Upon formation of a company or trust usually one of the first requirements is to establish a bank account.
Offshore Banking Background
Many traditional offshore banking centres have developed into highly reputable and regulated international banking centres with unrivalled technical expertise. The level of regulation and investor protection is often equivalent or indeed greater than many onshore centres.
Most leading banking group have firmly established operations offshore, providing services specifically geared towards the international and offshore community. A host of reputable private banks, which boast a long history of providing attentive personal financial services, continue to operate in offshore banking centres, with discreet and often very complex banking products available.
The History of Offshore Banking
According to a number of sources, offshore banking can be traced back to 1815 in Switzerland, when the neutrality of the country was first established during the Vienna Congress. Other sources state that offshore banking first originated in France’s Channel Islands.
Offshore banking was developed as a way for people to safely and efficiently keep their growing assets. The first offshore banks can be traced back to Switzerland, the Channel Islands and Vienna. As demand for secure banking practices and sound financial regulation grew, so too did the availability of offshore banking institutions offering sophisticated services.
At the beginning of the 20th century, offshore banking increased in popularity, spreading from Europe to the rest of the world. This resulted in the evolution of a greater number of offshore jurisdictions, particularly within economically sound and politically stable countries.
During the course of the 21st century, restrictions have tightened and today there are numerous steps an investor must take prior to opening an offshore bank account. Many banking centres, including the City of London, have evolved from elite banking centres into cornerstones of global finance.
Following the 2013 EU Economic and Financial Affairs Council directive, bankers in the EU member states were required to conform to additional authority requests to ensure utmost compliance. Today, this directive is applicable to many major global economies, including the United States and Australia.
Since their inception, offshore financial institutions have maintained a notable reputation for safeguarding the wealth of international investors from the financial regulations present in their country of domicile. Offshore banking centres have become increasingly sophisticated, while the requirements in place to conform to authority requests are becoming increasingly stringent, thus reducing the likelihood of tax evasion and fraud.
Benefits of Offshore Banking
Today, individuals working overseas benefit significantly from setting up an offshore bank account. What’s more, many of these benefits cannot be found in your regular domestic banking system.
For example, an offshore bank account is a superb way to diversify your wealth across different channels, accounts and currencies, thus helping to protect your wealth, ensure financial security and reduce the risk of being unprepared in the event of an economic collapse, currency depreciation or bank failure.
Offshore banking is also an excellent form of asset protection, offering a great way to ensure your future financial longevity. What’s more, you also benefit from the heightened stability of economic and politically stable countries.
Further benefits include a safe banking system with sound economic policies, high levels of security, higher interest rates, and higher returns on international investment. Banking offshore also reduces risk, augments your financial freedom, increases your flexibility and protects your assets.
With an offshore bank account, you can send money home and receive a number of incentives not offered by your domestic account. Thanks to advancements in technology and improvements in regulations, traditional barriers are being collapsed in place of more inclusive, flexible approaches across the board.
Choosing an Offshore Banking Jurisdiction
Over the years, numerous locations across the globe have evolved into reputable and sophisticated offshore jurisdictions.
While Switzerland remains an incredibly popular offshore jurisdiction amongst countless investors, there are plenty of other independent jurisdictions to choose from across the globe, many of which provide equally safe and secure measures for the safeguarding of your wealth.
Choosing a jurisdiction depends on your personal preferences and financial requirements, but is something that can be done relatively quickly. Your ultimate choice will vary depending on your individual circumstances and prerequisites.
Every offshore bank and international jurisdiction has its own regulations and requirements. Since each jurisdiction is unique in terms of its pros and cons, it’s important to assess what each jurisdiction offers, before finding one that fits your needs.
At Chesterfield, our team of specialists will support you in choosing an offshore banking jurisdiction and bank account that meets your unique requirements.
Once a decision has been reached as to the most appropriate jurisdiction and banking group to use, then there is usually a substantial amount of information required for bank application mandates and compliance.
It is not unusual for normal banking arrangements to take one to two weeks to become operational. In the case of complex arrangements, the processing time may take a little longer.
In order to open an offshore bank account, you will need to provide relevant documentation, including your proof of identity, along with other documentation as requested by your specific selected bank. Banks may also require information pertaining to the source of your deposits.
Once your account is set up, you’ll be able to access your account using the debit card provided. You’ll also have the option of making wire transfers.
Offshore banking is now a modern business and technology such as e-banking has assisted in the speed and accuracy of services provided.
Many offshore banks provide:
- Online banking services
- Cheque books
- Term deposits
- Letters of Credit
- Investment Bonds
- Portfolio management
- International multi-currency transfers
- International mortgages
- International multi-currency loans
- Credit and Debit cards
- Business Consultancy services
- Trust accounts
- Pension schemes
Chesterfield provide a vast array of banking and banking-related services to its managed companies and trusts.
Contact Chesterfield to discuss your needs with a member of our team.