submit an application if you show up at a branch unannounced.
But it’s not because the bankers don’t accept in person applications, it’s simply because they don’t like your client type or business.
Knowing which banks, branches and bankers to approach (and which to avoid) is crucial. And knowing which banks and bankers accept clients like you is key to success.
If you don’t know your target banks (or branches), you’re setting yourself up for failure. It’s like sending yourself on an expensive fishing expedition to the middle of the dessert, you’re about to waste a lot of time and it costs a lot of money.
And it happens all the time. We’ve seen people waste thousands trying to open accounts at banks that would never accept them.
Even worse are those that accidentally red-flag themselves during the application process and end up ruining their chances of opening a bank account without even realizing it!
Let’s take a closer look at account opening pitfalls and consider the importance of your client profile so you don’t fall into the same trap.
So far, we’ve discussed some of the common pitfalls of account opening and the problems that new applicants face when applying to banks.
We’ve also touched on the approach that GlobalBanks Insiders when opening accounts that ensures the highest possible chance of success.
But now, let’s break down the account opening process so you can start opening accounts for yourself.
Account opening is becoming increasingly difficult. Banks today are under increasing pressure from international authorities, have much stricter laws and information exchange rules than they did just 5-10 years ago.
Today, if a bank takes on a bad client, they face severe financial penalties and the wrath of regulators – so it’s easier to reject new applicants than take a gamble.
In order to take advantage of the offshore banking and successfully open accounts, you need the right approach to account opening. You need to target the right banks, have the right contacts, and have the right strategies going in.
By now, it should be clear that regulators are coming down hard on banks.
Getting “tough” on account opening and having a zero-tolerance policy for risky behavior after an account is opened is how banks protect themselves.
Of course, this zero-tolerance attitude has some unfortunate side-effects as well. Legitimate individuals and businesses are now struggling to open offshore bank accounts.
This might be in the form of safer banks, higher interest rates, investment diversification, tax-efficiency, privacy, asset protection, inflation protection, and beyond.
And if you’re thinking about the future, offshore bank accounts can help you grow your wealth with better returns and new investment products not offered in your home country.
If any of these benefits sound interesting, you need to know how to open offshore bank accounts, how to talk to bankers, and know which banks to apply to. Most importantly, how to present yourself as an attractive client to your bank of choice.
Let’s start by talking about you…
When it comes to opening offshore bank accounts, one of the most important considerations is you. Your “client profile” or “risk-profile” to be more specific.
Understanding your profile and how bank’s view you, can make the difference between opening an account or wasting thousands on a rejection.
Below we’ll outline several specific categories that are high-risk. If you fall into one of these categories, take extra care when applying for an account and preparing your documentation.
But before looking at categories, here are some of the specific things that banks don’t like to see:
The bank doesn’t only look at you and your business to determine your risk level and client profile. They also consider the industry that you operate in, the estimated size and frequency of transactions.
And of course, the types of products and services you sell, as well as who your customers are. All these factors can potentially red-flag you as a high-risk applicant.
The result of being “high-risk” is often a flat-out denial from the bank. Sometimes, if you’re not rejected immediately, you’ll first be put through a much longer and more intensive account opening process.
This longer process will typically include additional document and authentication requests, more in-depth questioning, and more “enhanced due diligence” on your particulars. It’s costly and time-consuming, and at the end, you still might be denied.
If you or your business operate in any of the industries below you might be considered “high-risk”, depending on which country you’re in and which institution you’re banking at.
This can also be true if you serve customers or businesses that operate within these industries, even if you don’t.
So, if you have any exposure to any high-risk industry, prepare your application carefully, understand the keywords and phrases that alarm bankers, and be prepared to clearly articulate your position and help bankers understand why you’re not high-risk.
Not all offshore bank accounts are created equal. This is a fact. So it’s important to consider what you’re actually looking for before choosing where to apply.
But instead of following the herd into the newest banking hubs, you need to consider your specific needs. After all, everyone’s banking needs are different.
To do this, you need to make sure you’re asking the right questions. Doing this will help you clarify your needs and will even point you to the best banking options for your situation.
