Offshore Banking in the UK is a bit of a misnomer. While it is possible for non-residents to bank in the UK (especially in private banking), offshore banking in the UK is found… offshore.
Just a short 60-minute flight from London, and you can find three of the top offshore banking jurisdictions in existence today: the Crown Dependencies of Jersey, Guernsey, and the Isle of Man.
While these three little island territories are not part of the UK. Instead, they are territories for which the UK is responsible. This makes the Crown Dependencies unique when compared to the British Overseas Territories (BOTs), which are constitutionally tied to the UK.
Of course, BOTs can present interesting offshore banking options as well. In fact, these territories include some of the most popular offshore banking hubs today, including the Cayman Islands, Bermuda, British Virgin Islands, Anguilla, and Gibraltar.
In this article, we’ll explore both categories of offshore banking in the UK: the Crown Dependencies and the British Overseas Territories. This will include an overview of the banking options, the types of clients each territory caters to, and how you can start opening accounts today.
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The City of London is entirely responsible for the offshore banking industry in the Crown Dependencies and BOTs. In fact, if it wasn’t for the City, many of these islands would still be rural agricultural outposts, or maybe territories of Amsterdam or the US instead.
It all started when the City expanded in the mid-1900s. That’s when London bankers established financial centers in the Caribbean, Indian Ocean, and even closer to home in the Irish Sea and the English Channel.
In fact, it’s no stretch of the imagination to say that the entire offshore financial system was engineered and steered from the beating heart of UK finance, London — though historically, the City would deny such influence.
Then, after Britain proved it’s model for offshore finance, other nations such as the Netherlands, France, and the US began to mimic their efforts. This created a global network of offshore banking and corporate registration that ushered in a new world of tax efficiency, asset protection, and high finance.
Today, many of the “benefits” that originally attracted people to these islands (e.g., tax evasion, anonymous companies, banking secrecy, and more), no longer exist. This is the direct result of banking secrecy being torn to shreds, the introduction of information sharing agreements (e.g., FATCA, CRS, AEOI), the global obsession with public registries (thanks to the Panama Papers scandal), and stiffer regulations around the world.
But, don’t worry, offshore banking through the UK (and its territories) still offers plenty of opportunities. In fact, clients with the right information can still protect their assets, increase tax efficiencies, and even obtain second passports… all from an offshore bank account. The question is, how do you choose where to open accounts?
Today, despite their historical and constitutional ties, the territories that make up the Crown Dependencies and BOTs compete directly with one another. They compete to attract banks, professional service providers, law firms, investment funds, insurance behemoths, multinationals, trusts, and of course, customers for all of the above. These are the essential ingredients that keep their island economies humming.
Of course, certain islands have carved out key areas of expertise, insulating them from direct competition. For example…
Cayman has developed a knack for attracting bank booking centers and major hedge funds. This has resulted in it becoming the fifth largest banking sector in the world. Today, Cayman has over US 1.9 trillion in deposits.
The British Virgin Islands has become the company registration jurisdiction of choice for the offshore world. Currently, BVI accounts for over 400,000 companies.
And then you have, Anguilla — the lowest cost option for corporate registration.
Of course, there are many other offshore banking options in UK territories to consider, and there’s more to Cayman, BVI, and Anguilla than their deposits, companies registered, or cost.
So, to help answer the question “where should I open a bank account?” we’ll look at each of the offshore satellites below — and share some insights on where they excel and where they fail. For more detailed information or direct introductions to banks, click here to get access to GlobalBanks Insider.
Guernsey’s financial services industry caters to wealth management, trusts and foundations, insurance companies, funds, and bond issuers.
Not surprisingly, most local service providers focus on financial services and various facets of trust administration and management, corporate formation, structuring, investment advisory, captive insurance entities, and related services.
Thanks to Guernsey’s low taxes, beneficial laws, clean image, and high concentration of specialized financial services, it’s a popular jurisdiction for institutional investors and individuals with significant wealth.
