Offshore Business Bank Account – Opening Services

For businesses, opening offshore bank accounts is an overlooked option. We tend to associate offshore jurisdictions with tax evasion, conducting shady business, and alike. And the stigma used to be true: companies would move funds to countries where no one could check their statements, so one could avoid taxation. But we have come a long way since these days. Complete bank secrecy is close to non-existent today. The OECD has implemented the Tax Information Exchange Agreements and the strong states and institutions have pressured offshore countries to take part in it. The financial institutions in the tax havens changed their standards. They used to open an account for whoever came at them with a bit of cash to save. Nowadays, entrance conditions are set and some kind of businesses or suspicious companies will often get turned away. To be able and open a proper offshore bank account one will need to understand how to present the business model in a proper light, and have certain internal documents in place.

Why open a bank account offshore for my company?

Unlike a popular belief, it is still an attractive option in many cases. There are no such things as “too many bank accounts”, especially within financial institutions that are working with all the main currencies in the world. Many possible use cases for an account opened in an offshore jurisdiction:

• receiving and sending payment from and to countries that are not accessible from your domestic account;
• get a corporate and merchant account for a high-risk activity;
• serve as a “before-tax” pocket to spread the income to the relevant entities of a multi-entity corporation;
• arbitrage the fees for sending and receiving money;
• opening an account for a company set in a country where you are not residing, and where the banks do not want to work with a non-resident company;
• protection of your assets;
• a possibility to safeguard your money in case an account gets closed.

No setbacks and many potential benefits.

Can anyone open an offshore account?

We will be speaking here only about corporate, sometimes also called offshore business bank accounts – not personal offshore bank accounts.

In simple terms, any company globally may be eligible to open an account in an offshore bank. It all depends on the policy and risk appetite of the offshore bank. If you already have a company set up, the probability is high that your entity will be eligible to open an offshore account. There are other elements to be considered when thinking about eligibility and the probability of an account being granted:

• The shareholder nationality;
• The corporate structure of the entity – the simpler, the better;
• The underlying business model – high-risk bank accounts are possible but more expensive;
• Whether your business model requires regulation or not;
• Who your clients are (B2B and/or B2C) and where they are located (geographically).

Offshore banks will probably never ask this directly, but one of the main questions they would like to get answered is: “What is the relevant business reason for your company to open an account in an Offshore Bank?”, implying that it would be easier for you to be banked in the same jurisdiction as your company is set-up. This is an old way of thinking and a slowly changing stigma in the FinTech world. It is normal to live in one country, have a company in another jurisdiction, and have a bank account in a third country.

Theoretically the question “Why an offshore bank account?” is a legitimate one, since usually, if we follow through a simple example of an Estonian company looking for an offshore bank account as an alternative to its EU bank account. Answers to that question could be vastly different from case to case: A company in Estonia may have partners and a license in the BVIs, Belize, Africa in general, or f.e. the Cayman Islands, and therefore has the need to offer its clients a faster and more convenient way to pay and get paid if compared to an EU bank account.

In which offshore country should I open an account?

When it comes to company formation, offshore jurisdictions are competing to provide the best corporate services to non-resident investors and entrepreneurs. The best thing to do is always to question an advisor, such as our experts at LegalBison. All of our specialists have a minimum of 7-8 years of experience in corporate services. Do not hesitate to send a request. So why should you open a Seychelles bank account for example? It is cheap, quick, and easy to do. You can be provided with a working solution with minimal involvement of time and money, so you can operate in the best delays. But what if you were concerned about stability and reputation? Then you may open a Belize bank account. It might be more expensive and take a little bit longer, but then you benefit from the very solid financial system of Belize. What if I need to buy assets and receive clients’ contributions for my newly registered fund? You might want to look into a Mauritius bank account. Mauritius is one of the main financial centers of Africa. Their financial institutions are used to manage investment matters and to deal with different kinds of assets.