Take a minute to answer these questions for yourself or your business. Keep your answers in mind as you go through the bank selection process and attempt to open accounts. If you’re talking to a bank that doesn’t match your requirements, move on.
In fact, most people don’t look at them closely until after they are rejected or find themselves stuck with a pricey bank account they can’t even use.
Instead, start your offshore banking journey off on the right foot and ask yourself the above questions first. Doing this will make account opening and banking easier later on. And it’ll save you time, money, and frustration during the bank selection and account opening process.
To get the best possible bank accounts open for you or your business, be pragmatic. Understand the system and the players. Work with bankers and make life easy for the compliance team. Make it easy for them to “tick” their boxes. After all, they’re not the enemy. They’re just trying to do what regulators tell them and avoid being penalized.
In other words, don’t go into the process thinking you are entitled to a bank account. Realize that times (and laws) are changing. Although opening offshore bank accounts used to be easy, its now difficult and loaded with KYC, AML, CFT rules.
If you want an account at an offshore bank, you have to play by the new rules. You need to understand each bank’s account opening quirks and requirements. Understand their compliance. Determine your risk profile and where your vulnerabilities are. And, make your banker’s life easier by being prepared.
We’ve discussed how to approach prospective banks and bankers to open accounts. Now, let’s talk about bank selection and how to choose the right bank.
At GlobalBanks, we give you access to a database of over 250 banks, including analyst insights, account opening strategies, customer feedback, risks and concerns, and much more. In fact, our analysts constantly monitor over 1000+ banks around the world, so even if you don’t find what you’re looking for in the database our analysts are fully equipped to support your most difficult banking challenges.
Of course, if you’re willing to put in the countless hours of research, you could try to do it yourself. That involves calling and emailing banks, hunting down contact details, talking to customers, analyzing fee lists, studying bank financials, determining which banks actually accept your client profile, and more.
But, if you don’t want to go through that entire process on your own, you can just access all of that information immediately from the GlobalBanks Database.
Let’s start with some context…
Some banks are money pits, bleed you dry with exorbitant fees, and are managed by people with zero banking experience. So, be careful. Bank selection is incredibly important.
Alternatively, even the best banks in the world aren’t a good fit for everyone.
Here’s an example: Maybe you like the idea of old school private banking and think UBS Switzerland is the perfect place to grow your wealth.
But if you can’t hit the deposit minimums, afford the fees, or buy the products they’re offering… you’re out of luck.
You need to find a bank that actually fits you, your money, your profile, and that’s a good thing.
Otherwise, if you go with a bank that is out of your league, you’ll be faced with expensive and unnecessary fees for services you didn’t actually want in the first place.
And before you say “I’ll just shut down the account” don’t forget that closing an account can require additional fees, long periods of correspondence, or worse… an in person visit to the bank.
The moral of the story is this: spending time and money compiling documents, answering questions, flying to a bank, and applying for an account is a complete waste of time and resources unless you know you’ll be accepted.
Let’s say you’re thinking about opening an account with Banistimo in Panama. But given your needs, your wealth, and your client profile, you could actually open accounts with a much better bank than Bantimso.
So while Banistmo would be happy to have you, there are better options out there that you should explore instead.
This section isn’t going to tell you which specific banks to apply to. Because there is no one, single bank where “everyone” should open an account. But, this article will show you exactly how to identify the best offshore banks based on your specific needs, wealth level, and concerns.
To pinpoint the best offshore banks for you or your business, follow the next four steps.
Below are examples of non-negotiable requirements that individuals and businesses might require their bank to have:
Again, these are examples of “must-haves” that many require a bank to have before opening an account. Before moving on to Step 2, make a list of your “must-haves”.
Not all banks have the same services. So your challenge is to find a bank that has all those critical, non-negotiable services and functions that you need.
In this step, the goal is two-fold: 1) to find banks that match your “must-have” list and 2) to find banks that will actually accept you.
At GlobalBanks, we give you all the tools you need to cross-reference banks against your client profile and criteria specific to you. This allows you to quickly assess each bank based on the “must-haves” you outlined in Step 1. The goal is to find the overlap. Which banks have what you need and will also accept you.
