In this post, we take a step back and look at things we should do before we open the bank account. But why?
It's necessary to start off on the right foot
We have our concerns with regard to how people approach offshore banking account and company formation:
- We believe that because going offshore is deemed as “shady” by the media, people who want to take their assets offshore are doing so for the wrong reasons.
- People learn that opening an offshore bank account is easy – and some of them think that evading taxes is easy. Well, it is easy, but – again – people are doing so for the wrong reasons.
- We simply appalled to the fact that some offshore agencies' ads and articles found when you Google for it pitches “it only takes 10 minutes to open an account; super easy.” This is misleading and gives International corporate services a bad name.
In reality, while it's true that opening an offshore bank account can be done fairly quickly, what you see is just the tip of the Iceberg. What's underneath it is a big, murky unknowns and misunderstandings – and answering as many questions as possible before you actually open an account is what making your effort in going offshore legal or illegal, effective or ineffective, and – in the end – help you or harm you.
Three things to do before opening an offshore bank account
We have identified three main things you should do before you start the process of opening an offshore bank account. Let's say that this is the first step, ellaborated.
1. Choose jurisdiction candidates
Your first and foremost thing to do is to do a preliminary research on offshore jurisdictions. Today, information is at your finger tip. So, use the available tools to find for information on offshore jurisdictions.
Gather as many information as possible on everything related to offshore company formation, as well as on the jurisdictions – the laws and regulations regarding banking for foreigners, etc.
Take note, bookmark or collect everything that you've found. Create a comparison on jurisdictions that you want, whenever possible.
2. Consult with your trusted lawyer
Perhaps the number one mistake someone can make when going offshore with his/her asset protection is not contacting a lawyer who is trusted and well-versed in International tax laws. If you made such mistake, stop what you're doing right now in the process and take a step back; find a lawyer and consult your situation.
The reason why consulting with a lawyer is crucial is this very fact: No offshore jurisdictions are created equal. Every jurisdiction has its own rules and regulations. Let alone understanding the offshore jurisdiction' laws, it's already very confusing trying to understand your home country's laws.
During your consultation, you'll usually discover hard facts that might conflict to what you're going to achieve with your offshore asset protection plan. In essence, if you're doing it wrong, you may end up breaking the law and facing a hefty penalty, even getting arrested.
3. DIY or use an agent's service?
By now, you must've had all information that you need – the revised information on offshore jurisdictions after you consult with a lawyer, the options that you have and a plan. Next up, you need to decide whether you want to DIY the whole process or use an offshore service provider.
There is no right or wrong answer for this, but let's cover a brief pros-and-cons on each.
- Pros: It practically eliminates the service fees.
- Cons: You have to do everything yourself – contacting the banks on your list, filling in forms and wait for approval.
Hiring a specialist
- Pros: It's very convenient. Furthermore, there are offshore banks that only open accounts for clients introduced by reputable service providers.
- Cons: There's a fee involved in opening an account, ranging from a few hundreds of dollar to a few thousands of dollar, depending on the level of services that you require (e.g. Opening a bank account and forming a company.)
Eventually, the decision boils down to this: If you have the time and sufficient reputation, it's quite easy to open an account on your own. However, if you don't have either or both, it's probably best for you to used a corporate service provider's help. The choice is yours.
At ICO Services, not only we can help you with the whole process of opening a bank account, but we can also advise you with “insider info” on the offshore jurisdictions of your choice.