Today, there are over 20,000 trusts registered in Guernsey, 30% of Europe’s junk bonds are issued here, and Guernsey is an important launching pad for companies planning to list on the London Stock Exchange. So, there’s a lot happening.
When it comes to banking, Guernsey is a destination for private banking and wealth management services for high net worth individuals (HNWI), ultra-high net worth individuals (UHNWI), their businesses, and wealth planning vehicles.
In some cases, it’s possible to access certain non-resident and expat banking services, ranging from standard international bank accounts and wealth management to international mortgages for property in the UK. However, banks are selective, so choosing the right place to apply is critical.
Overall, Guernsey offshore banking is a good fit for those in higher wealth brackets willing to make larger deposits. It’s also a useful hub for Guernsey-administered entities and those using the island’s financial services. Of course, people and companies who have ties (or assets) in or connected to the UK can also bank here.
To learn more about Offshore Banking in the UK via Guernsey, check out our Guernsey Offshore Banking Article by clicking here.
The Isle of Man is often seen as the more cost-effective offshore banking option among the Crown Dependencies. That’s because some Isle of Man banks are easier to access and allow lower deposits than those banks in Guernsey or Jersey.
That said, it can still be challenging to open offshore accounts in the Isle of Man if you don’t have the right client profile. Likewise, not taking bank selection seriously can be a major issue. Choosing the wrong bank can result in lost time, money, and a lot of frustration.
The Isle of Man is best suited to non-residents and expats living outside of their home countries. It can also be an option for UK nationals and those with UK ties. For these groups, the Isle of Man can offer stable banking in a first-world jurisdiction. Plus it has far less stigma than banking in the Caribbean.
Of course, there are other important variables you need to consider. And, opening an Isle of Man bank account isn’t available to everyone. But if you have the right information, contacts, and know which banks to approach, opening offshore bank accounts here 100% remotely is entirely possible.
To learn more about Offshore Banking in the UK via the Isle of Man, check out our Isle of Man Offshore Banking Article by clicking here.
When it comes to non-resident and expat banking, Jersey is often seen as a halfway point between the Isle of Man and Guernsey — at least when it comes to deposit requirements.
If you can muster a £25,000 GBP deposit, Jersey could be worth considering. If you plan on depositing less, you may want to consider the Isle of Man instead.
Alternatively, if you’re interested in depositing significantly more, all three islands will have options available. The best choice will boil down to whether you plan on banking personally or through a structure such as a trust, company, or foundation, and what services you need.
If you’re interested in opening a Jersey bank account, bank and banker selection are critical. Knowing which bank is best suited for your specific client profile is key. This is important since not all banks are interested in dealing with non-residents, offshore companies, and transactional banking.
To learn more about Offshore Banking in the UK via Jersey, read our Jersey Offshore Banking Article by clicking here.
Many of the other islands on this list started establishing themselves as major players in the offshore world between the 1960s and 1980s. But not Anguilla. Anguilla was drowning in conflicts, political unrest, and busy fighting off coups. In fact, the country didn’t even achieve independence until 1982.
So, Anguilla was very late to the offshore game…
How does this impact offshore banking in Anguilla? Well, all of the other countries on this list had a 15 to 20-year head start. For example, when Cayman was being called the “Geneva of the Caribbean”, most people didn’t even know Anguilla was a county.
So, it’s no surprise that Anguilla’s offshore service industry is under-developed and banking options are limited. So, if you’re in need of offshore banking, there are better options elsewhere.
The one thing Anguilla does have going for it are its strong British ties. But, without any niche or specialization to sell, Anguilla remains a lower-priced company formation hub.
For this reason, if you’re considering Anguilla for offshore banking, consider other options first.
Bermuda is one of the most reputable offshore financial centers in the world today. So, it’s no surprise that many people look to Bermuda for offshore banking. However, for most people, Bermuda isn’t the best choice.
That’s because Bermuda caters to multinationals, insurance companies, listed entities, trusts, and other companies used for wealth management. So, not surprisingly, banks in Bermuda tend to favor opening accounts for these entities.
