, Offshore Banking Consultant
Our recent article on How to Open an Offshore Bank Account in Singapore has attracted a great deal of interest and feedback from readers, so I wanted to revisit this theme and talk a little about the differences between Singapore and Panama, two international financial centres we talk about a lot here at Q Wealth. I will also briefly touch on Switzerland. And I will tell you below about three factors you should look for in choosing the best offshore bank for you – in today’s financial environment.
A frequent question is “which is the best jurisdiction for offshore banking?” However, there’s no cookie-cutter answer to this question. What works for one person might not work for another. I tell people that these days, that the bank you choose to work with is actually more important than the jurisdiction. So bearing that in mind, here as promised are three factors you should look for in choosing the best offshore bank for you:
- The bank must have experience with and value international clients. The bank’s management must show a commitment to the international or offshore banking market – for example by opening branches and representative offices overseas, and by knowing how to use jurisdictional arbitrage to the advantage of their clients. Banks that have mainly local business simply won’t have the expertise that is required in today’s highly complex regulatory environment for international banking. Lack of knowledge is dangerous, because banks need to know how to protect themselves in order to protect their clients. If a bank does not depend on international clients, they might simply wake up one morning and decide that your account is more hassle to them than it’s worth. That would be bad news for you
Note: every rule has an exception. In Swiss banking, I always recommend Cantonal Banks. These are strong, locally owned banks that have no presence outside Switzerland. Switzerland must be about the only country in the world where banks that live mainly off the local market generally have sufficient expertise to provide good service to non-residents. Want to know how to open accounts in Swiss Cantonal Banks? Check out this post: Alternatives to Swiss Banks for Wealth Management.
- The bank should offer precious metals dealing services. With the decline in fiat currencies in full swing, every astute investor should have part of his or her portfolio in precious metals. A bank that does not offer gold or silver does not understand the type of clients like you who read this blog – period. More and more banks are offering precious metals bank accounts. I’m grateful to Simon Black of Sovereign Man for this very informative post with a good tip on how to open precious metals accounts in Singapore. Sovereign Man suggests trying United Overseas Bank in Singapore. (The very name suggests that this bank fits our first criteria, adaptability for international clients, doesn’t it?) You can also open precious metals accounts at banks in other jurisdictions: some I know of are Andorra, Austria and Switzerland. My preference is still for banks where you can walk in off the street and buy gold coins such as Krugerrands, the Canadian Maple Leaf coins or the Austrian Philharmonikers. One of the European banks I sometimes refer clients to is actually involved directly in the gold mining business – now that is the kind of bank I like! I won’t embarrass them by naming them in public, but I will say it is one of the banks listed in my Practical Offshore Banking Guide.
Note that this advice kind of rules out Panamanian banks. I like Panama as an offshore business centre. It beats the typical IBC jurisdictions hands down in my opinion. I’ve never recommended it for banking. I always say, ‘take your Panama Corporation and open a bank account in Europe.’ If you don’t know why, find out by reading my Panama Hidden Truths Report that you can download absolutely free right now.
- Choose a Low Profile Bank. Another thing I’ve been telling people for years is not to rely on bank secrecy laws. The recent string of data theft cases has finally rammed this point home to people. Liechtenstein might have the best banking laws and best privacy in the world, but that doesn’t help if a corrupt employee steals the data. In my view the culture of the bank is a lot more important than the legal protections. Let’s compare an international banking behemoth like UBS or Credit Suisse, with a small Swiss Cantonal Bank. First of all, which is more likely to be the target? Of course, UBS or Credit Suisse with all the glossy ads, is more likely to be a target than some small Cantonal Bank that nobody outside that area of Switzerland has ever even heard of. And outsourcing is not a concept known to small European banks, who still have a true privacy culture out of respect for client confidentiality. In banks with privacy cultures, you can still open numbered accounts. These are not anonymous, but your name will not be in the computer system. It will be in a paper file in the bank’s vault. Yes, there are still banks that offer numbered accounts. Again, details in my Practical Offshore Banking Guide.
Of course, there’s a lot more to choosing the best offshore bank than simply the above three factors. But I do believe they are an important part of the decision making process. The bottom line is that these days, you should choose the bank not the jurisdiction. The right bank will be ready to move to another country at the drop of a hat to protect clients’ interests.
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