Offshore Banking Institutions

Recommended Offshore Banking Jurisdictions

The most financial advantageous Offshore banking jurisdictions for providing financial security, privacy, convenience and return upon investment are listed below, in order:

For initial deposits of over £100,000:

  • Switzerland
  • Luxembourg
  • Lichtenstein
  • Isle of Man

The Offshore Company UK specialises in offering offshore bank account setup in Switzerland and we have compiled an entire section on Swiss Banking.

For deposits under £100,000, these are the recommended jurisdictions:

  • Caribbean (many countries, call for details)
  • Latvia

Banking in the European Union Jurisdictions

With the advent of a piece of legislation called the European Union Savings Tax Directive 2005, the financial confidentiality and privacy of EU citizens has been compromised, if they are subject to it. The reach of this directive extends to certain offshore banking locations if they are either European Union members or fall under its purview and jurisdiction. Whilst scrutiny is lower and confidentiality is higher in tax haven jurisdictions, potential European account holders should note that this EU Tax Directive may adversely affect their financial privacy. This limits the financial privacy of certain accounts held in certain offshore banking institutions.

The member states of the European Union are currently: Austria, Belgium, Cyprus, Czech Republic, Denmark, Estonia, Finland, France, Germany, Greece, Hungary, Ireland, Italy, Latvia, Lithuania, Luxembourg, Malta, Netherlands, Poland, Portugal, Slovakia, Slovenia, Spain, Sweden and the United Kingdom.

Offshore Banking within jurisdictions that are part of the commonwealth of, or is governed by or is a consigner, of these countries and their laws is subject to this European Union Savings Tax Directive. Other offshore financial centres, such as Switzerland and the United States of America, may also comply voluntarily.

In essence, the European Union Savings Tax Directive 2005 is an agreement between EU Member States which allows the exchange of financial or transactional information. This agreement is known as the “automatic exchange of information option” and is the hallmark of the Directive.

European Union citizens must take extra care, therefore, when selecting an offshore banking institution to ensure their financial privacy. It is essential to choose an offshore jurisdiction which is not subject to EU law or EU directives and do not participate in this agreement to guarantee their confidentiality and privacy, thus resulting in increased offshore bank account security and stronger asset protection.

Other Offshore Bank Account Jurisdictions

All of this being said, there are other offshore financial centres which provide many of the same offshore benefits that the EU jurisdictions do, but which are not bound by this EU Directive. These other offshore jurisdictions, not subject to EU Directive reporting, are where European investors need to look to open an offshore bank account if confidentiality, less tax and increased financial privacy are important to them. Although an important consideration, however, it should not be presumed that it would always be advantageous to bank in a non-EU Directive adhering jurisdiction. A more substantial depositor meeting the initial deposit amount requirements might still favour Swiss bank accounts and Switzerland as his offshore banking jurisdiction of choice. Although careful consideration including a fiscal needs analysis would have to be undertaken to ensure that the location met personal and financial requirements. If not, there are alternative jurisdictions which are not subject to the EU Tax Directive that would be very competent in dealing with large sums of money whilst still maintaining abject privacy. Additionally, these offshore financial centres have much lower initial deposit requirements than those required to open an account in a Swiss banking institution, for example. Some OFC’s like Panama and Belize only require £250 or £500 to open an account.

Offshore Company Geography

Before the internet explosion of the mid-90’s, account holders and potential depositors in offshore banks would literally have to walk into a bank (or send an authorized representative to do so) in order to establish an account, transact funds, or formalize agreements. The old “lock box and key” method reigned supreme. However, since the mid-90’s, there has been a veritable explosion in services heretofore unimaginable in many service industries worldwide, and this of course includes offshore banking. Gone are the days of having to actually walk into the bank – now, most of the services are a keystroke away, with world wide web access to accounts and funds. With credit card like debit cards and the advent of electronic funds transfers, virtual signatures, and the virtually limitless access to the internet, offshore banking has been revolutionized into a simpler solution for many individuals and corporations. No matter if your bank is in the Grand Canyon state or Grand Cayman, most of the features offered by banks are just a mouse click away. Assuming that all of the precautions are met and adhered to, the confidentiality of any deposit or investment is as secure as its ever been.

Additional Banking Information

Offshore bank accounts operate in the same manner as any domestic bank account. The client receives a bank account debit card or credit card and online access, wire transfer access and can perform the typical bank account transactions, plus more. Offshore banks offer many of the same conveniences and customer service. When selecting your institution it is important that you choose the provider that is right for your scenario.

Many offshore banking institutions will allow you to set up a bank account for as little as a £1500 initial deposit, and in other cases, much less. All of the recommended offshore bank account providers are highly regulated and adhere to strict international privacy laws. Private accounts typically require a higher initial deposit. However those are negotiable depending on the overall account goals and projections. Any provider of offshore banking accounts that is recommended by is accessible via phone, fax and email and attentive to your needs, yet very discreet.

Your offshore bank account balance will earn interest, usually free of local taxation in the bank’s jurisdiction. Many countries, including the US, tax worldwide income. The interest rates are usually higher and the fees are competitive. Many fortune 500 companies, including oil companies take advantage of offshore banking. Some of the more popular tax haven jurisdictions have hundreds of first-rate banks from which to choose. Financial institutions in private jurisdictions do not report customer account information to any foreign governments, or theirs, so it is up to the account holder to do so. As a responsible company, of course, we recommend that you comply with the tax laws of the jurisdiction to which you are obligated. After your company and account are established, we have CPA’s who are very knowledgeable and can assist with the tax compliance with your international income.

The Offshore Company UK establishes thousands of business vehicles, bank accounts, privacy and asset protection plans throughout the world’s OFC’s. Protecting and growing the finances and assets of our clients is our primary motivation.

Offshore Banking institutions offer a wide variety of benefits and when it comes to privacy, with Swiss bank accounts being second to none. Our detailed information pages on Swiss Banking discuss the private bank accounts available in this offshore financial centre.