Of course, there are some banking options available for non-residents and foreign companies. But these tend to require higher minimum deposits, higher annual turnover and cater to individuals interested in wealth management.
In other words, offshore banking options in Bermuda are limited when compared to the other territories covered in this article. For this reason, most individuals look to Bermuda for structuring, 100-year trusts and forming exempted companies before opening accounts.
If you want more information on opening accounts in Bermuda for yourself, a trust, or a company, you can join GlobalBanks Insider and get direct access to our team to support your needs by clicking here.
While the British Virgin Islands (BVI) are synonymous with the offshore world, they actually have very little to do with offshore banking and finance. In fact, less than 1% of offshore financial activities pass through banks in the British Virgin Islands.
Instead, this tiny Caribbean nation is internationally known for corporate registration, offshore companies, and its private company registry. In other words, the ownership of companies in the BVI is a private matter… that is until the public registry comes into effect in 2023.
That said, there are a few banks in the British Virgin Islands that do offer offshore banking. Not surprisingly, this includes a few of the regional players that exist in other parts of the Caribbean as well — with some exceptions.
In most cases, when considering offshore banking in the UK territories mentioned in this article, you’ll find better options outside BVI. And, if you have a BVI company and are struggling to open an account, it’s worth noting that there are viable options available in other top banking hubs.
To learn more about banking for BVI companies, read our article on How to Find the Best Bank Account for a BVI Company by clicking here.
Cayman is one of the most important international banking hubs in the world. It has deep roots in offshore finance and acts as an extension of the City of London’s offshore network.
Cayman is the world’s fifth-largest financial center, home to 75% of all the world’s hedge funds, and has US $674 billion on deposit — not bad for a country of less than 60,000 people.
Like most of the territories mentioned in this article, the benefits of an offshore bank account in the Cayman Islands include strong asset management and wealth management.
But, there is one major difference between Cayman and other jurisdictions: it’s very difficult to get in.
Cayman Islands banks now require (and strongly enforce) existing ties to the country. That means you (or your company) require clear and demonstrable ties to the Cayman Islands. Of course, exceptions are possible and ties can be acquired. Though in some cases, banks and bankers may be willing to accommodate looser ties than others depending on your profile.
Prospective clients should expect to deposit at least US $50,000 to $100,000 when opening an offshore account here. But, amounts vary and ultimately depend on the bank and banker you approach for account opening.
To learn more about Offshore Banking in the UK via the Cayman Islands, read our Cayman Islands Offshore Banking Article by clicking here.
Finally, we come to Gibraltar. Now, in the world of offshore banking, Gibraltar seems to have faded into the background over the last few years. And, there’s a good reason for that, which we’ll share below.
But first, it’s worth noting that Gibraltar is best known for its non-resident companies. A lesser-known benefit is that Gibraltar is a territorial tax jurisdiction… in Europe. Additionally, it can lead to UK citizenship. Meaning it offers a safe and stable place to live and bank.
So, it’s no surprise that banks in Gibraltar specialize in private banking and wealth management services. That means they cater to high net worth individuals, non-residents, companies, and trusts. Of course, part of the attraction to Gibraltar is that it offers a solid reputation. It also doesn’t suffer from tax haven stigma anymore.
Unfortunately, Gibraltar is becoming significantly more difficult to access for non-residents looking to open offshore bank accounts. That is unless you’re looking to open a mid-six-figure account with one of the available private banking options.
Those looking for transactional banking in Gibraltar will either need ties or a Gibraltar-registered entity. And, those willing to consider banking alternatives can also consider Gibraltar based fintech or licensed e-money institutions (or EMIs).
That said, if you’re taking your first step into offshore banking, don’t have any ties to the UK or Gibraltar, and are looking to make a deposit below £500,000, you may want to consider one of the other options listed above or another jurisdiction for offshore banking purposes.
To learn more about Offshore Banking in the UK via Gibraltar, read our latest Gibraltar Offshore Banking Article by clicking here.
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