What Banks Open Accounts for Offshore Companies?

An offshore company is a flexible instrument that can help you expand your international business, plan your wealth and succession. There are a number of benefits to be gained from operating offshore, but this is only possible if the financial transactions are carried out in a fast and timely manner. However, given the recent changes in policies aimed at combating the financing of terrorism and money laundering, opening bank accounts is becoming more and more challenging for foreign companies, especially when it comes to European jurisdictions. What banks open accounts for offshore companies? Is it possible for an offshore company without economic substance to open an account abroad? You will learn this and a lot more from this article.

What Is An Offshore Company?

Most people think that offshore business means offshore company. To put it simply, offshore means “anywhere other than the physical location of the person using the word,” or, it is something that is located abroad. 

In certain situations, an international company may be located in a highly regulated onshore jurisdiction with high taxes. For this reason, many large corporations use offshore companies for the following purposes:

• optimize the tax burden
• manage the risks
• improve confidentiality
• develop the corporate asset protection strategies
• accumulate corporate funds
• reduce the expenses
• promote investments
• enhance flexibility in using the banking products

In order to multiply the advantages of international companies, it is advisable to first consider your business goals:

• Would you like to access certain markets such as the European Union?
• Would you like to manage your personal/family capital?
• Would you like to consider the double taxation agreements regarding dividends, interest, royalties?

Successful development of business entities in practice is only possible with an active, working bank account. And this is where a number of issues arise, related to the processes and requirements to opening corporate accounts, because Due Diligence and KYC (Know Your Customer) procedures are rather complicated for an unprepared person acting on their own.

In addition to customer verification procedures, it is also important to choose the right jurisdiction and the bank that will be able to handle the necessary financial transactions for a particular foreign company. Therefore, selection of the bank and opening of a bank account for an offshore company is better performed together with the well-versed experts.

Why is the Choice of Jurisdiction So Important When Opening an Account Abroad?

It is hard enough to concentrate on doing business in a country that is unstable and uncertain. The jurisdiction you choose must be politically neutral, follow the free trade policy, not interfere with the commercial activities of corporations established in its territory, and provide reasonable guarantees of personal and corporate data security. Language, quality of communication, time zones, and professional infrastructure are also important.

Most popular jurisdictions have the legal system of Western countries. In order to take into account all the peculiarities and open an offshore bank account for your company in the right country, we recommend taking professional advice offered by the Offshore Pro Group experts. Moreover, this service is free. We offer using bank accounts open with the financial institutions adapted for the specific purposes and transactions of our clients. This is not just a mere selection of the right jurisdiction, this is about shaping the entire offshore banking strategy.

What banking services are available to the foreign companies?

• multicurrency accounts
• savings, investment, broker, trading accounts
• foreign currency trading
• letters of credit, guarantees
• trade in stocks, bonds, other securities
• loan products (credit cards, mortgage, overdrafts, leasing)
• crypto-currency operations
• online banking
• personal support
• SWIFT, SEPA international payments
• fixed-term deposits

However, in order to organize the right set of services for your company, it is important to clarify in advance the specialization of the financial institution. Each bank has a specific area of focus. For example, one is focused on providing services for saving and/or multiplying funds, the other deals with currency payments, the third bank is focused on operations with crypto-currency. In addition to the specialization, it is also important to consider the requirements imposed on a non-resident company.

Is It Possible to Open an Account with a European Bank for an Offshore Company with No Substance?

Transparency of the international policies has led to the fact that today it is more difficult for companies registered in classic offshore locations to open and maintain a bank account. And it all started with the introduction of a deoffshorization program launched by the OECD, IMF, and FATF. The purpose of this program is to strengthen the measures aimed at combating tax evasion, money laundering and terrorist financing.

In addition to the above, certain changes in the banking legislation have been implemented, new instruments of financial monitoring and compliance procedures have been introduced. A little later the CRS was introduced, which is the automated exchange of financial information among the fiscal authorities. All these changes finally put an end to the offshore companies’ anonymity.

Today the process of customer identification looks tougher than five years ago. Particular attention is paid to the verification of foreign companies and high-risk businesses. All these changes have led to the fact that European banks began turning down the offshore companies wishing to open a corporate account. Now EU banks require non-resident companies to have a substance.

Also, a common problem among the offshore and/or low-tax jurisdiction companies is the sudden impounding or closing of bank accounts. That is why business owners try to find various options that can exclude the stoppage of financial operations. 

And such an option today is registering a branch in Serbia, which is able to provide the company with a substance and allow further opening of accounts with European banks, including backup corporate accounts. 

What is the best location for opening an offshore company bank account?

There is no universal answer to this question. In order to provide the right answer, one should take into account a number of factors, namely:

• company’s operations
• residence of the company’s director/ultimate beneficiary
• nationality of persons related to the company
• geographic locations of the company’s contractors, suppliers, partners
• proximity of business to the specific regions of the world
• preparedness to provide the required financial reports and documents
• need for the specific banking services
• economic goals of future transactions

All these factors have an impact on the choice of a banking jurisdiction. Therefore, non-resident companies that need a fast-track procedure of opening a bank account paying minimum fees, as well as a variety of its features, could use our recommendation of taking a closer look at the offshore jurisdictions, such as Nevis, Cook Islands, St. Lucia, Dominica, Cyprus, Macedonia, Hong Kong, Kazakhstan.

Every jurisdiction that is offered as a financial solution can meet certain specific goals. However, an important factor in choosing a banking jurisdiction is making sure that the offshore company will be able to open an account in the country offering:

Banks that offer account opening to the international companies have all these advantages. Do not waste your valuable time and resources on finding the right solution yourselves. Please do not hesitate to contact the Offshore Pro Group experts using a special form.