Bank Reference Letters – A Threat to Privacy

When you decide to open an offshore bank or brokerage account, whether in Switzerland, Cayman, Belize, Panama or anywhere else… one of the most typical requirements is for a bank reference letter. Offshore bankers are generally required to ask for such letters in order to complete their due diligence file on you as a new account holder. This applies equally whether you are opening a personal or corporate account.

Yet, bank reference letters can be a big threat to your privacy. You are opening an offshore account mainly for privacy reasons, I would assume. You believe that your finances are your business and nobody else’s. You are concerned about threats to your banking privacy onshore, in the form of tax information exchange agreements, credit reference bureaux and the like. So in this blog posting, I am going to look at what you can do to ensure your privacy, and whether it is possible to open offshore bank accounts without reference letters?

It has been reported recently in the offshore media that requests for “Bank Reference Letters” are now subject to “Suspicious Transaction” reporting in the USA. The story goes that banks are refusing to issue reference letters because they would then have to file a suspicious transaction report.

Frankly, we have seen no evidence to support this claim. It’s worth noting that more and more entities are requesting bank reference letters. For example, these days buying a high value property quite often entails providing a bank reference to prove clean funds, clear of criminal origin. So requests for bank references are really on the increase and most requests probably have nothing whatsoever to do with offshore accounts. On the contrary, one would think the powers that be would like to encourage more use of bank references because they create a paper trail. But therein, of course, lies the problem!

One of my clients in the UK did tell me today that she had been asked to justify to the bank’s head office her request for an open reference letter addressed “To Whom it May Concern.” Most UK banks now blankly refuse to write references like this, though some still do.

Anyway, whatever the truth of the matter, I understand that many clients are reluctant to tell their bank at home about the business they are doing offshore, and a bank reference request might entail this. So many clients ask how they can open an offshore bank account, whether corporate or personal, without a bank reference.

The answer is that it is difficult, but certainly not impossible. Over the years I have built up excellent relationships with a number of top flight European, Latin American and Caribbean banks, and I do understand how they work. By dealing at a higher level, I get to talk to intelligent bankers who are prepared to get to know clients as individuals not as numbers (though they might still offer numbered accounts!) The benefits of these referrals and relationships I am happy to pass on to my readers.

Let’s make it clear, I am not saying that I deal with banks that will cut corners on due diligence. We only want to deal with honest individuals. I have plenty of experience of sniffing out scammers or crooks and they will not get in the door at any bank, at least not with my endorsement.

But if you are a true, honest, freedom-loving and privacy seeking individual with good intentions and clean funds, who is sick of government intrusion in your life, then I am prepared to help you to open accounts without bank references. We can do it properly and legally in reputable banks. I do know which banks have more flexible policies, especially where higher level personnel are involved in the account opening.

You will have to provide some kind of reference letters, but not necessarily from a bank. Commercial reference letters might be acceptable, or references from a lawyer or accountant. Other banks might accept copies of the last 3-6 months of your bank statements, in place of a reference. Or sometimes you are permitted to open a personal account without a reference, and then use that as the basis to open a corporate account if you wish soon after.

I am certainly not going to name specific banks here in public, only to have them deluged with scammers trying to open accounts and picked on in public by the anti-tax-haven people. Suffice to say that if you are holding off opening an offshore bank account because of worries about providing a reference, don’t wait any longer. Take a look at my Practical Offshore Banking Guide 2009. If you are already a Q Wealth Member, it is available free of charge for download instantly in pdf format. If you’re not yet a member you can sign up right now and get instant access.

Within the Guide, I would refer you specifically to the section about “What Can You Do if Not All the Documents Are Available.” You’ll find some guidance there. You’ll also find a list of various different offshore banks and brokerage houses all around the world we have successfully worked with, done due diligence on, and recommend. If you need additional help with bank referrals, remember that as a paid Q Wealth member you are entitled to a free e-mail consultation with Peter Macfarlane in order to get your structure up and running smoothly.

Full membership brings a host of other benefits too… including information on Secure, Non-Reportable Gold Investments for example. You will also be invited to exclusive Q Wealth Events… designed for present and future millionaires!

If however you would prefer just to try our services first of all without any cost, commitment or obligation, sign up now for our free five-part introductory course on Offshore Banking and Asset Protection.