Q&As about Opening an International Deposit Account with a Foreign Bank

Are you going to open an international deposit account with a foreign bank during the Pandemic-driven travel ban and other restrictions? If so, you are most likely in search of professional prompts from financial consultants and experienced clients. Here is our quick recap of the key aspects and answers.

Is the decision to open an international deposit abroad a sound strategy?  

An international bank deposit is an arrangement whereby you can place your assets in a foreign bank. Now that the world is trying to confront the accumulating political, economic, environmental uncertainties, there can be many reasons for individuals to deposit funds abroad:

• the desire to transfer assets to a more secure, more stable overseas location 
• hopes to take advantage of attractive deposit insurance offered by some foreign banks 
• intentions to acquire some property abroad
• the need to pay tuition fees to foreign educational institutions
• concerns and backup plans for taking care of the family and other loved ones who are far away
• other reasons.

To understand if an international deposit can be a sound strategy in your particular situation, you should analyze all the pros and cons.

What are the benefits of depositing into bank accounts abroad?

Anyone can open a deposit abroad. It is legal, and in some situations, the depositor can avoid double taxation.  However, one needs to be prepared for a detailed and lengthy compliance control in any foreign bank. As part of your application, you will have to submit a meaningful portfolio of documents confirming the legal origin of your funds and your trustworthiness. We’ve published many articles about the general requirements and procedures of opening foreign personal and corporate accounts. If you follow expert advice, consider smart insights,  and proceed in a step-by-step manner to your goal, the benefits of an overseas deposit will prevail:

• many countries and banks offer non-resident HNWIs very efficient incentives and services: some offer consumer bonuses to qualifying customers, many compete by developing customer-friendly mobile and online banking solutions, there is a growing trend of turning banks into marketplaces, and dozens of jurisdictions provide tax allowances and tax holidays to non-residents depositing their funds in offshore financial institutions. So, together with our experts, you can choose the right jurisdiction and the right bank that will accommodate your assets and provide higher stability, security, and support for your healthy ambitions 
• your international deposit is a key to effective diversification of assets in various currencies
• the offshore bank’s enhanced commitments  to banking secrecy and personal data protection (although with some reservations for TAFT AML/CFT international standards) make an obvious added value of holding an international deposit account abroad
• many national deposit insurance schemes and even regional provisions (such as the pan-European Deposit Guarantee Scheme) act as a safety net for bank account holders in case of bank failure. Thus, in Europe, every deposit is covered per depositor per bank, and the coverage of €100 000 (even up to €200,000 in some cases) applies to all aggregated accounts of one account holder at the same bank. Likewise, the coverage of $250,000 is provided if a deposit is opened in the USA. There are some restrictions too, so you should be sure of your right to qualify before you choose the jurisdiction and the bank
• as a holder of a foreign account, you can apply for loans abroad, and your chance of success is by 50% higher than before you place your assets on the international deposit.

More perks meeting your particular needs for the deposit arrangements, including some special offers and other possible opportunities, can be discovered during a private session with a professional expert. 

In what currency is it better to deposit money abroad on a non-resident personal account?

There cannot be any undisputed answer to this. For decades, USD has been considered the world reserve currency and the best currency investment. Almost all FOREX transactions have been made in US dollars. However, this year the dollar is falling, and it looks like the world is waving goodbye to its hegemony. Therefore, when signing up for a savings or checking account, you should compare the currency rates and keep track of the market dynamics.  

Whatever the post-pandemic world and the next normal are going to be, you should be guided by practical considerations. The decision to keep your assets in Euro,  Swiss franc, US dollar, other currencies, or in precious metals, needs to be justified by your planned use of international deposits across a particular region. 

What are the rates for opening and maintenance of deposit accounts overseas?

In European banks, the interest rate depends on the amount to be deposited. Most often, non-resident good-standing clients are offered to deposit money at 0.5%-2% per annum. The initial deposit required for opening a savings account starts at €10,000. Other important conditions apply.

Are there standard requirements and procedures for opening non-residents’ deposits abroad?

It’s a good question. The requirements are always bank-specific. But here is the most typical list of papers to be submitted by a non-resident applicant to any bank:

• a notarized copy of passport
• the proof of the legal origin of your funds 
• the proof of residence address
• a completed application clearly stating the purpose of opening an account, the projected balance, and the planned average turnover
• your bank’s statements of the current valid bank accounts for the last 6-12 months
• your recent CV should be available for prompt submission at the bank’s request
• references from your employer, bank, partners recommending you as a trustworthy client.

Apart from the above-listed documents, the bank may require some extra certificates. Please note that the best strategy is to be prepared to submit them promptly. That is why, you should take advantage of a free consultation with our expert. You should discuss all promising opportunities across several jurisdictions and foreign financial institutions – to be able to shortlist several favorable options. No doubt, expert advice will save you a lot of time on this intellectual journey. Besides, during a web-meeting with our colleague you are free to ask any relevant questions, including the most basic and the most professional ones. 

First, the sound expert advice and then the fee-based customized “HAND HOLDING DOOR TO DOOR SERVICE” is an important prerequisite for your success in opening an international account.

Can I open an international deposit account with a foreign bank remotely?

Yes, it is possible. The world is going digital, and many banking operations are performed online. However, to avoid fraud and loss of money, we recommend that you should rely on reputable consultants. Besides, for the very same reasons, most banks prefer to deal with non-resident clients via professional agents. You are welcome to refer to our experts focused on banking rules and procedures, application requirements, and online solutions.

How is the compliance control at foreign banks arranged?

Following the recent trends and commitments in international anti-money laundering policies, foreign banks have become particularly wary of their business reputation, risks, and publicity. So when you open a deposit, be prepared to undergo a thorough compliance control.

After a client submits documents, compliance officers examine the information in detail. They check their databases to detect any alarming or discouraging facts about the applicant and to define the risk level of onboarding the non-resident client. They may even collect information from publicly open sources (Internet, social networks).

How do the tax authorities treat foreign deposits?

The taxes payable by you in your home jurisdiction and the tax regime in the chosen jurisdiction needs to be considered by you. There may be requirements for notification of your home authorities about your opening an international account. Do not neglect the rules, and you’ll avoid unnecessary disputes and fines. You may trust other clients’ stories or your gut, yet a thorough pre-application study of the target jurisdiction and its taxes is a very important basis for your planning for the years ahead.

Why is expert support important when you are opening an international account?

The main takeaways from this article can be summed up in 4 words:

study – compare – choose – comply.

You need to make a well-justified choice of the jurisdiction, a well-balanced selection of the bank, consider and follow the requirements for the application portfolio, try to get a pre-approval from the recommended bank, get a crisis-proof plan B, and act accordingly. 

If you find the scope of the necessary research too discouraging, may we assure you that our Offshore Pro Group experts are ready to help you in every step you make on your way to your goal. They are the best in their own right, so you can rely on their judgments and guidance.

To book a FREE private session with our consultant on opening a foreign deposit account, please submit a clickable fillable booking form or contact us at the e-mail address given at the top of this page, or call/text us in messengers.