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How to Open an Offshore Bank Account

Cayman National BankNovember 12, 2014 | by Steve McCurdy

You might wonder what the difference is between having a checking account in your own neighborhood and having an offshore bank account. The reality is that there can be all the difference in the world.

Top Five Reasons to Open an Offshore Account

Reason 1) Spread Your Political Risk



If you are an investor you know that you should never put all your eggs in one basket. It’s better to spread your investment risk over a variety of securities. The same is true with political risk.

Most Western governments are now technically insolvent, and, instead of addressing their problems head-on, they are simply papering them over with counterfeit money. Nowhere is that more true than in the banking system. As problems worsen, we should expect capital controls, bail-ins, deposit taxes, nationalizations of retirement accounts, bank holidays, and other predatory, destructive government actions.

History has proved that confidence in banking systems, particularly in a financial crisis, is badly misplaced. Moving some of your hard-earned cash offshore assures that you are not “owned” by any one country or government, and that is just good business.

Reason 2) Most Offshore Banks are Safer Repositories of Your Money

Most Western banks are highly leveraged and keep very little cash on hand to meet Belize Bankingwithdrawal requirements. Deposit insurance is provided, albeit by insolvent governments. The FDIC currently has a total reserve of approximately $30 billion, but that amount equals less than half of one percent of the $9 trillion of deposits it insures. There are 36 banks in the United States that have deposits exceeding the FDIC’s total reserve.

Many offshore jurisdictions have banks with lower debt, greater capitalization, better histories of stability, and more conservative managements than their US counterparts. A prominent financial magazine just published its 2014 list of the ten safest banks in the world, and none is in the United States.

Reason 3) Higher Interest Rates and Currency Diversification

The ECB and the Federal Reserve have kept interest rates at levels which do not even enable you to keep pace with inflation. You can find significantly higher interest rates in most offshore banks.

Offshore BankingHolding foreign currencies is another great way to internationalize your portfolio, and few domestic banks offer any way for you to do that. Many offshore banks provide convenient on-line platforms enabling you to buy and sell foreign currencies.

Reason 4) The Ability to Act Quickly in an Emergency

When domestic banks begin to impose capital controls they give either very little or no advance notice. Having a small offshore account, even if it has just a minimum deposit, gives you the ability to transfer money to safety very quickly should an emergency arise.

Reason 5) Peace of Mind

You should regard an offshore bank account as an insurance policy. It will protect you from potentially destructive actions of unsound banking systems and bankrupt governments, and free you from financial dependence upon one government.

Why You Should Act Quickly

On July 1, 2014 FATCA (Foreign Account Tax Compliance Act) was implemented by the USHSBC Treasury. FATCA imposes onerous reporting regulations on all foreign financial institutions (FFIs) who have US citizens as customers. For many FFIs the logical business decision is simply to stop doing business with US citizens, and that is the thinly-veiled purpose of FATCA. It is a de facto capital control because it is designed to prevent Americans from moving their money offshore.

FATCA provides a strong incentive to act sooner rather than later, because it is becoming increasingly more difficult to open an offshore account. Despite FATCA, however, there are offshore banks that still welcome American business, and some will open accounts remotely on line.

Finding a Bank

Because the offshore banking landscape is changing daily, the easiest way to find an offshore bank is to pick up a free subscription to Casey Research’s INTERNATIONAL MAN. The archives of this excellent resource has a category called “Offshore Banking” which will help you quickly find the best bank for you.

Opening an Account

CIBLThe country of Belize is still very friendly to Americans and offers some good banking options. One of our favorites is Caye International Bank, Ltd., in Belize. Banks in Belize have a 24% capital requirement vs 3% for US banks, so in relative terms they are both safer and more liquid than domestic banks. You can have full check-writing privileges and internet banking with your CIBL account just like you do here.

To open your account you will need:

1) An original, signed Account Application Form,
2) A Signature Card
3) A Depository Agreement & General Terms and Conditions Agreement (provided by Bank)
4) Two (2) original letters of reference – one from a bank and one from a business professional
(CPA, attorney, etc) or business associate
5) Copies of your passport with original notary signatures and stamps
Mail your complete application by UPS or Fedex to:
Caye International Bank LTD
Coconut Drive
San Pedro Town, Ambergris Caye
Belize, Central America
Remember, a year early is better than a day late.


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