Technology has enabled faster, cheaper and more convenient delivery of a wide range of services. And, it has enabled offshore banks to offer an enhanced bouquet of services to a much wider international clientele base. For you, that would mean being able to open an offshore bank account from the comfort of your home. Lets look at how:
Meet eligibility criteria
These are fairly simple:
▪Age – You may need to be 18 years or older or 21 years or older (this may vary from bank to bank or from jurisdiction to jurisdiction).
▪Money – You will need to have a certain amount under deposit or a certain amount as “assets under management”. This will usually be in the range of around USD 10,000. Certain accounts may require significantly more and some premium accounts may have minimum requirements that range in the millions (in USD or equivalent).
▪Residency – You may be required to be resident in a particular jurisdiction or your particular residential jurisdiction may be excluded. This may not be explicitly communicated.
For instance, since the Foreign Account Tax Compliance Act (FATCA) came into effect from 01st July 2014 in the United States, a number of offshore banks are either raising account minimums for US customers to $1 million or more to keep up with increased record-keeping costs or are trying to purge US accounts from their portfolios.
Submit documentary evidences
Many offshore banks now do not mandate your personal presence for opening an account or transacting on your account. However, you will be required to establish your bonafides through documents. Documentary requirements may vary based on whether you wish to open an individual or a business account. If you are an individual you may have to submit the following documents:
▪ A photo identification like a passport, a driver’s license or an identification issued by a governmental agency.
▪ To establish proof of address, utility bills or similar documents. This is important since address directly impacts taxation issues.
▪ Income proof (pay slips)
▪ Financial reference documents (bank statements for 6-12 months)
▪ Source of funds documents (sales contracts, insurance payouts, certificate from an estate executor certifying inheritance etc)
▪ You may also have to explain the nature of transactions expected to happen on your account.
▪ These documents can be scanned and sent through email or photocopies taken and sent by mail along with a filled-in application form.
These requirements may seem intrusive but are required to comply with recent anti-terrorism and anti-money-laundering regulations.
Banks may sometimes require additional assurance of a document’s authenticity. This may be established through notarized copies of documents. Another way to establish documentary authenticity is via an “apostille” stamp. An apostille is a certificate that is attached to a document to ensure its acceptance when used overseas.
Apostilles enjoy legal acceptance amongst countries that have signed the Apostille Section of the Hague convention of 1961. To obtain an apostille certification you may need to visit the governmental agency in your country that is authorized to issue this stamp.
Fund your account
There are not many ways in which you can fund an offshore account.
▪ International wire transfers seem to be the way out but may be subject to foreign exchange charges and commission fees.
▪ Domestic cheques may not be accepted internationally.
▪ If you have a domestic account with a global major like Citibank or HSBC you could transfer money free of charge between your domestic and offshore accounts.
A few offshore bank accounts examined
▪ Global Online Account from Digital Bank, Citibank International Personal Bank (IPB), Singapore
It provides you with a single platform that is accessible anytime, anywhere, to manage your savings, investments and trading transactions. You need to be 21 years old and above. This account is not available to Corporate, Power-of-Attorney and In-Trust-For accounts. You will need to maintain a minimum average balance of USD 10,000 or equivalent in your account.
▪ Offshore Current Account from Barclays International
Open to permanent residents of Jersey, Guernsey or Isle of Man or those who live or work in Gibraltar and who are over 18 years of age, this account has a minimum requirement of £25,000 or more. You can bank in Euros, Sterling or US Dollars. You will be given a Visa Debit Card that can be used worldwide, credit card options and you can open multiple accounts for multiple currencies.
▪ Santander Gold Account from Santander Private Banking, Jersey
With a minimum requirement of £50,000 and a minimum opening balance of £5,000 it allows you to earn interest on a tiered basis linked to the amount on deposit. This account is available in Euros, US Dollars and Sterling. It also gives you a Visa deferred-debit card linked to your gold account with which you can earn interest on money you’ve already spent for up to 30 days.