Retirement Abroad: Offshore Bank Accounts

Financial access and security are vital requirements when contemplating retirement abroad. It is necessary to have assets safely held and easily available. One of the best ways to solve these problems is by having an offshore bank account. As with anything there are a few safeguards that need to be taken in opening an offshore bank account. It should first be understood that it is both legal and easy to have such an account.

An offshore account is simply a bank account with a bank that operates in country different from the residence of the account holder. The anonymous or numbered accounts given publicity in many novels of intrigue and crime are now virtually things of the past. Offshore accounts are safe, probably safer than normal non-offshore accounts. Within a country the tax authorities could seize funds in a domestic account leaving the burden of proof of innocence of a crime on the account holder. It is much more difficult to take funds from an offshore account and may well involve obtaining a court order which probably requires at least the prima facie evidence of a crime. Since the Twin Towers attack in New York (9/11) increasing restrictions have been placed upon banks. Total privacy is now difficult to obtain but a satisfactory level of performance can be found.

Advertisements can be found in newspapers, financial journals and on the internet offering introductions to banks and the establishment of offshore bank accounts. These should be ignored. The offers amount to the provision of freely available application forms, no genuine introductions and a pre-supply charge invoice in three or four figures. A personal or company offshore account can be opened with a minimum of formality and, except, usually, in the case of a company account, attendance is at the bank is not required.

Small banks on Caribbean or Pacific Ocean island tax havens should be avoided. Such banks often manage their affairs as single accounts with larger banks so all that happens is that an extra layer of charges and formalities is introduced. The location of such accounts also draws attention to the account holder. It is useful to have the chosen bank operate in an area which is governed by the kind of common law to which one is accustomed. Generally the choice will be between derivatives of British or Roman-Dutch law. The differences relate to burdens of proof and the status of women but there is no need to consider such detail here. The preference should also be to have the bank do business in a language in which one is totally fluent. The geographical and jurisdictional location relevant to the country of residence are also important. Banks are increasingly succumbing to the pressure of governments to enter into information sharing arrangements with tax authorities. As an explanatory example, it would not be a good idea for any EU resident to open an offshore bank account in the British Channel Islands or the Isle of Man. Agreements between banks and governments cover the whole EU area and are increasingly applicable to the traditional offshore banking countries such as Switzerland, Austria, Andorra and Luxembourg.

There are large globally operating banks that will permit the opening of offshore accounts via the internet with the provision of the appropriate documents and a minimum deposit. Some also do business in places that are not considered to be tax havens. Most major banks offer debit cards with offshore accounts. The preference should be for a Visa or MasterCard debit card. Although these are not credit cards and any use is charged immediately to the bank account they can be used for such things as airline ticket purchase or hotel bookings. Another useful facility is that the accounts can be of a multi-currency nature. Access via the internet for all transactions is essential.

The establishment of offshore corporate or trust structures will probably require the supply of additional information and personal attendance at the bank may also be necessary. Supporting documents will include a certified (notarized) copy of a passport, proof of residency (a utility account or driving license will suffice), a letter of recommendation by the local branch of the offshore bank or from a current account holder or from any bank with which business is currently conducted, a personal or business reference and a completed signature card. Forms and supporting documents must usually be mailed to the bank and funds transferred. The opening deposit can be as little as $US2000.

These suggestions should enable a retiree to have access to financial assets with the least possible risk. Offshore income can be paid into the offshore account and wire and plastic card withdrawals will be available. Local banking for any local earnings, if allowed, can be handled via a local bank.

Les Johns, a world wide traveller, has much experience in offshore living. The benefit of his international roaming can be had at his web site which is worth a visit by all thinking of retirement abroad. Also available from the web site are the modestly priced country specific books in the “How to Retire in… ” series published for reading on Amazon Kindle and Barnes and Noble Nook. Research time will be saved using these resources.

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