By the end of Step 2, you should have an initial list of banks that match your criteria and will realistically open for you. This is essential before moving forward with the next steps.
After completing Step 1 and Step 2, you should now have a list of “target” banks. Now, it’s time to see if the banks feel the same way.
If you’re already a GlobalBanks Insider, run a quick search for your desired bank in the GlobalBanks Database. Then, open the bank’s profile to see analyst insights and learn about the banks official (and unofficial) the account opening requirements and areas of caution.
Based on a bank’s profile, you’ll be able to determine instantly whether or not the bank is a good fit and if you can realistically open an account.
GlobalBanks Insiders also benefit from our team’s analysis of first-hand account opening experiences of past applicants. We call this peer analysis. And, this is important because in almost all instances, what a bank says it’s opening requirements are on paper and what a bank’s requirements actually are in reality, can vary dramatically.
This includes the bank’s stated requirements, and the lesser known requirements they don’t share publicly.
But finding those unspoken requirements can be very time consuming and nearly impossible if you don’t know where to look.
To get instant access to the Bank Database, our Bank Profiles and the information you need to open accounts, you can become a GlobalBanks Insider right now.
Again, these are just a few examples of account opening requirements that you should know before applying to open an account. There can be many more requirements depending on your needs and the banks you’re considering.
GlobalBanks is on a mission to make international & offshore banking more accessible to everyone. For that reason, if you sign up right now to the GlobalBanks Newsletter, we’ll send you a free sample of the Ultimate Guide to International Banking right away!
GlobalBanks is on a mission to make international & offshore banking more accessible to everyone. For that reason, if you sign up right now to the GlobalBanks Newsletter, we’ll send you a free copy of the Ultimate Guide to Offshore Banking right away!
The country you choose to open an offshore bank account in is critical. Even if you find the “best” bank, it means nothing if you the country is fundamentally flawed.
Unfortunately, many middlemen push certain countries as “great” banking hubs – without understanding the country or explaining the risks and potential problems.
Offshore bank accounts offer a huge amount of value. And anyone who wants to diversify, grow, or protect their wealth should bank offshore. But you need to have all the information to make an informed decision.
Below are some of the key factors you need to consider when choosing your banking jurisdiction.
It’s not uncommon for banks to convert foreign transfers into local currency. While that might not sound horrible at first, it can become problematic (and expensive) if your account is in a foreign currency.
For example, let’s say you have a USD account in Singapore. At certain banks, if you send an outgoing wire in USD from your USD-denominated account in Singapore to a USD account abroad, you’re going to hit with extra conversion fees. Why? Some Singaporean banks force all transactions to be converted into Singapore dollars (SGD). This can also happen with ATM purchases and withdrawals.
Most people don’t realize how painfully expensive forced conversions are until after they’ve opened their account and they notice that their single-currency transfers are abnormally expensive.
And that’s because they don’t ask the right questions before opening the account. After all, most people don’t realize that banks can force conversions for single currency transactions. This can be for incoming and outgoing transfers, credit or debit card purchases, or ATM withdrawals.
If your bank forces you to convert into the local currency for every transaction, things can get expensive, very quickly. This is especially true for businesses with many foreign currency transactions each month.
A major focus of this article is keeping your money safe. When it comes to the country you might bank in, we’re talking about determining if the central bank and the government are well capitalized.
The country’s capitalization, or financial health, will tell you whether or not they can realistically step in and provide support to the banking sector in a time of crisis.
The European Union and many other countries are starting to consider implementing bail-in legislation. We’ve touched on this in a few of the sections above already.
But to quickly recap, “bail-in” means that governments are passing laws that will force depositors to lose the unsecured portion of their deposit in exchange for bank stock.
This is exactly what happened in Cyprus. In short, depositors were forced to accept worthless bank stock instead of getting their money back.
Banking in a jurisdiction that is considered high-risk can be a major pain for managing your banking activities.
But “high-risk” can have many different meanings, depending on who you ask.
For example, some countries are considered “high-risk” if they are on a certain watch-list. But, just because a country is on a particular watch-list isn’t always an immediate cause for concern. In fact many countries that frequent these lists (e.g. Panama) can still have great banks and offer good banking options.
