How to open an offshore
company bank account

Opening closed doors

Getting through the door is a question of having the right answers. So find a banker whose test you can pass.

OFFSHORE-FOX.COM
with Peter Widder

(Part 2 of 3)

Many are perplexed to discover that the opening of a bank account for their offshore company -- an act they believed to be both legal and straightforward -- proves full of obstacles. It remains legal, but it is no longer straightforward.

However unwarranted and duplicitous the hysteria of recent times, you have to remember that the stringent requirements are here to stay -- so learn to live with them.

Money launderers come prepared for scrutiny. It is those who approach a bank in good faith that will get offended and angry upon realising that they must first prove their honest intentions.

A few simply give up and let their offshore company -- and their freedom -- gather dust on a shelf. Do not be one of them.

Choice of offshore bank

Bankers are in a difficult position. On the one hand, they have to consider their obligations under local money laundering law; on the other, they wish to serve their customers' needs.

These two diametrically opposing forces have created a number of competing teams on the offshore field. We might go as far as to say that there is a league table with three major divisions:

• Some banks are so paranoid and slavish that they are best avoided by all save those with a keen interest in interrogation techniques.
• A fair number of banks view the pressure brought to bear on them with a healthy degree of scepticism.
• A yet smaller number of banks openly flaunt the law in a bid to attract deposits.

The last group, not surprisingly, also attracts trouble -- not from major money launderers (they go elsewhere), but from opportunistic rogues who can bring banks into disrepute when their schemes end.

Choose a bank that treads the middle road; responsible scepticism is the quality that you need to find.

Purpose of your offshore company
and its bank account

Whichever bank you choose, it is of vital importance that you fully explain the purpose of your offshore company and the use to which its account will be put.

"Know Your Customer" means exactly that : your banker needs to know who you are and, more specifically, what you intend to do with your other legal persona -- your offshore company. What is its bank account purpose? What is the source of funds deposited?

Understand your banker's position, and come prepared to explain your intentions. If you do not, you will be politely shown the door; banks have a long list of convenient excuses ready to use with "undesirable" clients.

Looking surprised and unsure when quizzed is suspect. It is, however, very common, as offshore incorporation agents do not care to tutor their clients in this form of diplomacy. In short, be honest and direct, but choose your words with care. Think of it as a courtship: the words that you use are of paramount importance if you are to enjoy a mutually happy relationship.

Many clients are quite uneasy at discussing tax avoidance with a bank official. Do not be; remember, your offshore banker has no wish nor any legal obligation to act as a collector of revenue for overseas governments.