How Much Money Do I Need to Open an Offshore Bank Account?

If you want to consider opening an offshore bank account, the cost that you are going to incur is certainly an important issue to think about. Some people do not have a clear idea of what costs are involved in setting up an account in an offshore bank. Banking offshore brings numerous advantages but an offshore bank account does not come for free in most cases.

Let us discuss what you will (or may) have to pay for when opening an offshore bank account.

How much does a non-resident bank account cost? Some misconceptions

An offshore bank account (or a foreign bank account, which is the same) is a legal financial instrument that allows performing the following tasks, among others:

• Diversify your capital;
• Extend your investment portfolio;
• Protect your assets.

Offshore bank accounts can be opened with other goals in mind too but the thing is that some investors underestimate the costs that the process involves.

You have to realize that offshore banking can be rather different from the banking traditions that you can find in Europe or other onshore jurisdictions. The requirements to prospective clients can be dissimilar as well as the amounts of the initial deposits and the security balance.

You have to read the information on the bank’s website attentively and listen to your agent’s advice carefully if you want to avoid unpleasant surprises. You don’t want the cost of setting up an offshore bank account to overweigh the advantages that it brings.

To make things even worse, the Internet carries a lot of deceptive information about opening offshore bank accounts. Many intermediaries and agents worry only about earning some money and they don’t go into much detail when discussing the costs of foreign bank account opening with their clients. They may well be aware of the costs but they fear losing the client and so they don’t reveal the whole story to them.

The cost of opening an account in an offshore bank

The items of expenditure can be divided into four groups:  

1. Intermediary’s services (not obligatory but desirable);
2. Account opening costs;
3. Non-banking costs of administrative and technical character;
4. Account maintenance costs.

Please note that we are discussing only general costs involved in setting up an offshore bank account here. Every bank will have its own tariffs and every situation has to be treated individually. Please contact us to find out more information on each foreign bank.

The cost of opening an account in an offshore bank: Intermediary’s services

With modern communication technologies, you could contact an offshore bank in any country directly. Practice shows, however, that hiring an intermediary would be a better idea. With professional assistance, you can save time, effort, and money when setting up an account with an offshore bank. Preparing the application document package can be a challenging task but you can also face other difficulties if you decide to apply for banking services on your own. The difficulties include the following ones:

• Some offshore banks require that the prospective client pay a personal visit to the bank office to open an account. This means that you will have to pay for the visa to the country and cover your travel and accommodation costs.
• Talking to the bank manager also requires considerable time and besides, you have to be well prepared for the talk. Otherwise, banking services may be denied to you.
• If your application documents have to be translated into the language spoken in the country where the bank is located, you will have to cover the costs of translation. Besides, the translations need to be notarized, which will cost you money too.
• Filling out the application forms can be a tricky business too. If you make a mistake, your application will be turned down, and you will have to fill out the forms again, and submit them again, and go to the bank office again, and so on.
• Different banks have different requirements to prospective clients. If you expect that the offshore bank of your choice is going to treat you the way you are used to being treated by banks in your home country, you may be mistaken.
• If banking services are denied to you, you will have to start the process all over again. This will mean that all your efforts, time, and money have been simply wasted.

Account opening costs

The cost of opening an offshore bank account has grown recently but it hasn’t become unaffordable anyway. What is more, there are banks that require no security balance at all and they charge nothing for opening an account for you. They count on earning something on the commissions that you will have to pay when making transactions. 

Banking services have become more costly over the last few years for the following main reasons:

• The financial information exchange regulations have toughened.
• The KYC and AML requirements have toughened;
• The control over offshore banks on the part of international monetary regulators has toughened.

The application processing fee usually varies between US$ 150 and US$ 2,000. In addition to that, you will have to incur the following costs when setting up an offshore bank account:

• Notary services, translation, document authentication, and apostille;
• Visa, travel, accommodation – if you choose to pay a personal visit to the offshore bank (which you don’t have to do because we can help you set up a bank account in a foreign country without leaving the comfort of your home);
• If you want to send the application documents to the bank, you will have to cover the cost of the courier’s services because relying on the regular mail would be unwise; 
• In some countries, you have to acquire a personal tax number before you can open a bank account there.

Non-banking costs associated with opening an offshore bank account

Depending on the country where the bank is located and on the internal regulations, you may have to incur some additional costs that are not directly related to opening a bank account. These costs include the following ones:

• A registered address may be required in some countries where you would like to open a bank account. This is the case in the European Union, for example. The bank needs your address in the country to send official documents and bank cards there. 
• A telephone number and a local SIM card. It may be required for the bank to activate your account and provide mobile banking services to you. You may face the following issues when applying for banking services in a foreign country:
  • The SIM card that you have acquired at home may be dysfunctional when you go abroad;
  • The bank administration may be unable to contact you on your phone number from another country;
  • You may be unable to put money on your debit card when you are outside the country where the bank is located.
• Postal costs. If the bank has to send some documents to you by regular mail or with a courier, you will have to cover the costs because the bank will not in most cases.
• Taxes. This is an issue that many people often overlook. You have to dig deep into the tax consequences that will arise when you open a bank account in a foreign country.

Account maintenance costs

You have to realize that you will have to make regular payments for using your offshore bank account. The account maintenance costs include the following fees and commissions:

• Monthly account maintenance fees can be anywhere between US$ 0 and US$ 1,000 or even more;
• Commissions are charged for outgoing payments in most cases;
• Currency conversion fees;
• Inactive account fees;
• Account closure fees, and so on.

You have to find out about all the fees and commission that the offshore bank is going to charge you before you apply for account opening. Any foreign bank account will cost you something and you have to find out how much exactly it is going to cost beforehand. 

How much money do you need to open an offshore bank account?

Setting up an account with a foreign bank is always going to come at a price. If a bank charges nothing for processing your application documents, you should expect to be paying more in commissions. If the monthly account maintenance fee is comparatively high, you should expect to be able to make fast and secure transactions.

Much will also depend on what purposes you are going to use your offshore bank account for. A business account, for example, will always come at a higher price that a personal account. A bank account for a high-risk company will cost more than an account for a low-risk company, and so on. Whatever goals you have in mind, will be happy to assist you in setting up an offshore bank account of the type that you need.

Offshore bank account opportunities that we offer:

• Opening bank accounts for offshore-registered companies, trusts, and high-risk businesses;
• Opening a personal account in a foreign bank without paying a visit to the bank office;
• Remote account opening with payment systems and neobanks;
• Merchant, trading, and brokerage accounts with foreign banks;
• Offshore bank accounts under external management, and many other banking products.

We provide a wide range of offshore services. Please contact us and request a consultation on the issue of interest to you. We always reply promptly!