Does the country have a bad reputation? If you bank there, will you or your company’s image suffer as a result?
Stereotypes exist. And they extend to your banking activities as well. Clients, partners, and suppliers will question where you decide to bank.
For example, countries like Belize, Seychelles, Cayman Islands, and Latvia have negative reputations.
With this in mind, you should aim to make sure the country you bank in doesn’t cause problems, hurt your business, or harm your business relationships.
Yes, regulations can seem bureaucratic, inefficient, and annoying.
But, the reality today is that countries who don’t fall in line and implement international compliance standards are vulnerable.
Banks and countries that turn their noses up and refuse to implement KYC AML, CFT policies are under fire, attract scrutiny, and risk being cut-off from the financial system altogether.
In fact, international authorities came up with an effective way to motivate banks (and entire countries) to fall in line with regulations: they introduced heavy fines for non-compliance and the threat of losing one of the most important things that a bank can have, a USD correspondent banking relationship.
In other words, banks that don’t follow the rules get massive fines, restrictions on their operations, or get cut-off from the financial system entirely.
And that’s why it’s important to understand if a country is following international standards and how it is viewed in the international community.
If a country’s banks constantly aggravate international authorities and are viewed as “high-risk” or a nuisance, they risk being crippled by harsh restrictions in the future.
Here’s how this can impact you: banking disruptions, account freezes, new restrictions, limits on transfers, paperwork requests for every transaction, or account termination.
So it should go without saying that finding a bank that adheres to international standards, can actually protect your money and minimize disruption.
By contrast, banks that don’t follow international standards and have out-dated compliance procedures can put your funds at risk.
Plus, banks that have a lax attitude on regulations and compliance attract risky customers and illicit activities. Regulators and international authorities know this and watch closely. One misstep can put a bank out of business.
And while you, as the customer, aren’t involved in illicit activities, choosing to bank at financial institutions that are on the ‘naughty list’ can put your money at risk.
Just look at ABLV. Thousands of innocent people had their accounts frozen, funds confiscated, and had to wait for months to get access to their money. When customers were informed that they had to open new accounts elsewhere in 30-60 days, they ran into even more difficulties.
Other banks didn’t even want former-ABLV customers as clients. By simply banking at ABLV, innocent customers who did nothing wrong were tainted by scandal, had difficulty opening accounts at other banks, and were now viewed as “high-risk” just because they banked there.
The country you choose to bank in is as important as deciding where to live or where to buy an investment property. You wouldn’t buy a house or move your family to a war torn neighborhood. So why put your money there?
It doesn’t matter if you’re starting out or sitting on a small fortune – banking is personal. And the jurisdiction you choose to bank in should mirror your priorities. And each country, just like each bank, is different.
We talk to bankers, regulators, compliance officers, economists, advisors, and, of course, customers to understand what’s really going on behind closed doors, inside of the world’s most secretive industries.
Through our research, we’ve discovered several banks in multiple jurisdictions that are hidden gems. They open accounts for non-residents, foreign companies, and even Americans.
In the list below, you won’t see stereotypical “tax havens” countries like Belize, the Bahamas, or the Cayman Islands. Instead, we focus on established, financially sound banks in reputable countries that do business with real, hard-working people and businesses, not just the super wealthy.
Here is our list of the banking jurisdictions that should be on your radar:
Today, Singaporean banks hold over US $36.35 billion in non-resident money. That’s the second highest amount ever recorded for non-resident deposits in the country.
But it’s not because Singapore is easy to access. In fact, it can be quite challenging if you don’t have the right information. Instead, we’re seeing the world’s rich flocking to Singapore because they view it as a safe haven for their financial assets, and it is.
Singapore is a solid banking hub today because the country is fiscally responsible, has no debt, rule of law, and its banking regulators don’t mess around.
Singapore’s uncompromising standards over the past 40 years created some of the strongest and best-capitalized banks on the planet.
Our team has spent hundreds of hours meeting with banks, opening accounts, and collecting first-hand experiences in Singapore…
We did this because Singapore is one of the best banking jurisdictions in the world.
If Singapore is not on your radar, it should be.
