Choosing banking services
Services. What offshore banking services are you looking for? What are you going to do
with your bank account?
- Offshore investments. Some offshore banking jurisdictions are oriented mainly to
keeping clients' money for a long time and building their wealth by managing their assets, placing
them to different investment programs and instruments in accordance with your risk/earning
instructions. Such banks providing private banking and assets management services will require
their clients to keep substantial account balances and usually will not allow to make active
business transactions by means of various restrictions including high outgoing/incoming
transaction fees. Swiss bank account is a typical example here. When looking for jurisdiction and
bank for offshore investment services, one should consider also the tax consequences. Some
investments can be heavily taxed however others are not. For example, if you someone is opening the
bank account offshore and then investing back in the stockmarket located in the country of his
residence ? it is more likely that he will be asked to declare whether he is a taxpayer of this
particular country or he is not and he will have to pay the same taxes as investing directly
through the bank in the country of his residence. Therefore it makes sense consulting with a tax
adviser or with the bank providing client with private banking service for finding the best
investment products especially for this particular client. Another example of taking into
consideration the tax issue is the fact that interest earnings in many countries are taxable.
If you put money on the term deposit offshore ? for example in Switzerland, you can be taxed on
35% from the interest earnings in accordance with their local tax laws. Therefore in these
jurisdictions it makes sense using the fiduciary deposit service when deposits are held by the
same bank (in our example Swiss bank) outside bank?s country and are not taxed in accordance with
local tax laws.
- Offshore business transactions. People having offshore business need bank accounts for
receiving money for products/services sold and for making payments for products/services received.
If a person has such a business he/she would look for the bank with good online banking system,
with incoming/outgoing wire transfer services, check deposit services, documentary operations,
availability of the bank account in different currencies, currency exchange services, ATM/debit
cards etc. Before applying for the account, it is necessary to list all the banking services
needed and to check whether they are available in the bank where the bank account will be opened.
It is very important to describe one's banking needs in as many details as possible, as far as
there are different banking traditions in different countries and what is an everyday service in
the country of one's residence could be something extraordinary in some other country and vice
For corporate offshore account opening it is necessary to make a decision on offshore company registration and administration. The choice of a resident agent is very important. Lately, the Seychelles has been a very popular jurisdiction for International Business Company formation. Seychelles IBC can be incorporated quickly and all the necessary additional documents can be arranged in due course as far as the Seychelles government pays great attention to this business. Documents are processed electronically, offshore service providers in the Seychelles are regulated very strictly.
Costs. Another important point is banking fees. If you are planning mainly to keep money
on the account, it is more important to explore the account maintenance fees. There could be
monthly or annual fees for bank account, ATM/debit card or Internet banking, fees for inactivity
or fees for low account balance. If clients are going to make active transactions it is very
important for them to explore the banking fees for various transactions they will use. Transactions
can be fixed, or there can be a percentage of the transaction volume with some minimum and some
maximum established. There could be different fees for transactions in different currencies. For
example, fee for wire transfer in EUR can differ from fee for wire transfer in USD, AUD or GBP.
Also there could be different fees for fast transaction execution. Some banks are differentiating
the speed of services and transaction with very low cost can be quite slow and for ?normal? speed of
the transaction it is required to pay much more. Another bank can indicate only one fee for
transaction that could seem quite high, however when it becomes possible to get to know its quality
and speed ? it becomes obvious it is a very reasonable price.
Individual approach. All the banks we are working with provide very good services. There
are also medium-size or even small banks among them. The small banks are especially valuable if
customer is looking for individual approach and his offshore account balance is not expected to be
with six or seven digits. Small banks provide individual approach to every customer, however bigger
banks having thousands of similar customers are going to provide good but more standard services to
everybody. Of course, there are also VIP customers within big banks, however the balance criteria
for VIP customer is proportional to bank?s size. If customer likes individual approach, sometimes
finding not so big bank having all the services needed would be the best solution.