1. This site uses cookies. By continuing to use this site, you are agreeing to our use of cookies. Learn More.

Brief Introduction to Offshore Banking Jurisdictions

Discussion in 'Business & Tax Advice' started by misterawesome, Feb 10, 2011.

  1. misterawesome

    misterawesome Registered Member

    Joined:
    Jan 27, 2011
    Messages:
    68
    Likes Received:
    25
    Location:
    here, there, and everywhere
    Since this is one of my first posts here at BHW, I wanted to give back and contribute to the forum. I have noticed a lot of questions regarding offshore banking and a lot of false information being passed around. In this industry if you aren't careful the consequences can be very serious. Since I am very familiar with this industry I wanted to pass along some knowledge.


    I'm not going to extol the virtues here of having a bank account in a country other than your own, that is for another post, but I wanted to provide a (very) brief overview of some of the different jurisdictions that are good for banking, depending on your needs.


    Safest Jurisdictions
    If you have six figures to park in an account and not really have a desire to touch it, there are a few chances that stand heads and shoulders above the rest, regardless of your country of citizenship or residence.
    Switzerland
    Switzerland has been notorious for the past several hundred as a tax haven, however its not quite what it used to be. Its no longer a haven for money launders and tax evaders like it was before, however when used properly (read those last three words again) it can be a remarkably powerful jurisdiction. Very modern, and some of the most (if not THE most) stable banks are located here. No bank in Switzerland has ever gone under. Ever. They simply get absorbed by a larger bank. There are many good choices in Switzerland, but not as much as there used to be. If you are a US citizen your options are more limited and getting a corporate account opened is very difficult regardless of your citizenship (unless your company is domiciled in Switzerland).
    Singapore
    Singapore is a real up and comer. It is fast becoming the ?Switzerland of the East? because of its reputation for discretion and the high quality of the bankers and banks located there. Singapore is frustrating the rest of the world for its general non-cooperation with exchange of information regarding tax matters. Like Switzerland no banks have ever failed in Singapore. A great choice if you are receiving funds from Asia, there really is no better choice. Hong Kong comes close but in general for Asia, Singapore is the way to go.








    Best Jurisdictions in the EU
    Cyprus
    Bank accounts are generally easy to open, lots of good banks located here. Has safer banks than a lot of the other choices in Europe.
    Latvia
    Seems to be a popular jurisdiction lately, and rightly so. Accounts (both personal and corporate) are easy to open and the fees are very low in general. The banks are not as well capitalized as the ones in Cyprus but the entire financial system in Latvia is extremely modern.






    Notes about the Caribbean Islands
    Much fuss has been made in the past several decades about tiny Caribbean islands being easy for money launderers and terrorists to move their money through. Not so anymore. Almost all of the islands are virtually useless for banking anymore, and not just because of the loss of privacy. Many jurisdictions have banks which are not well capitalized. The two best jurisdictions for ease of account opening, banking privacy, and low cost are St. Vincent and the Grenadines and St. Kitts and Nevis. Of these two if I absolutely had to choose I would go with St. Vincent and the Grenadines, especially if I was a US citizen, but that being said both are good choices. Caribbean jurisdictions you should absolutely avoid include Cayman Islands, Belize, Dominica, St. Lucia, and all of the other British dependencies. Also included in this list would be Panama, which was popular for a while but recently signed away its banking secrecy in a Tax Information Exchange Agreement (TIEA) late last year. Now that it has to compete head to head with other jurisdictions, it is no longer a recommended choice.






    Obviously there are plenty of other choices but this primer is not meant to include everything. Hope this was informative.
     
    • Thanks Thanks x 12
  2. wholesalereplica

    wholesalereplica BANNED BANNED

    Joined:
    Oct 14, 2010
    Messages:
    692
    Likes Received:
    247
    thanks for that was looking at Singapore just recently
     
  3. misterawesome

    misterawesome Registered Member

    Joined:
    Jan 27, 2011
    Messages:
    68
    Likes Received:
    25
    Location:
    here, there, and everywhere
    Can't really go wrong with Singapore, are you doing work in SE Asia?
     
  4. TheLinkGuy

    TheLinkGuy Power Member

    Joined:
    Nov 20, 2010
    Messages:
    627
    Likes Received:
    128
    Location:
    EU
    Great writeup - I'd love to hear some feedback from some members on their strategies.

    I'm looking more ot diversify my finances.
     
  5. misterawesome

    misterawesome Registered Member

    Joined:
    Jan 27, 2011
    Messages:
    68
    Likes Received:
    25
    Location:
    here, there, and everywhere
    Many people forget that the greatest risk of all is sovereign risk. If you have all of your assets, businesses, servers, bank accounts, stocks, real estate in one country a single court order and you have nothing. There are numerous strategies to accomplish this, the most complete is the six flags theory. The wiki article is sort of basic.
     
  6. lancis

    lancis Elite Member

    Joined:
    Jul 31, 2010
    Messages:
    1,632
    Likes Received:
    2,384
    Occupation:
    Entrepreneur
    Location:
    Milky Way
    Home Page:
    A very timely post, Misterawesome!

    This is exactly what was troubling me in the past 2 weeks. Are you familiar by chance with nuances of banking for gambling affiliates?
     
  7. sirgold

    sirgold Supreme Member

    Joined:
    Jun 25, 2010
    Messages:
    1,260
    Likes Received:
    645
    Occupation:
    Busy proving the Pareto principle right
    Location:
    A hot one
    For the lazy... the first part and the philosophy are taken verbatim from wikipedia. The part regarding the 6th flag is not...

