Offshore banking is often associated with a high level of financial sophistication. However, the reality is that the average person can open an offshore bank account with just a few hours of work. (For related reading, also see Pros And Cons Of Offshore Investing.)
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Each offshore bank and foreign jurisdiction has its own requirements, so you’ll have to do some research to find the specifics relevant to your situation. The following is an overview of what you can expect, based on common offshore banking centers such as Switzerland, the Cayman Islands and the Channel Islands.
The Basic RequirementsThe basics of opening an offshore bank account are similar to opening a bank account in your home country. Offshore banks will ask for your personal information, such as your name, date of birth, address, citizenship and occupation.
To verify your personal information, you can expect to submit a copy of your passport, driver’s license or other identifying documents issued by a governmental agency. Additionally, banks are concerned with verifying your residence or physical address since this may affect taxation issues. This requirement may be satisfied by presenting a utility bill or similar documents.
Due to the wide range of different identification documents that may be presented to offshore banks, additional assurance of a document’s authenticity is often required. A notarized copy of certain documents may suffice in some cases. Other offshore centers prefer an “apostilles” stamp, which is a special type of certification mark that is used internationally. Where this is the case, you will need to visit the government office that is authorized to issue this stamp for your state or nation. (For a general overview, also see Taking A Look At Tax Havens.)
Additional Verification DocumentsIn offshore banking, there are often considerable additional requirements to open the account to which you may not be accustomed. These requirements are in place to discourage money laundering, tax fraud or other illegal activities that are often associated with offshore banking.
First, offshore banks may ask for financial reference documents from your current bank, indicating average balances and a “satisfactory relationship.” Most commonly, this is satisfied by bank statements for the last six to 12 months.
Second, many offshore banks ask about the nature of transactions expected to take place through the account. This may seem overly intrusive, but offshore banking centers have been under increasing pressure to stop illegal activity. For this purpose, many offshore banks want additional documentation, noting from where the money you are depositing in the bank is coming.
If your funds are from job income, a wage slip from your employer will likely suffice. To verify your investment income, an offshore bank may ask for information about your investments and where they are held.
How To Open And Access An Offshore Bank Account