But banking in Singapore isn’t easy. And given how great of a destination Singapore is for banking, it should be no surprise how difficult it can be to find and get accepted by the right bank.
This is because banks in Singapore can afford to pick and choose who they accept. They run a tight operation and only want the best clients.
GlobalBanks Insiders have instant access to our Singapore Banking Report, which you can access when you sign up for GlobalBanks Insider access.
Georgia isn’t “offshore” but it isn’t really “onshore” either. It has a decent reputation. It isn’t a tax haven. It’s not an offshore financial center. And it’s not on any greylists or blacklists… at least not yet.
To date, Georgia hasn’t had any highly publicized money laundering scandals like Estonia, Latvia, or Malta. Georgian banks also aren’t in constant danger of losing their correspondent banking relationships (CBRs) like their Caribbean counterparts.
So there’s no negative stigma attached to banking in Georgia. In fact, most people couldn’t locate Georgia on a map. So, Georgia is still very much under the radar and doesn’t have to worry about the problems that many banks in offshore hubs tend to face. For this reason, we like to consider Georgia more of a “mid-shore” jurisdiction.
In recent years, the government implemented favorable tax rates, investment incentives, and an easy visa program to attract foreigners. Hence, what inspired digital nomads and the internationalization crowd to flock here in the first place.
In fact, according to the World Bank in 2019, Georgia ranks #7 in the world for “ease of doing business”, beating the UK, Australia, Canada, Germany, and the UAE.
And while Georgia is attracting a lot of foreigners for banking, it’s not because they necessarily want to bank in Georgia. It’s more so that banking elsewhere has become incredibly difficult and expensive.
With this in mind, one major reason why Georgian banks are attractive is that they accept just about anyone.
If you compare account opening in Georgia to Singapore or Hong Kong – it’s a dream. And, the likelihood that you will walk out with an active bank account as a non-resident is much higher.
GlobalBanks Insiders get immediate access to our Georgia Non-Resident Banking Report, which includes strategies for opening accounts in Georgia remotely without the need for an introducer or middleman.
Panama banks are pretty well managed, invest conservatively, and don’t engage in the same mind-bending lending practices that their U.S. or European counterparts love.
And on top of that, Panama isn’t some shady back-water “offshore jurisdiction.” Despite what Hollywood and regulators would have you believe, Panama is a beautiful country to visit.
As a jurisdiction that deals exclusively in USD, the entire banking sector and economy are dependent on their USD correspondent banking relationships.
In other words, if Panama banks don’t behave and upset US regulators, their ability to send and receive money disappears and the economy falls into a deep freeze.
But for the past five years, the challenge with Panama was getting an account open. Most people failed because they went to the wrong bankers, went to the wrong branches, couldn’t produce the right paperwork, or accidentally freaked out compliance departments.
But now, our team has found that certain Panama bankers at a small number of Panama banks have seriously stepped up their game.
Now, in addition to being a USD based economy and a 2-hour flight from Miami, Panama is showing signs that it might be on the verge of becoming the next great banking hub… at least in the Americas.
Don’t get us wrong, there are still a ton of hoops to jump through. And if you don’t know which banks (and bankers) to approach, you won’t get an account.
But, if you have that information handy, it can be a straightforward account opening process that can deliver a useful bank account in USD.
The best way to start opening accounts in Panama is by using the Panama Offshore Banking Report as soon as you sign up to GlobalBanks Insider.
This might seem like a shocking inclusion given our focus on finding safe banks. But the truth is, banking is also about utility and having the best banking portfolio possible. And for many people outside of the United States, it is one of the best offshore banking hubs for a range of different reasons.
Now, that said, most US banks have horrible financials. And we wouldn’t recommend keeping your life savings there. But if you need a good transactional banking in USD, the US can be extremely beneficial.
Not to mention, the US boasts one of the most well-connected financial systems in the world. As a customer of a US bank, that means fast, efficient, and cost-effective banking. And that in itself can be a huge benefit, depending on the volume and value of transactions you send each month.
This means that US banks don’t share information about non-resident account holders with tax authorities in their respective home countries because the US hasn’t signed on to the Common Reporting Standards (CRS).
