Choosing banking jurisdiction
There are more than 200 countries providing banking services worldwide. We are specializing
in some of them, particularly located in Europe. There are many criteria that customers evaluate
when choosing offshore bank. Listed below are some of them:
Safety. People put money offshore for using it again when necessary and safety is one
of the main criteria when choosing the offshore bank. There are several risks related to safety
of assets in the bank:
- Country/region risk. When clients have a look at the history, they can easily see that
some countries and regions are having a perpetual development for hundreds of years. These are
politically stable and wealthy countries with some unique preconditions, wise and consistent
foreign policy, democratic political system and good legislative basis. The best example here
would be Switzerland, which is a safe place for keeping offshore assets for more than 300 years.
Located in the center of Europe, it hasn't been substantially involved in political conflicts
and wars for more than hundred years (the country was neutral during both WWI and WWII). Of
course, when choosing such a jurisdiction clients should pay a premium for enjoying the top
safety. Even without Internet banking system, with high minimum deposit requirements, the bank
account opening in this jurisdiction takes the most money, time and energy and there is no
guarantee the customer will be accepted by the bank.
When selecting the country the main safety questions could be:
* is this country located in stable and prosperous region of the world;
* does the country have a stable economy, stable financial system and stable currency;
* is this country recognized by other countries, (the country shouldn't necessarily be a member
of some alliance, however it shouldn't live in economical or political isolation as well);
* is there good banking legislation in place or this is a country where everybody having money
can establish his 'pocket' bank and attract deposits from third parties;
* is there good and effective control over the banks in the country?
- Bank risk. Even located within the same jurisdiction and regulated by the same banking
laws, there are more safe and less safe banks. It's not a rule but usually banks with larger
capital, well-diversified and balanced assets, good reputation and loyal customers tend to be
safer. Of course, checking various ratios (related to capital adequacy, liquidity, currency
risks etc.) does make sense but then person should either be a specialist in banking industry or
one should hire a specialist. We are working with various banks - even the biggest ones in the
country and also with medium ones, having more specialized and individual approach to
customer's needs. However we do not work with banks if we have doubts on their financial
condition and stability.
Privacy. This is one of the reasons why people go offshore. In people's minds privacy
is one of the cornerstones of banking industry. Bank shouldn't make the information on the amount
of money the client has deposited to the bank account, the number of banking transactions he/she
has made, the names of his/her contractors etc. publicly available. If a person is a businessman
- his/her banking transactions are a part of his/her know-how and his/her rivals by knowing this
information can easily gain unfair advantage. If a person is a wealthy individual, by knowing
his/her bank account information somebody could start thinking how to get wealthier at the expense
of this person.
From one hand, bank shouldn't reveal customer's banking information, however in every country
there is some list of exceptions which is a set of cases when the information covered by
banking secrecy for some customer could be disclosed to some authority. These are usually
requests from Courts, Prosecution offices, in many countries also from the local tax authorities
etc. As a rule, the closer the bank is located to the customer, the more exceptions are applied.
Any good offshore bank discloses the information only in the exceptional cases of very serious
criminal proceedings and only after a written request of competent authorities (usually Central
Prosecution office of the country the bank is located in). These cases are related to money
laundering - drug trafficking, weapons, terrorism and similar and are usually regulated by
International law. Also there could be some special treaties between countries on less serious
breaches and if the customer's country has a special treaty with bank's country, this offshore
bank becomes more similar to the local bank of customer's country of residence.
There are also some exotic offshore banking jurisdictions with very extreme privacy laws,
indirectly allowing legalizing the proceedings even of terrorist activities, however these
countries and banks are in international isolation. We do not work with such jurisdictions and
will not discuss these aspects in more details.
The countries and banks we are working with have very good banking secrecy laws providing top
banking secrecy for the person involved in legal business. Criminal proceedings are instituted
against a banker disclosing customer's information in extralegal cases and these cases can lead
Prestige. By prestige we do not mean that you should be proud you have a bank
account in the country 'A' as far as people usually do not advertise their offshore accounts.
However in some cases prestige plays a role. Some business partners could refuse to pay you to
some extraordinary bank located in some unknown country. It is good to have an
offshore bank account
in a reputable financial center, in a country that could be easily found on map and that
is recognized by other countries (especially by countries which will be involved in financial
transactions with the bank account).
One of the most prestigeous jurisdictions for bank account opening is Switzerland as far as Swiss banking is the symbol of stability and confidentiality.
The article making any breach of banking secrecy a criminal offence leading to up-to-six-month imprisonment or fines up to Sfr.50,000. - or both, was introduced into the law of Switzerland in 1934. It is worth mentioning that this decision was a political act which served to show independence and neutrality of Federal assembly.
However, it is quite a good solution to open the offshore bank account in tax havens like the Seychelles within banks having superior reputation like Barclays Bank in the Seychelles.
When opening a corporate bank account for an offshore company, a detailed personal and business information from the owners and controllers of the offshore account will be required by any reputable bank.