The Trouble With Offshore Banking
You should have an account with an offshore bank. That’s a fundamental step in any plan for diversifying offshore.
How do you choose where to open your first (or subsequent) offshore bank account? Don’t try to base the decision on customer service, because, the sad truth is, finding a financial institution with consistently good customer service is virtually impossible anywhere in the world.
One exception I’ve found is the U.S. financial house Schwab. I’ve had an account with Schwab for a decade, and I’ve yet to have a bad experience as their customer. Questions are answered and problems are resolved efficiently and cheerfully.
This has not been the case with any other bank I’ve worked with during the past 20 years.
What should you be looking for in a bank, including an offshore bank where you’re considering opening an account? Automation.
You want a bank that lets you do as much as possible yourself.
What To Look For In An Offshore Bank
Specifically, you want a bank that allows you to initiate wire transfers online. You also want to be able to check account balances and to transfer funds among accounts (if you have more than one at the bank) online. If you’re going to have multiple accounts, entity and/or personal, confirm that you can have them all under the same login so you don’t have to remember multiple user IDs and passwords (and so you can transfer funds directly among the accounts).
The less you have to interact with bank personnel the better. Human beings slow things down and make mistakes.
In the good ol’ days, when you opened an account with a bank, you were assigned a banker who knew you and who knew your accounts. You could contact your banker directly and get things done with some level of reliability. Today, unless you have a big balance or are banking at a small local bank, you aren’t going to have a dedicated banker. You’ll have to speak with whoever answers the phone. Better to use the Internet.
Of course, sometimes, you can’t avoid having to interact with a human. One of my banks changed their online systems recently. The three accounts I had at this bank were all tied together for online access. With the new system, the bank broke out each account and assigned it its own user ID. I had no choice but to call to speak with a human to ask how to reconnect my three accounts. The answer? I couldn’t. Now I have to log in three times if I want to check all three accounts, and I can’t make transfers among the accounts online anymore.
Why do I put up with disappointing service from most every bank I deal with? Because, first, in my now extensive experience, when it comes to banks, service is bad all over. Not much point, frankly, moving to a new bank simply for better service. You likely won’t get it.
Plus, moving isn’t easy. Opening a bank account offshore is more difficult all the time. My mantra now is, once you have an account, keep it. Frustrating customer service notwithstanding.
“Lief, thanks so much for your article on second passports. It is all I was really looking for. This article sums it up neatly. But I still don’t quite understand the mechanics of traveling with a second passport. How does it work?
“Let’s say I fly to Rome in order to visit my Italian relatives. On arrival from the United States, do I present my Austrian passport? Then when I return to the States, I use my U.S. passport? Doesn’t that look strange and raise some suspicion? I’m flying in from Europe, but my passport does not reflect a single foreign entry (or at least no European stamps).
“Anyway, Lief, thanks once again. I truly appreciate that you have directly addressed my question. In fact, I appreciate that you take the time to actually read your mail. While I wish you every success in your business ventures, I hope you will always find the time to personally review at least some of the letters sent your way. While your service is quite unique (if you have any direct competitors, I have no idea who they might be), I think your personal attention to your readers is indeed something that sets your service apart from most any that are or that attempt to be similar.”
If you have a U.S. passport, you must use it every time you enter the United States.
Also, you must leave any country using the same passport you used to enter that country. If you use your Austrian passport to enter Italy, then you must use it when you leave.
That’s about all there is to the practical implications of having more than one passport.