To open an account you will have to show up in person in the US. But to make that trip worthwhile, you need to make sure you’re targeting the right banks, branches, and bankers and using the right strategies. Otherwise you risk rejection, leaving the US account-less, and be forced to make a second trip!
To learn more you can get started become a GlobalBanks Insider and get everything you need to know about opening US bank accounts in our US Banking Report.
As a foreigner, you’d probably never consider banking in Syria or Niger, so any shortcomings in their banking sector will never affect you.
In fact, most countries aren’t contenders for your money because they have too many problems – lack of banking infrastructure, rampant corruption, conflict, etc.
However, there are other countries that are very well-known in the offshore world but, for one reason or another, aren’t safe choices for your money right now.
Belize has been a ‘quick and dirty’ banking solution for solopreneurs, digital nomads, and non-residents for ages.
For many people, Belize banks were a godsend. With lax KYC, they would happily open accounts remotely for just about anybody. Think: offshore companies from BVI, Seychelles, or Marshall Islands – with no real business, no minimum deposit, and no presence in Belize.
For years, Belize banks offered privacy, easy remote opening, and access to USD accounts outside of the United States.
Why? Belize has had a catastrophic loss of correspondent banking relationships, thanks to de-risking. This has destabilized the local financial sector.
On top of that, Belize has a poor reputation in the banking community. Banks here also have poor financials and local banking regulations are weak. But now, they are losing correspondent banking relationships left and right, which is a huge risk to depositors.
After all, banks anywhere that lack correspondent bank relationships are effectively useless. But, an entire country that correspondent banks perceive as “too risky” to deal with? That’s a systemic problem.
In conclusion, wait until the country’s banks have stable correspondent banks in place before opening an offshore bank account in Belize.
South Africa is in the midst of political and economic crisis. There’s unrest and violence. It’s currency, the Rand, is plummeting and unpredictable. And, the country also imposes exchange controls, along with many other restrictions.
Once money arrives in South Africa, it may be difficult to get out.
For the time being, South Africans and expats can still use legal channels to move money out of South Africa within certain thresholds… but only if they meet the criteria and get the necessary approval first.
Until things change, we recommend avoiding opening a bank account in South Africa. If you already have accounts there, make plans to diversify internationally in case the situation gets worse.
Banking in Lebanon used to be seen as a status symbol. It was home to some solid banks that offered customers stability (and banking secrecy) in a shaky part of the world.
But banking in Lebanon is changing. In Beirut, banks recently shutdown for two-weeks in October 2019. They cut off access to customer accounts and blocked any transactions, claiming it was due to protests across the city.
Following the shutdown, banks imposed controls on the movement of money. For instance, some banks imposed withdrawal limits on their customers at US $300 per week and only allowed outbound transfers in US dollar for “emergencies”.
The country is in the middle of an economic crisis. If you put your money in, there’s no guarantee that you’ll get your money out. So, for the time being, avoid banking here.
In 2018, ABLV, the third-largest bank in Latvia collapsed after the US government’s Financial Crimes Enforcement Network (FinCEN) said that ABLV was a “primary money laundering concern.”
That notice triggered a run on the bank and set off a chain reaction.
Now, Latvian banking system will never be the same.
Banks have been forced to adopt stricter rules, making it much more difficult for non-residents to open accounts. For the country’s banks that previously dependent on non-resident money, this is painful.
Today, Latvia is still under the microscope, reeling from banking scandals and massive compliance failures.
The stability and staying power of country’s banks is unpredictable, as they are forced to adopt new policies and undergo sweeping changes.
Given that it only takes a single notice from the US government to make a Latvian bank to implode, we recommend exercising caution and waiting for the dust to settle before opening an account here, especially as a non-resident or foreign company.
There are of course many other considerations when choosing a banking jurisdiction besides compliance. Some of the considerations include economic, political, and regulatory concerns. You need to consider these factors when determining which banking jurisdiction is best.
Below are some of the specific drivers that make a country good or bad for banking. We’ll look at this section from the perspective of depositors.
This includes high-level financial and economic considerations. But we’ll also look at local currency risks, economic risks, and political issues that can impact banking.
Ideally, you want to bank in a stable jurisdiction that isn’t plagued with corruption, conflict, and exchange controls. That’s a given.
