How To Open An Offshore Bank Account

With the rise of internet technologies creating an offshore bank account has never been easier. Gone are the days when one needed actually visit the offshore bank in person to set up an account. With a few clicks of a mouse on a website clients can gain access to all of the banking services they need with absolute privacy and security.

Three basic steps have to be completed, in order to open an offshore bank account:

1. Research and Select an Offshore Bank or Offshore Services Company

This step is of course the hardest part of the process as there are many variables to consider. Is the offshore jurisdiction stable, are the banking secrecy laws strong, how much is the vendor charging for an account, what are the fees one can expect to incur operating an account among others.

To pick a suitable option, it is advisable to prepare a list of favorable offshore banks and companies. Better yet, prepare a comparison table - List the bank names and service companies (in rows) and features / benefits offered (in columns). This will help you decide on one desirable option.

Associated Costs

If you are satisfied with basic features and benefits, your best bet is to pick a vendor which will cost you less.

Privacy and Stability

An offshore bank's reliability is determined by how trustworthy the banking laws are in the jurisdiction where it resides. It is recommended that you do your due diligence - find out the location and age of the bank and the local laws governing banking privacy.

Make sure to find a bank in a stable political environment. Stable governments help to keep investor trust which in turn further adds to the credibility of the banks in that jurisdiction.

Not every offshore bank account is created equally. Many offshore jurisdictions have made drastic changes to their banking secrecy laws in the post 9/11 world. While many banks claim to respect your privacy they will turn over your details to authorities who ask for it.

Benefits of Offshore Bank Accounts

Research the local interest rates that banks in the jurisdiction you are interested in offer on deposits. Many will offer better rates than the banks in your own country in addition to the privacy and secrecy benefits they offer.

Consult an Expert

Offshore banking and asset protection can be a costly endeavor and using a lawyer or expert is definitely an additional cost. You need to weigh these costs with the potential risks that can arise from improper bank account setup. An offshore banking expert will have local contacts and relationships which they have built up with experience in the field. Use this experience to ensure you are making the right moves -- in the end this cost will actually save you money.

2. Understanding the Bank's Requirements

Each offshore bank has its own set of different requirements that you need to fulfill to be able to open an account there. Many offshore banks have a few of the below mentioned requirements in common.

a. Identity proof - Name, Address, Contact information, Passport#.

b. Political Stability - Some offshore banks won't accept you if you happen to be a resident in a country that is politically unstable.

c) Minimum Balance - Many offshore banks require that a specific minimum balance be maintained in the account. Some also require that you make a term deposit.

3. Apply for the Account

Before applying for an account make sure you have all of the requirements fulfilled and the necessary funds to pay for the account setup, lawyer / intermediary fees, minimum balance deposit and money to support the ongoing account costs. By now you should have narrowed the field of choice down to a jurisdiction and a bank account vendor.