subject: Opening And Maintaining Corporate Offshore Banking Accounts [print this page] If your next bank account opening adventure will be at your local bank, there is relatively little stress and few procedural matters for you to take care of. There are thousands of local accounts opened every day in major cities, and the process is quick and painless. Corporate offshore banking has vastly greater rewards, but is also quite a bit more complex. Today we are looking at some of the basic facts about bank account opening overseas, including the legislative requirements and some maintenance tips.
1. The Know-Your-Customer Principle
A professional and respected corporate offshore banking service will only deal with banks that operate under the know-your-customer principle. This is designed to discourage money laundering, a seemingly innocuous crime which can hide more serious offences such as drug dealing, child prostitution, illegal gambling and firearms trading. The principle usually requires that:
Banks know the names of account holders, and if the holder is a company, the names of the directors or those with a major financial interest. The identity must be proven.
Banks monitor suspicious transactions (more on that later)'
Banks are aware of correspondent banks with whom their customer does business.
Banks are aware of the identity of company employees, in some cases.
Information including the anticipated annual sales turnover, source of funds, number and amount of expected transactions are provided.
Physical presence may be required for offshore bank account opening
It all seems a bit intrusive - but remember that privacy in corporate offshore banking is guaranteed by the Banking Secrecy Act.
2. Investment management services as agents
The maintenance of your bank accounts can be much easier if you use a financial services company for everyday transaction processing. If you do this especially in the initial period, it helps avoid raising suspicions through incorrectly administered transactions.
When you use a management service for your corporate offshore banking, transactions are processed within 24 hours in most cases, and joint signatories are required.
3. Avoid money laundering suspicion for legitimate transactions
We mentioned earlier that banks monitor incoming and outgoing transactions for characteristics that make them seem suspicious - that is, that are similar to what money launderers engage in. Investment management services and corporate offshore banking experts can help you avoid being inadvertently pegged as engaging in illegal activities, and perhaps having your cash frozen. Make sure you:
Include a message describing the transaction for all incoming and outgoings, especially large ones. It may state that the field is optional - but it is in your best interests to fill it out.
If you are going to have an especially large bill or amount of income in one transaction, have your offshore banking service notify the institution and explain the reason.
Avoid cash deposits where possible.
Exchange cash into other currencies as infrequently as you can manage.
Again, it does seem like you have to jump through hoops to open and maintain corporate offshore banking accounts. However there are service to help - and the work is outweighed by the benefits!
by: Gregory Smyth
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