What Country Should You Choose to Open an Offshore Bank Account There?
The banking world has changed dramatically over the recent years. The new rules that banks have to live by are much tougher today than they used to be before. The international community is putting great effort into solving two tasks. One of these tasks is benign and perfectly justified while the other one is not so much.
The international financial regulators are combating money laundering. There are two sides to the money-laundering issue. First, criminals who obtain their capitals in unlawful ways need to legalize the money before they can use it. This is reproachable but it’s not yet terrible. What is terrible is the use of illegally earned money to finance terrorists. All decent people are behind those agencies that combat terrorism financing and there can be no questions about that.
However, the big and powerful states pursue one more goal by issuing strict banking regulations and this goal is a little more questionable. They maintain that people from rich countries use offshore banks to evade taxes. They call it ‘evade taxes’ while the truth is that offshore banks were used by some people to avoid paying too much in taxes. Their home countries (the rich countries) charge quite a lot in taxes and offshore banks used to offer legal opportunities to save on taxes a bit.
Now look at the situation from the rich country’s Government point of view. ‘My citizens are paying taxes in other countries. That means that they are underpaying me! I will not tolerate that!’ That is a big part of the thinking behind the de-offshorization campaign that was launched a couple decades ago. International financial regulators impose tough rules on banks all around the world making them disclose their clients’ information to fiscal authorities of their home countries. The tougher the rules are, the easier it is for the big and powerful to combat ‘tax evasion’. This goal is not so benign anymore because the agencies that are pursuing it are driven by plain greed.
This said, however, there are still some attractive banking opportunities available in certain foreign countries. Below we will discuss several national states and territories that can be referred to as the best countries for offshore banking. We use the word ‘best’ but you have to realize that each country or territory can be the best one only in a certain respect. In other words, it will offer the best opportunities in a certain sphere while some other country may well outperform it in another sphere. Thus, we will point out both the pluses and minuses that each country has when it comes to banking there.
Singapore is probably the best Asian country to bank. Hong Kong also has a very strong banking sector but unlike Hong Kong, Singapore is an independent country. Small but independent. In 2023, only Luxembourg is expected to have a higher GDP per capita than Singapore is. So it’s an extremely rich country and banking in an economically strong national state is beneficial without any doubt.
Singapore is a financial center in the region and the country enjoys a spotless reputation in the international market. When Singapore gained independence in 1959, the country was overridden with corruption but today it’s a totally different state. There is literally no corruption in the present-day Singapore and everything that is done there is legal and transparent.
The country has been ranking high for the ease of doing business over many years. It offers superb business infrastructure and fantastic investment opportunities. The quality of banking services is also very high in Singapore and three banks based in Singapore are listed among the safest banks in the world.
What difficulties can you run into if you choose to open a foreign bank account in Singapore? Well, you’d better become a legal resident in the country, which will greatly facilitate opening a bank account there. Obtaining residency in Singapore is quite feasible, so it’s not a big deal.
The Cayman Islands
The Cayman Islands is a banking center of the world. You will find around 200 banks there including branch offices of the highest-ranking banks headquartered in other countries. So you have a wide choice of banks if you want to set up an account in the Caymans. Besides, the territory is a tax haven, as many experts will claim. (We use the word ‘territory’ rather than ‘country’ because the Cayman Islands is a British overseas territory.) The fact that the taxes are extremely low in the Caymans attracts a great number of foreign investors who put money in local banks or create hedge funds there.
However, opening a bank account in the Caymans can be a challenging and time-consuming task. Besides, since recently, the local banks have been forced to disclose their clients’ information to official government agencies on their request. But this requirement is applicable to whatever country you choose to open a foreign bank account. Banking secrecy is gone. Full stop.
You can open a foreign bank account online if you choose to bank in Nevis. Many countries (including Singapore that we have mentioned above) do not provide remote bank account opening opportunities while Nevis does as well as a few more offshore jurisdictions such as Dominica and St Lucia, for example.
Nevis is best known for the asset protection mechanisms that it offers to foreign investors registering trusts and business companies on the island. This may sound strange but the small island that is not even an independent state (it is part of the Federation of St Kitts and Nevis) has been able to resist the pressure that the OECD and other international organizations are applying to all offshore jurisdictions. The prototypical foreign investor will register a company in Nevis and open a corporate bank account there. On the other hand, reputation is clearly an issue for Nevis.
There are many other jurisdictions where you can open an offshore bank account and enjoy certain benefits that you can never find in your home country.