Offshore Banking: How to open an
Offshore Bank Account legally (Guide 2020)

Offshore banks were once associated with shadow economy, organized crime, money laundering, corruption and tax evasion. They were weakly regulated. The absolute banking secrecy made the anonymous bank account extremely attractive. Opening an offshore account anonymously using a password or number was widespread back then. There were even offshore banks (shell banks) with no physical presence until the Bush Administration passed the USA Patriot Act in October 2001 and declared shell banks with offshore accounts illegal.

Anyone wishing to open an offshore bank account today is aware that offshore banks no longer offer absolute banking secrecy. Automatic Exchange of Information (AEOI) and Common Reporting Standards (CRS) have eliminated banking secrecy in tax matters almost everywhere. Today, good offshore banks are heavily regulated. They want to know who they do business with. The KYC Rules (Know Your Customer Rules) are strictly applied. Not only does the client have to explain the origin of funds, but he has to provide documentary evidence where his money comes from and what kind of business he does.

The days of an anonymous secret bank account are over. However, you can open a secret safe deposit box for tangible assets if you do it outside of the banking system. Numbered bank accounts still exist in Switzerland for more privacy. Today, they are not anonymous. The numbered account has a number or code and your identity is exclusively known to your private banker. Other employees of the bank will not see your name. However, secret numbered bank accounts are subject to the AEOI & CRS.

The most common bank accounts are Private Accounts and Corporate Accounts.

The Private Account is opened in the name of a private individual. A private account can also be set up as a joint account (joint account). Couples love joint accounts. A private account can be set up as a savings account for resident clients or an account for investments for non-resident private banking clients.

Why is a Swiss bank account so special?
Swiss private banks mainly offer investment accounts for private banking and asset management to wealthy non-resident clients, so-called High Net-Worth Individuals (HNWI). A private banking client has a dedicated private banker responsible for his investment accounts.

What is the minimum balance to open an account in a Swiss bank?
Swiss banks accept investment accounts only. For successful investments with sufficient risk diversification, your investment product must be well-diversified. To achieve a sufficient diversification grade you need a substantial amount of minimum ca. 500’000 USD. Therefore, Swiss offshore bank account with no minimum deposit does not exist. The minimum deposit requirements are different from bank to bank.

The Corporate Account is a company account that is in the name of an offshore company. It is typically used as a transaction account. Corporate Accounts opened in the name of a classic offshore company (IBC) are very widespread in offshore banking (offshore business bank account). To mask the identity of the beneficial owner of the account, tax evaders misused corporate accounts of IBCs. In the past, they had an anonymous account, which was opened on behalf of an offshore company and protected by strong banking secrecy with offshore banking jurisdictions.

Non-tax-compliant assets, also known as tax neutral assets (in fact it’s black money), were maintained via Corporate Accounts in the name of offshore companies.

Let me give you an offshore banking example:

Companies being domiciled in the British Virgin Island Company (BVI) were the most used offshore companies globally to hide untaxed assets (no accounting obligation, bearer shares, secret owner) with offshore banking. When the bearer shares of BVI were abolished as a result of international pressure, so-called nominee shareholders acted as shareholders, to hide the identity of the effective shareholder or beneficial owner. If you want to found such a letterbox company today, you can still set up the offshore company quickly, but no good bank will approve the subsequent account opening.

Upon specific request, we are in a position to open Commercial Bank Accounts with Swiss banks. Swiss banks are opening Commercial Accounts if the owner of the company maintains a private banking account for his private wealth. They ask for a substantial turnover for account opening.