Having money outside of your home jurisdiction in an international bank account is an absolutely crucial part of having a solid internationalization and diversification plan.
But don’t just open any bank account. And don’t rush into it without thinking of a few important matters beforehand.
In this short video I elaborated on 4 facts you should know before opening an international bank account.
Feel free to have a look at my Ebook on Offshore Banking for Individuals and other Solutions 2022 here.
If you want to remotely open an international bank account in Panama more information here.
If you want to remotely open an international bank account in Georgia more information here.
To a World of Opportunities,
The Wandering Investor
Full Transcript of 4 things you should know before opening an international bank account
Hi, Ladislas Maurice from thewanderinginvestor.com. Today, I shall discuss four points that you should know before opening an international bank account.
1. Where should you open an international bank account
The first one is where should you open such an account? There are many jurisdictions in the world, and they all have their pluses and minuses. And it’s important to choose one that is right for your own needs, including which bank. So, how much money do you want to deposit? Where do you live? What is your citizenship? What do you want to do with that money? Do you want to just save the money, just keep it? Is it a transactional bank account where you’ll actually use it on a regular basis, use the credit card, or the debit card? Do you want to buy products that they’re selling? Do you want to trade stocks, because some banks offer trading platforms? And then, lastly, where are you going to be sending money to and from?
You don’t just wake up one day and say, “I’m going to open a bank account in Georgia.” It’s, well, what are you going to use it for? And if, for example, you do a lot of business with Africa, then don’t open a bank account in Georgia, because Georgia just won’t want to hear anything about money coming from Africa. For that, you’re better off going to Mauritius, or opening a bank account in Dubai, or, in some cases, as well, in the United Kingdom.
2. Don’t try to hide your money
Two, don’t try to hide your money, those days are long gone. If you’re American, with FATCA, forget about it completely. If you’re not American, most countries signed up to CRS, it’s the Common Reporting Standards, which means that most countries in the world share, on a yearly basis, all of the information on your bank accounts in their jurisdiction with your country of residency. Not all countries have signed up, most notably Georgia and Armenia, but gradually, they will join over the next few years. It means that if you have a bank account in these countries and you weren’t declaring the money, then, suddenly, your information will get disclosed to your home government and you’ll get busted for tax evasion. So, don’t even try to play this game.
What some people do is, for example, they live in Germany, they’re tax residents of Germany, but they happen to have a residency card of another country, let’s say, of Colombia, or of Mexico, and then when they open their international bank account overseas, they give the residency card from another country. And then they think that the information will get shared with that country and not with Germany, because, again, CRS shares based on tax residency and not citizenship.
Theoretically, though it’s illegal, you should be able to get away with it. But the problem is that a lot of these banks, especially the ones in the Middle East and Dubai, use extremely cheap labor in their back office. Actually, most banks do that, they use cheap labor in their back office. And then these people invariably mess up everything. So, the whole thing with you being a citizen of Germany and residing in Mexico, guess what, once the CRS data gets bundled, someone along the value chain will have messed up and your information will get shared with Germany, though it was not supposed to. It’s a very dangerous game to play. It’s not only illegal, but the odds of getting caught are extremely high. So, don’t even try to entertain that thought.
3. Understand your obligations back home when you open an international bank account
Third point, you need to understand your obligations with regards to your country of tax residency. Some countries require you to disclose all of your overseas bank accounts and assets on a yearly basis. For the US, this applies based on citizenship. There’s a bunch of rules on this, you want to look into this. For people from other countries, you want to look into your country of tax residency and understand what are the disclosure rules. Because, again, if you don’t follow these rules correctly, then you can get busted for tax evasion. This is not tax advice. Please, do your own research.
4. Approach the bank in a clear way
Number four, when you approach an international bank, have a clear story. If you just show up and you’re like, “My name is Sharif. I live Spain. I want offshore bank account. Here is my WhatsApp.” If that’s the sort of email you’ll be sending to the banks, you will absolutely not get a response. You want to build a case as to why you want to open a bank account with them, and what you plan on doing with the money there, and how much you plan on depositing in their bank. You need to come across as serious because you don’t have a right to open a bank account at any of these banks. They only let you in if they want you. If they just get a whiff of unprofessionalism or dodginess, they will not take you in. Be very clear, focused, transparent when you seek to open such bank accounts.
Internationalization & Diversification Consulting
This is the sort of discussions that we have with our consulting clients in the internationalization and diversification consulting sessions. We don’t just discuss banking, but we also discuss international real estate, investments, residencies, citizenships, etc. We go really in detail in terms of what is acceptable, what is possible, what is not, what should be avoided, and what are some mistakes that are commonly made and that people should absolutely not make. This is really, really important because, often, people decide to build an international lifestyle and they just make mistakes that they could have avoided if they had talked to an expert before. And mistakes can be very, very expensive.
If you’re interested in knowing more about opening an international bank account, whether in person or remotely, I have an e-book right below, you’re welcome to have a look at it. It’s very affordable for all the information that’s in there. And if you want to open a bank account in Panama, or in Georgia remotely, there is a link through those service providers that can help you with this.
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*a consulting session is a discussion about your portfolio and objectives. It does not constitute legal, financial, tax or investment advice.
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I hve dual citizenship in U.S and Malta actual citizenship in Malta. i inherited a small piece of property from my dad over 20 years im splitting with my cousins. My attorney in Malta is super intelligent the tax is low in Malta i have passport , id and im considered a local. It was small property from a long time ago and we all want to just sell. I have a basic checking account in Malta but one thing i heard my attorney say is ” the problem is how to get it out” i dont mind leaving any money there in malta but we are trying to become and will be permanent residents of Panama. Do i leave in malta or can i bring to Panama both including U.S all scare me. I don’t know what to do with money i just want to sit with it until i can find something in Panama to help me build a big business or something. I live and work in U.S. but I work 24/7 365 and housing food is better in Panama. Its nit a lot but its beter than nothing. I have to pay taxes in Malta i knkw but i really dont like U.S banks and besides i want to be in Panama and will be openkng an account there. Nkw there is issies im reading EU (malta now part of E.U) to Panama
The easiest option is to get the money sent directly to the US from the lawyer’s or notary public’s escrow account. If you just deposit the money on your Maltese account and a year later ask for the money to be transferred to Panama, you will have major issues. It’s best that the money comes to the US clean from an escrow account, with all the appropriate documentation, and then sent to Panama once you are set-up there.