But there are several other factors that are often overlooked, such as the size of the economy relative to the banking sector.
In fact, many offshore financial centers are small countries with large banking sectors. This is the case in countries like Panama and Andorra, Mauritius, and many island nations.
For instance, if there were a financial crisis, the government would not be able to bail out the banks as the banking sector is larger than the GDP. This means that the country would need help from international agencies or would rely on bail-in legislation.
We talked about bail-ins above. But in case you’re not familiar with the term, it means depositors would lose a portion of their deposits in exchange for worthless bank stock. So, if you’re a depositor, banking in a country with bail-in legislation is not seen as a positive.
Additionally, if a country is overly reliant on the banking sector, that’s also a negative. Without a diversified economy, countries can be more vulnerable to pressure from foreign governments and outside forces who threaten the country’s financial sector.
For instance, the U.S. and others could easily pressure or threaten a banking-heavy country with sanctions, inclusion on watch-lists, withdrawal of correspondent banking relationships, and a variety of other tools. And that’s a serious risk factor. Just look at what happened in Andorra, Latvia, and even Danske in Estonia.
When you’re thinking about banking in a particular country, you need to make sure it has healthy financials. After all, you’re putting your personal wealth within their borders.
Key financial indicators of a country will ultimately dictate how safe your money will be.
These include GDP, Debt-to-GDP, unemployment rates, inflation, interest rates, and the local currency.
Also take a look at the central bank, if the country has one. Like any bank, you need to make sure it’s solvent. To do this, you can follow the same guidelines that we shared above to determine if a bank is safe.
This is especially important if you’re considering opening accounts in countries that have a history of bank failures. Likewise, this is important in developing economies.
One of the greatest risks when banking internationally is a country’s politics.
Before choosing a bank and opening an account you need to familiarize yourself with the country’s political system. That includes understanding related risks and how changes to politics could impact your money.
But you can’t just look domestically. Look at the surrounding region as well. Sometimes there are regional conflicts, unrest, and systemic problems that negatively impact your target country.
But political risk isn’t just about war, border conflicts, or legislation. It also includes everything from taxes to exchange controls, currency devaluations, and beyond.
Needless to say, political risks can have a real impact on the business environment and the stability of the banking sector. So do your homework and get comfortable with a country’s potential political risk factors before banking there.
Inflows of refugees, armed conflict, and border disputes are all very real risks. And these risks exist in different parts of the world, including banking hubs.
These risks can have a very serious impact on a country’s banking sector as well as the stability of it’s banks.
For example, many digital nomads and entrepreneurs have been opening accounts in Georgia. And, it’s become a popular banking hub for internationally-minded young people. And, it’s no wonder. Georgia offers a lot of benefits for anyone interested in banking there.
Ten years ago, Georgia was in direct military conflict with Russia. And to this day, they still have disputed territory between them. Now, while that conflict has subsided, there are other risks that still remain.
Russian influence in Georgia is real. And that extends to the banking sector. But knowing how to spot those risks is key. Ensuring you’re not banking with a high-risk bank is key to protecting your money.
You can do this by assessing the banks opening policies and the kind of clients the bank is trying to attract. It’s also helpful to confirm the banks correspondent relationships to ensure your money is secure.
Insiders can read more about banking in Georgia in the Georgia Banking Report. You can access it in the Intelligence Reports section of the website.
If you bank in a risk-prone region you need to be aware of the risks.
If you’re a GlobalBanks Insider, use the Intelligence Reports to stay on top of regional risks (and unique opportunities). And before you open accounts, check the bank profiles in the GlobalBanks Database.
All banks are not created equal. And they vary dramatically in quality. For this reason, choosing a country is just as important as choosing the right bank.
But banks can also be a window into a country. And if you find that banks in a particular country have low reputations, be careful. This can include very lax compliance and horrible financials.
For instance, how “easy” it is to actually start a bank in the country?
In other words, if anyone can set up their own bank for the cost of a small condo in Florida – the quality of the banks that set up shop there is probably very low.
For example, setting up a bank in St. Vincent & Grenadines or Puerto Rico costs as little as $300,000. On top of that, maintenance costs are a fraction of what they are in major banking hubs.
