Bank account abroad - what is the reason to have it and its advantages
Despite the fact that the procedure of opening a bank account abroad seems to be quite difficult, it is available to almost everyone, and moreover for both legal and natural persons, regardless of nationality and tax residence. What is the use of this financial instrument in business, and how to become an account holder in a foreign bank? Let’s try to understand all important aspects.
The opportunity to open a bank account abroad provides a number of objective advantages for entrepreneurs. It is a matter of opening an account outside the country of the main residence, because the foreign banks, which operate in your country, are exposed to the same risks and regulations as the local banks.
What is for and how to open a bank account abroad
An account abroad may be necessary for the entrepreneurs who plan to promote business up to the international level, or for carrying out financial settlements with the foreign partners. At the same time, a foreign bank account can become a great tool for depositing and accumulation of the financial assets. It is not a secret that banks abroad often offer more favorable terms on deposits.
It is worth to note distinctly the secrecy and strict confidentiality of information about the account holders. Privacy and banking secrecy – these are the main components in the services provision by the modern international banking groups and financial institutions.
The procedure of opening a bank account for a legal entity abroad can be separated into several successive stages. Let's deliberate each separately.
The choice of jurisdiction / country
The choice of the country, where you intend to keep your financial assets, depends on the goals you are pursuing. For example, banking institutions in Western Europe, though they are characterized with a high prestige, are often reluctant to cooperate with the foreign citizens. Banks of Hong Kong and Singapore are more suitable for the commercial structures which operate in South-East Asia. If you going to use the local banks for the accumulation of the assets, you should remember that the deposit will be opened under the condition of the significant minimum required deposit.
Banking institutions of the Switzerland are also of high prestige. This jurisdiction attracts the interest of those who wish to safeguard capital at the expense of the escrow assets, without carrying out an international trade. It is worth to note the relatively high requirements of the local banks in relation to the required minimal account balance.
The jurisdiction of the United Arab Emirates, in recent years, acquires more and more popularity. The government of the country encourages entrepreneurial activities in every possible way and has tried to create ideal conditions for business development, and banking system of the country is not an exception. Today, registration of a bank account in the jurisdiction of the Emirates is the possibility to provide asset protection at the legislative level.
In any case, when choosing a suitable jurisdiction, it is necessary to pay attention to the political and economic situation in the region. The economic indicators of the country can serve as a faithful indication of the perspective of the jurisdiction, and respectively minimize the existing risks.
Acquisition of a "Ready" or registration of a new international company
To open a bank account abroad, you will need an international company registered in the relevant jurisdiction. The modern practice shows that the international and offshore companies are not always created for carrying out economic or commercial activities. Such companies are quite often used for opening a bank account or managing the foreign assets.
Possibility to purchase an already registered "Ready" international company serves as an alternative for registering a new company. It should be noted that both the purchase itself and the annual maintenance of such a company are relatively inexpensive. All that is needed is to get in touch with a specialized company. In addition to the fact that all the formalities in this case are properly settled, you can count on the professional support and assistance of the specialists of the company.
Choosing a banking institution
A key determinant for international entrepreneurs, while choosing a foreign bank for opening an account, remains the possibility of being serviced in a familiar language – in most cases, for international banking services – in English. Besides, all the banks, which offer international banking services, offer servicing in English and in the other languages.
Unfortunately, the majority of the European banks make rather high requirements to the potential clients. It is important to understand that in Europe, not all the banks are ready to work with foreign citizens. Local banks are picky about the openness and transparency of the financial information, as well as about information on the activities of the client.
More and more international entrepreneurs understand the opportunities and advantages of the Middle East. For example, in recent years, the international private business develops actively the market of the Emirates, and banking institutions in the UAE are ready to offer a wide range of financial instruments and to provide a maximum protection of assets.
Making an application to a financial institution
The set of documents, which is required for opening a bank account abroad may differ in accordance with the applicable legislation in the territory of jurisdiction and also depends on the internal bank policy. A standard set includes the following documents:
- Application for opening a bank account, which is filled in due form and signed by the client;
- Copy of the identity document of the applicant (valid foreign passport);
- Statement of the account from another bank, or a letter of recommendation on the applicant's name;
- Incorporation documentation for an international company.
Personal presence is mandatory condition for opening a bank account in the majority of jurisdictions. But in some countries, under the condition of fulfilment of all the requirements, there is the possibility of opening an account remotely.
The term of opening also depends on the internal policy of the bank, somewhere an account will be opened for you within one day, and somewhere you will have to wait for a few weeks. The term is also influenced by the type of a bank account.
As to the types of the foreign bank accounts, one can single out several major directions, in particular:
- Current Bank Account – it is used for implementing the current payments and is characterized by the low interest rates;
- Investment Bank Account – it is applied for long-term investment projects and investments of the assets in the securities;
- Deposit Bank account – it is a perfect tool for keeping and accumulating the financial assets.
Expert advice – of course, you can proceed with opening a bank account abroad without assistance, but then you run the risk of losing a lot of time for studying the environment, or you can make a wrong choice and initially take an unfavorable decision. In the case of taking a decision without assistance, you should be ready for lengthy negotiations and numerous foreign trips. All this certainly seems difficult and raises doubts about opening an account abroad. There is a solution – take the services of our specialized company.
Our company possesses the user - proven and extensive banking base. We know exactly, what account you need, and what banking institution will not give a refusal. Experts will help you to put together promptly all the required documents and to carry out registration with the minimal costs.
In conclusion, we would like to note that when choosing a jurisdiction for opening a bank account, it is important to carry out a thorough analysis of your current activities and to determine the economic and financial characteristics that typify your business structure. After all, the bank account should become an effective tool for achieving the strategic goals of your business.