What is an offshore account?
An offshore account is a bank account of an individual or a company that is opened in a financial institution located not in the country of the individual’s location/country of the company registration, but in a low-tax or tax-free jurisdiction.
Do not confuse the concept of “offshore account” and “offshore” in the context of the company. An offshore account is a bank account, and an offshore is a company that is registered in a low-tax or tax-free jurisdiction.
What activities do you need an offshore account for?
Before opening an offshore account, people are more likely to be guided not by their type of activity, but by general personal/corporate interests.
It is believed that opening an offshore account is a way to protect personal or company assets, as well as to simplify cooperation with counteragents and employees (if any). But there is another side to the coin – in the context of the global trend of the fight for the legalization of funds obtained by illegal means, banks of other (non-offshore) jurisdictions are increasingly difficult to conduct transactions through offshore accounts. Therefore, there is always a risk that it will be possible to somehow get money into such an account, but it will be very problematic to withdraw it and get it somewhere where it can be freely disposed of. Hardly anyone needs money in Panama or on the islands, the location and the name of which are not known to anyone.
Therefore, before opening an offshore account for an individual or opening an account for an offshore company, it is worth analyzing the existing need for the presence or use of such an account. If such a need exists, despite all the risks, it is worth opening an offshore account.
What is the difference between an offshore account and other types of accounts?
Basically, an offshore account is the same bank account as other bank accounts. However, the main difference is exactly where to open an offshore account.
First of all, it is worth distinguishing between a foreign account and an offshore account. A foreign account is a bank account of an individual/company that is opened in a foreign jurisdiction. An offshore account is a bank account of an individual/company opened in a low-tax or tax-free foreign jurisdiction – offshore.
It is the factor of the banking institution jurisdiction in which the account is opened that determines whether such a bank account is offshore or not.
VigoLex lawyers will be happy to help you with your request and advise on where to open an offshore account, how much it costs to open an offshore account, the nuances of such an account opening procedure, etc.
Where is the best place to open an offshore account?
The answer to the question of where it is better to open an offshore account should be provided only after analyzing all the goals that you want to achieve by opening such an account.
For example, in some cases, if you want to open an offshore account, Ukraine as a jurisdiction for opening an account is also suitable: the legislation allows you to pay 5% of income, subject to a number of requirements. In the context of world practice, this is a low-tax jurisdiction. Such an account will not be considered offshore in the full sense (because Ukraine does not belong to offshore jurisdictions from the point of view of international law), however, your request may not actually require opening an account in an offshore jurisdiction.
If you really need to open an account in an offshore jurisdiction, you need to carefully consider the choice of the bank in which the account will be opened. Examples of financial institutions for opening an offshore account are the following:
- ABC Banking Corporation;
- Commerzbank;
- CIM Banque;
- Wize;
- Hermes Bank;
Based on the experience of VigoLex team, before opening an offshore account for personal purposes or opening an offshore company account, it is always recommended to consult with specialists, including on choosing the bank that is most suitable for your situation.
Specialists will help you understand the need to open such an account in your situation, develop the most optimal action algorithm when opening an account, and their experience will help you avoid mistakes that can be made when opening an account.
Also, do not forget the important aspect of opening such an account – how much does it cost to open an offshore account? VigoLex team is ready to advise you on this issue and find the most optimal option for you.
What standard documents are required to open an offshore account?
The documents required by banks when opening an offshore account differ depending on whether such an account is opened for an individual or for a company. In addition, the list of required documents may depend on the jurisdiction/bank in which you will open an account.
When opening an offshore account for an individual, the following documents are usually submitted to the bank:
- passport;
- a document confirming your place of residence (payment of utility bills, etc.);
- application to the bank;
- in some cases, the bank may require documents confirming the legality of the funds origin (tax declaration, contract of purchase and sale, etc.);
When opening an offshore account for a company, banks usually require the following documents:
- passports of owners and directors of companies;
- documents that confirm the place of residence of directors and owners (payment of utility bills, etc.);
- application to the bank;
- constituent documents of the company;
- certificates of good standing;
- additional documents upon request.
Easy and quickly to open an account with VigoLex
The specialists of VigoLex team have extensive experience in supporting the process of opening offshore bank accounts for the company clients and their businesses in different jurisdictions.
The available expertise allows us to provide services with high quality, within the agreed terms and with the least possible level of client’s involvement in the legal part of the account opening process.
VigoLex team will help you open an offshore account, regardless of whether Ukraine is the place of registration of your company or other countries.
