My 6 Favorite Banking Jurisdictions
At last week’s Offshore Wealth Summit in Santo Domingo, my team and I looked at the best current options for planting your Five Flags, including your best choices today for alternative residency and for opening a bank account overseas.
Why might you want a bank account in another country?
Maybe because you’re planning to move to that country and need an account from which to pay your local bills…
Maybe because you’re intending to invest in a rental property in that country and need an account into which to receive your tenants’ rent payments and, again, from which to pay related expenses…
Maybe to support the start of a business overseas…
Perhaps because you don’t like the idea of your available cash sitting 100% in U.S. banks… or all in U.S. dollars…
Or perhaps because you’d like to diversify and expand your investment options.
Your reasons for needing or wanting a bank account in another country help determine where best to open the account.
If you’re intending to live or retire, either full- or part-time, in your chosen Shangri-la overseas, then, to state the obvious, that’s the place where you need a bank account. In this case, you’re talking about a personal operating account.
Same goes if you’re purchasing a rental property in another country. You’ll need a personal operating account to support that investment. If the investment you plan is in a business, then you may need a corporate account.
Things become less cut and dry when your agenda is to do with diversification of cash on hand, of currencies, or of your investment portfolio.
If an offshore bank account is part of your asset protection and diversification plan, here are variables to consider… ways offshore banks compete and distinguish themselves:
Required Minimum Investment
Some Swiss investment banks require minimum deposits of as much as US$1 million or more to open an account. That doesn’t work for everyone.
On the other hand, in Belize, for example, you can open an investment account with as little as US$1,000.
Ability To Move Money Remotely
This is a critical factor to remember not only when choosing where to open your offshore bank account but also with regards to your U.S. bank. You need to be able to move money from your U.S. account to your foreign account and vice versa from anywhere in the world. You don’t want to have to fly back home to Nebraska to initiate a wire of funds to your new bank in Colombia.
One U.S. bank in particular that we know does not allow the long-distance transfer of funds is Wells Fargo.
Increasingly, though, the ability to send a wire remotely is a service supported by banks worldwide. In addition to confirming that you will be able to move money without showing up in person at the bank, ask for details concerning the bank’s remote-wire security systems. Some banks use emailed passwords; others use fobs or security tokens.
Fees
One consequence of FATCA and the U.S.’s current anti-money-laundering crusade has been a steady increase in the cost of banking offshore. Banks worldwide are passing on the cost of compliance and increasingly onerous know-their-client requirements to their customers, meaning, depending on the bank, monthly fees, report fees, and rising wire fees.
Our top recommended offshore banking jurisdictions right now include:
- Andorra
- Belize
- Cayman Islands
- Cook Islands
- Panama
- Singapore
The Cayman Islands are notable for their 500 banks with a collective US$3 to US$4 trillion on deposit…
Lief Simon