While ease and low costs might be attractive if you’re setting up your own financial institutions, that’s not a great indicator of quality.
It’s no surprise then that countries with low capital requirements for setting up banks are often home to low quality banks. And low quality banks typically have lax compliance and poor reputations.
It’s also important to understand the jurisdiction’s stance on compliance. Ultimately, this means determining if they’re keeping up with international standards.
If regulatory enforcement is weak and penalties for bad behavior are low, this can be a sign of bigger issues.
For example, if every bank in the country has lax compliance, it’s not a great sign. It typically means that account opening is abnormally easy.
Now, easy account opening isn’t the worst thing. But these practices are common at banks with poor financials that are desperate to attract new depositors.
And it often means that regulators aren’t forcing their banks to adhere to international standards for compliance (KYC, AML, CDD, CFT, etc).
And, from there, it’s only a matter of time until international authorities start cracking down. This will result in more pressure local regulators. Which will impact the banks themselves through correspondent banks.
This can result in serious headaches for you or your account later on. For instance, your money could be frozen for an indefinite period of time or your account could be shut down entirely.
If you’ve already tried to open an offshore bank account, you’ve probably come across a slew of bank introducers and middlemen.
They offer to help you or your company open bank accounts. Perhaps you’ve even paid one of them for their services.
What are their services? Well, usually they profess to be able to introduce you to a bank. Sometimes they’ll proclaim to have “special relationships” and the ability to get you “pre-approved”.
But, in reality they don’t have any special relationships and there is no such thing as “pre-approval” from an introducer. Instead, all they’re doing is emailing the bank and getting the bank’s application form. Then, they’ll ask you to fill it out, and sending it back to the bank.
You’re still going to be required to answer questions. And you still need to provide the same documents and go into the branch (if required).
The truth is, with sweeping changes made to banking compliance over the past five years, introducers and their services are being phased out.
This is because banks are now legally obligated to “know their customers.” This means they need to be dealing with you directly.
Introductions do not guarantee that you’ll get an account open.
In most cases, service providers know whether you will get an account open before you apply. They can do this by considering your basic client profile.
In fact, all the introducer has to do is look at your details. Such things as your nationality, residency, and corporate structure. They might also consider the products or services you sell. And then, they’ll know if you’re a good fit for a bank.
Yet, introducers continue to sell introduction services anyway.
Typically, if you choose to pay an introducer for bank introductions, you will get one of two outcomes:
You realize that you could have opened the account all by yourself. No introducer required. This means that the bank never required an “introduction” in the first place. The introducer just lied and told you that the bank requires an introduction. Why? So they could make some money off of you.
There’s a rule of thumb that applies to most banks. 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 seen many service providers offer introduction services. But, this isn’t necessary. In our Georgia Non-Resident Banking Report we explain how you can open accounts without any introducer or middlemen. We also explain how, in some instances, you can even open accounts remotely, all by yourself.
You discover that you now have an expensive bank account at a low-quality bank. What’s worse is that you can’t even use it. The fees are high and the bank charges you for everything. Customer service is horrible. And, the bank doesn’t have the services that you need. Meaning you can’t even transact affordably or run your business efficiently.
This is the bread and butter of the bank introduction business.
Some introducers will target low-caliber banks in undesirable jurisdiction. Others might target better banks in a higher-quality jurisdiction. Such places include the US, Singapore, UK, Switzerland, Austria, etc.
But, the denominator is always the same: none of these banks actually require an “introduction” to open an account.
On the rare occasion that a bank does require an introduction, banks will reject international service providers. They will typically only deal with introducers that have a local license. Two such places where this is true are Mauritius and the Isle of Man.
But even then, you can still find banks in these countries that will open accounts without an introducer. You just need to know where to look and what to do.
In either case, you paid for a service that you didn’t need. And, you probably paid a very high price. Usually between $500-$4500. It’s also worth noting that when you close the account, you might pay a hefty closing fee as well.
If you’re already a GlobalBanks Insider you can get started opening accounts right now. Access the Insider Library and the Bank Database located inside the GlobalBanks platform.
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