     
    • Thanks Thanks x 3
    Last edited: Feb 10, 2011
  8. misterawesome

    misterawesome Registered Member

    Joined:
    Jan 27, 2011
    Messages:
    68
    Likes Received:
    25
    Location:
    here, there, and everywhere
    Thanks for posting the wiki article. The six flags theory is a great one to follow and not as difficult as you might think.
     
  9. lancis

    lancis Elite Member

    Joined:
    Jul 31, 2010
    Messages:
    1,632
    Likes Received:
    2,384
    Occupation:
    Entrepreneur
    Location:
    Milky Way
    Home Page:
    Oh, thats great!

    As it stands now banks in Cyprus (or EU in general) are almost afraid of anything related to gambling, and refuse even those who are interested in affiliate programs only. So i was looking for an alternative location, or possibly a bank within EU that knows the difference between gambling and affiliate marketing.

    Can you suggest anything?
     
  10. misterawesome

    misterawesome Registered Member

    Joined:
    Jan 27, 2011
    Messages:
    68
    Likes Received:
    25
    Location:
    here, there, and everywhere
    Lancis: not on this forum but feel free to message me.
     
  11. gettystone

    gettystone Newbie

    Joined:
    Feb 10, 2011
    Messages:
    31
    Likes Received:
    14
    Occupation:
    Web Entrepreneur in winter, baseball clubhouse man
    Great post, I'd just like to note that Swiss banks are not what they used to be. I'd recommend Singapore or Latvia instead.
     
  12. lancis

    lancis Elite Member

    Joined:
    Jul 31, 2010
    Messages:
    1,632
    Likes Received:
    2,384
    Occupation:
    Entrepreneur
    Location:
    Milky Way
    Home Page:
    Thanks! PM sent.
     
  13. misterawesome

    misterawesome Registered Member

    Joined:
    Jan 27, 2011
    Messages:
    68
    Likes Received:
    25
    Location:
    here, there, and everywhere
    Very true, Swiss banks are not that impressive. However, for sheer safety of capital it's hard to beat Switzerland. But given the choice I would go with Singapore. As you mention Latvia is also a good choice but Singapore is probably the best jurisdiction if you take everything into account.
     
  14. monsieur

    monsieur Newbie

    Joined:
    Feb 9, 2011
    Messages:
    45
    Likes Received:
    9
    Excellent post !
    Exactly what i was looking for.
    But i'm a bit noob in all this so i have a few questions :
    - do you put all your incomes in one bank ? Isnt it dangerous ?
    - how do you select your bank ?
    - how do you use this money ? With a standard credit card from this bank ?
    - Singapore is very good but i've heard Hong Kong is quite good and a lot cheaper.
     
  15. misterawesome

    misterawesome Registered Member

    Joined:
    Jan 27, 2011
    Messages:
    68
    Likes Received:
    25
    Location:
    here, there, and everywhere
    Depends on how much money you have, some banks are better just for holding large sums of money and some are better for transacting. I wouldn't hold all of my money at any one bank though.

    Generally some banks are better at opening accounts and easier to work with. You would have to find someone who has worked with them before, but be careful at using who you find with google searches, many of them are scammers.

    Almost all of the banks (and all of the ones I use) offer at least a simple debit card that can also be used to withdraw via ATM. Some of the fancier ones offer secured credit card programs and a few offer actual credit cards but those are difficult to get and not worth the fuss.

    Hong Kong is a great option, especially if you are dealing a lot with China. Hong Kong also has better brokerage options than Singapore does. One of my favorite corporate structures takes advantage of a loophole in Singaporean law that states that as long as money acquired my a corporation formed in Singapore is not brought into Singapore then you don't have to pay taxes on it. So I use a Singaporean Limited Company and a Hong Kong bank account and effectively pay zero taxes to anyone on those profits. And that structure looks a LOT more legitimate than say a Belize or Seychelles IBC and a bank account in some god forsaken corner of the world.

    All in all you usually get what you pay for, and it depends on your needs.
     
    • Thanks Thanks x 1
  16. lilaspr

    lilaspr Newbie

    Joined:
    Sep 11, 2009
    Messages:
    11
    Likes Received:
    11
    Cyprus i find it comfortable and easy
     
  17. cookie48

    cookie48 Jr. VIP Jr. VIP Premium Member

    Joined:
    Aug 19, 2009
    Messages:
    128
    Likes Received:
    14
    I wonder how many guys that posted here can really afford a basic account in one of mentioned countries :p
     
  18. Autumn

    Autumn Elite Member

    Joined:
    Nov 18, 2010
    Messages:
    2,197
    Likes Received:
    3,041
    Occupation:
    I figure out ways to make money online and then au
    Location:
    Spamville
    That's pretty interesting, I'd love to hear more about how you go about setting up this kind of structure. I want a bank I can actually physically walk in to.
     
  19. misterawesome

    misterawesome Registered Member

    Joined:
    Jan 27, 2011
    Messages:
    68
    Likes Received:
    25
    Location:
    here, there, and everywhere
    It's not as expensive as you think. Generally you want a bank introduction from someone who is associated with the bank, as it lends credibility and simplifies the account opening process. Some jurisdictions have banks with no minimum deposit.

    Form a Singapore company and have a bank account in Hong Kong. Do all business through the HK bank account and never bring any of that money into Singapore. The same thing can be accomplished in numerous smaller countries through IBC (international business company) legislation but in those cases you can bank in the same country you form the company in but the restriction is that you can't do business in that country (rarely an issue). There are MANY good banks in Hong Kong to do business with.
     
    • Thanks Thanks x 1
  20. stumpyb

    stumpyb Newbie

    Joined:
    Dec 9, 2008
    Messages:
    14
    Likes Received:
    1
    got any info about the bahamas?