To protect your assets, and if you are a person who does not have difficulty traveling, opening an offshore account can be a good solution, but it is necessary to act safely and be guided in this process by professionals.
Let's go step by step.
What is an offshore bank?
An offshore bank is located in a different country from where the account holder resides. Offshore banks are usually located in countries with low taxation on financial activities and this makes them particularly attractive.
Offshore banks also offer other advantages such as protection of anonymity, privacy and flexibility in managing accounts (compared to a traditional local bank).
These benefits, along with greater financial stability, are crucial for entrepreneurs looking to protect and grow their wealth.
Offshore banks are not all the same and may not offer the services you need
or, in some cases, they may simply be difficult to manage.
From our many years of experience, we advise against choosing the so-called “neo-banks” or fintech solutions, as these banks are not always available to everyone and may also be limited in the services offered (for example the absence of a physical branch) given that they mainly operate online.
However, if you only need to invoice a few low-value customers or if you want to deposit small amounts directly, these banks may be fine. If you are a professional with more complex banking needs, we recommend opting for a physical bank, also for reasons of security and control.
What makes an offshore bank a high-quality bank?
The quality of an offshore bank depends on the jurisdiction in which it is located.
Some jurisdictions are not financially stable and this makes holding local currency risky because it increases the possibility that the government could take your money, as has happened in Cyprus or other countries in the past.
It is therefore advisable to choose stable banking jurisdictions, which work in favor of businesses and are not subject to controls by the United States (which claims dominance over the banking world and especially over USD currency transactions) or other entities.
Quality of the banking institution
A big difference between banks lies in the provision of liquidity at any time.
Many banks keep less than 1% of deposits available immediately, but there are some countries (for example Belize) that require their banks to keep a minimum of 24 % of their available deposits.
Other banks do not grant any type of loan, so they keep 100% of their deposits at all times, without limitation of amounts (increasingly rare).
Another distinctive element to consider when choosing a bank is its reputation, as it could be important for the purposes of national or international transactions.< /p>
We must also consider the ease of opening the account, underlining that “easy” does not mean “zero effort” but indicates that the opening process is smooth and the bank has an excellent and proven Customer Service.
Many banks and banking jurisdictions considered among the best – such as Switzerland, Panama or Hong Kong – are not easy places to open an account. Banks in these countries have high minimum deposits for foreigners and require physical presence to open an account.
Digital nomads
Another factor to consider when choosing an offshore bank is the ease of adaptation to nomadic life – i.e. whether that bank's policies and services suit your international lifestyle.
The best offshore banks for nomads need a good online banking system. Since you will not always be in the country where your bank is located, it is important that you have the ability to manage your account without the need to make frequent calls or visits but through the use of ATMs or online systems for transactions in various countries.
This need is why banks in places like Georgia and Mongolia have excellent online banking systems, while countries like the United States tend to lag behind.
Some banks have very high costs for international transactions or may sound the fraud alarm if you set foot abroad.
Therefore, you need a bank that you can use while traveling in various countries, and your bank should also offer services such as 24-hour customer support and priority banking.< /p>
Banking advice for 2023
Following research carried out, we have a number of banks that are currently functioning well. This is not a definitive ranking but this list is always constantly changing precisely because the regulations of various countries change quickly and customers who are accepted today could be rejected tomorrow.
The jurisdictions we have currently identified are Singapore, Georgia, Serbia, Cook Islands and some others.
If you are interested in learning more, you need to do a thorough assessment of yours
need to recommend the best banking institution suited to the required needs.