« Canada crackdown on Gold Economy | Home | Grandpa on the USA Housing Crisis »
Why don’t Offshore Banks want business from US residents?
By admin | June 11, 2008
That’s a question I’m frequently asked by my readers and clients.
The answer is “regulatory risk.” It’s simply impossible for most offshore banks to comply with American requirements, while keeping in line with their policies, their local bank secrecy laws, and what their customers want.
Of course it’s not that they don’t want the business. It’s that they simply judge it’s not worth the risk to accept the business.
Fortunately, it’s not too difficult to avoid these restrictions and make sure both client and bank are legally covered. Here are three ways of doing it:
1. The simplest is by using an intermediary entity, like a Panama corporation. You simply open the account in the corporations name and, hey presto! Your investment is no longer American, but Panamanian, so a whole (simpler) set of rules apply. This intermediary entity might not make the slightest difference to your tax liability in the USA, but it makes all the difference for your offshore bank.
2. Have the offshore bank manage your portfolio. This means you are not sending instructions directly from the US. You visit the bank in its home country and leave the bankers in charge of the money. That way there is no way anybody can claim the bank was soliciting American business – again, the bank is covered legally.
3. The third option is to find a small private bank with so few American clients, that they are really not on the US radar. As long as they know you, and your investment is of a reasonable amount (say, over $100,000) they will probably open the account. You still won’t be able to trade US markets, but you will have access to any other world markets. I can make referrals to suitable banks which will accept US citizens if necessary. There are also some issued in my Q Practical Offshore Banking Guide 2008
Sphere: Related ContentNo related posts.
Topics: Banks and banking offshore, Currencies and Cash | No Comments »
Comments
You must be logged in to post a comment.