Since the publication of this article, it has become a great deal more difficult to open an account in either Hong Kong or Singapore. To find out which jurisdictions are now better options for you, please read our Practical International Banking Guide, in which you will find the names and contact details of individual personnel within banks all around the world.”
Singapore is “a convenient destination to protect and add value to your international wealth” according to the website of one of the 205 banks operating in Singapore today. I couldn’t have put it better myself!
Singapore has developed in recent years into a sophisticated private banking and wealth management base for Asia. But besides targeting their traditional but fast growing market of wealthy entrepreneurs in Asia, the best offshore banks in Singapore today are also developing products and services tailored for North Americans, Europeans and Australians, including multi currency accounts.
UPDATE – 2015 For the Latest information, names, addresses and contacts, see the latest “Offshore International Banking Guide 2015“
If this sounds like you, read on to find out about some of the advantages and disadvantages of opening an offshore bank account in Singapore, and learn how to open an offshore bank account as a non-resident. Is Singapore the best offshore banking country for the new decade?
Typical investors from this latter group are looking for first-world banking services, delivered over the internet in English, in a country that is outside the zone of influence of the United States and the European Union.
One of the world’s most prosperous countries, Singapore today boasts a prominent financial centre and highly developed economy. Its flexible regulatory framework, independent judiciary and practical English-inspired legal system have become the foundations of the country’s success.
In common with most offshore financial centres, interest earned by individuals on bank deposits and foreign sourced income – including foreign sourced dividends received on non-Singaporeans securities – is exempt from Singapore taxes. Singapore also has no capital gains tax nor estate duty on bank deposits and investments.
Accounts can freely be maintained in all major currencies. These multi currency accounts provide an excellent hedge for those of us who foresee major devaluations of currencies like the dollar and the euro in the months and years ahead.
Accounts may also be opened in the name of foreign entities like corporations, trusts and LLCs, achieving even greater privacy and asset protection benefits, and sometimes legally sidestepping any requirement to report assets as personal holdings.
All these benefits are delivered in a strong bank secrecy regime, helping account holders to protect their investments from prying eyes inside or outside the country. Banking secrecy in Singapore is not just laid down by law, but is part of the national business culture. Indeed, tax authorities in Singapore are specifically blocked from having any access to individual bank accounts.
As in Asia in general, a lot of business in Singapore has traditionally been carried out in cash. This is epitomised by the $10,000 bill, the largest bank note in the world: at current exchange rates (January 2010) one of these bills is worth more than seven thousand US dollars. These days, however, as restrictions on cash are becoming tighter, sophisticated internet banking is becoming the norm.
So, if you are not resident in Singapore how can you access these banking services? Everything starts with opening a basic current, savings or checking account – the basis of your banking relationship.
One of the disadvantages of banking in Singapore is that you will need to go there to open an account. Banking regulations do not permit the opening of accounts by mail, unless the client is already known to the bank. The only possible exception to this is opening an account at one of the many banks in Singapore that send officers to visit their wealthier clients in their overseas homes, or have associated offices in other countries. HSBC clients, for example, may be able to open accounts at HSBC in Singapore via their local offices. The above process, however, is not advisable if banking secrecy is important to you – since it leaves permanent records of your accounts accessible in other jurisdictions. In any case I always recommend visiting at least once so you can get to know your banker personally.
Apart from that, opening your account should be relatively straightforward. There are few complications. If you choose one of the commercial banks such as DBS Bank or United Overseas Bank, a few hundred dollars will be enough to open an account. If you want a higher level of personal service and are prepared to make a higher deposit, let’s say over a hundred thousand dollars or equivalent (bank policies vary widely), contact one of the more discreet private banking operations. I recommend you go for one of the lower profile ones, since they tend to offer the best privacy protection.
A full list of banks operating in Singapore is available on Wikipedia, and you can contact them directly. It is always easier, however, if you have an introduction from a regulated professional who is known to the bank, such as a lawyer, accountant or company formation agent.
My firm can help with that, for example, if you are a Q Wealth member. Membership starts at just $99 per year so won’t break the bank!
In terms of documentation needed to open an offshore account, you will be expected to provide proof of who you are (a copy of your passport), where you live (such as a utility bill) and most importantly of all, proof that the funds come from a legitimate source. For example, if the funds you are depositing were obtained from a real estate sale or from an inheritance, you would show the relevant legal documents to prove this. Finally, it is advisable to take a letter of reference from your bankers at home, introducing you as a responsible account holder. This bank reference may be addressed ‘to whom it may concern.’
Note: Peter Macfarlane is editor of the Practical Offshore Banking Guide, an annually updated guide available free to readers of The Q Wealth Report. If you haven’t got yours yet, sign up today to access this information.