Many business owners ponder if their company needs an offshore account. Just like individuals, businesses often need an extra level of security and freedom. In many local jurisdictions, businesses are forced to pay hefty taxes. As a result, so much money goes away from the organization. This has an impact on the company’s growth plans. As a result, many companies choose to save their funds in offshore destinations. Offshore investments have many interesting advantages. In the long run, you will be able to save more, and diversify your accounts. This proves to be very useful for businesses. After all, who wouldn’t want to safeguard, and make more money?
A primary reason behind the rise and glory of offshore banking would be secrecy. The level of secrecy depends on the bank, and its policies. Yet, most offshore banking destinations are famous for offering higher level of secrecy than any local government. In countries like Switzerland, it is illegal to share customer details with others. And, any bank that doesn’t follow rules may even lose its license. This is how strict and discreet offshore banking has turned into. Also, cooperates choose to invest in offshore countries for factors like currency control. When compared with countries that have high tax policies, the offshore banking systems are less rigid.
Unlike personal banking accounts, the offshore accounts are likely to have lessor service charges. For example, in Belize you need less than 500 USD to set up and maintain an offshore account. This is several times cheaper than opening and setting up an account in western countries. Above all, the financial stability of banking systems in offshore places like Germany, Cayman Islands and Singapore is high. When businesses choose to expand and growth, they can make use of the bank’s stability for better decisions. In fact, taking risks will become easier when your financial system is well maintained.
With this being said, here are few questions you need to raise while opening an offshore bank account for your company.
Should you visit the offshore country in person?
The answer to this question depends on the offshore destination you choose. If you pick Singapore or Hong Kong for opening the account, you will be asked to visit the bank in person. In places like Mauritius and Switzerland, a representative can complete the task. You need to assign a representation in the country to complete the procedure on your behalf. And, when you choose Belize or Cayman Islands, you can finish opening the account online. Most offshore banks have a well-designed online system. You will be allowed to fill the application, and upload documents to complete the process.
Should the company be opened, before starting the account?
Many a times, budding entrepreneurs wonder if the offshore account can be opened before the company. Well, the workflow expects you to start the company and then open an offshore bank account. This is because the offshore bank account application will expect you to disclose documents about your company. Details like registration ID, name of the company, and stakeholder information has to be presented. You will not have access to these details, without a Company that is up and functional.
Remember, the company’s KYC document is extremely crucial for opening any corporate account. Whether it is in your local jurisdiction, or an offshore destination – the KYC is mandatory. This document carries many valuable pieces of information about your company.
Does starting a business in an offshore destination, open a bank account automatically?
When you open a company in any offshore country, the bank account will not be opened in parallel. Of course, it might sound like a great option to start the offshore account along with your venture. In such cases, you should approach the bank and raise a request. If the bank is willing to process papers, along with the opening of the business – you are certainly lucky. But, the final decision depends on the bank. In order to initiate this workflow, all your papers should be in place. And, you must have provided the bank with your personal information.
How many countries allow offshore bank accounts for corporates?
Once you decide on an offshore bank, for open corporate account, it is natural to look for potential destinations. Over the years, the number of offshore banking opportunities has grown by leaps and bounds. You have so many countries to choose from. Great destinations for your corporate account would be Switzerland, Singapore, Hong Kong, Mauritius, St. Vincent and Grenadines & Latvia. Of course, these are famous places for offshore banking systems. If you are willing to maintain a low profile for your corporate offshore bank account, countries like Puerto Rico and Belize can be considered.
How long does the process take?
This is one of the most questions raised on offshore bank, for open corporate account and individuals. On an average, you will need two weeks for completing the process. But, the application has to be flawless, and all important documents need to be attached. When you make mistakes in the application, the overall duration will increase.
After the account is opened, the bank will need a week for setting it up. During the set up, customized features and other services requested by your company will be included.
What are the primary requirements for opening an offshore corporate bank account?
To begin with, all bankers will ask for the company’s certificates. You should present the memorandum and articles of association. All benefiting stakeholders need to share their details. This includes passport copies, address proof and photographs. If the company is ought to be started, you need to submit details about your business proposal and plans. All of these documents need to be notarized.
The above list of documents is a basic checklist. In addition to these required documents, you will be requested for other pieces of information by the bankers. These details will differ from one bank to another. Hence, talk to your offshore bank for further information.