KNOWLEDGE BASE

OFFSHORE BANKING

Selecting an Offshore Bank Account

Introduction Safety. Will my money be safe with an offshore bank? Private Banking Clients Expatriate Clients International Commercial Activities Matching Clients to Banks Bank Charges and Interest Rates Our Recommendations. The banks we work with

INTRODUCTION

For over 35 years OCRA Worldwide has been assisting clients to establish and administer offshore and international bank accounts and has developed useful expertise in identifying and working with suitable offshore banks and international banks. By the very nature of our business we are exposed to a wide range of offshore banks and international banking activities and we aim to learn from these experiences.

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SAFETY. WILL MY MONEY BE SAFE IN AN OFFSHORE BANK?

The factors to consider include:

  • The political and economic stability of the jurisdiction(s) in which a bank is head-quartered, located and regulated
  • Reputation and substance - Standard & Poor's, Moody's and Fitch rating reports are useful
  • Quality of regulation and access to deposit and investor protection and insurance schemes
  • Parent company or similarly guarantees
  • The business focus of the bank

In general the banks we work with seek to provide services to some or all of these types of clients:

  • Private banking clients.
  • Expatriates.
  • International commercial activities, such as trading.

These services are provided from both offshore banking and international locations.

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PRIVATE BANKING CLIENTS

Although private banking is not a simple business, there is a very simple business model to keep in mind: "keeping rich people happy". The definition of "private banking" varies from bank to bank but is generally taken to mean investment management offered on a personalised basis by a bank to an individual with disposable wealth of more than $100,000 (although some banks do not offer private banking services to clients with disposable wealth less than US$ 500,000 or US$ 1 million). Private banking is obviously not synonymous with "offshore", but the costs of a personalised relationship begin to be worthwhile at the $100,000 + level in the light of the superior gains to be realised from offshore investment. Private bankers probably prefer themselves to be approached and considered as objective financial advisers rather than as an investment-provider, and consequently private banks may not be the most effective choice for a reasonably sophisticated investor who wants to play an active role in the management of his investments.

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EXPATRIATES

Numerous offshore banks have sought to specialise in the provision of banking services to expatriates as they perceive such business as being relatively risk free, easy to "systemise" and profitable. In essence, expatriate services encompass managing accounts for people resident outside their home countries who may or may not be employed. The focus of expatriate banking providers is online banking, call-centres, relatively low levels of expertise and the provision of "packaged" investment and protection products, such as life insurance. Whilst the service offered should be professional and "smooth", the relationship between an expatriate client and his expatriate banking provider could not be characterised as personal or in any way similar to the relationship between a client and a top-flight private bank.

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INTERNATIONAL COMMERCIAL ACTIVITIES

Many of our clients utilise the companies we administer for commercial purposes, such as trading. In such circumstances an offshore bank that specialises in private banking or expatriates will be unsuitable. Our commercial clients seek similar services to an onshore commercial bank and will require access to some or all of the following services:

  • Cash management
  • Foreign exchange and treasury services
  • International trade - letters of credit, documentary collections, cross-border guarantees and global banking services at locations around the world
  • Risk management: foreign exchange, interest rate, equity and energy price risk management tools
  • Financing
  • Payment, receivables and payroll solutions
  • Selling solutions: point of sale, e-commerce and merchant programmes
  • Speciality solutions, such as dealer, shareowner and fund services
  • Expertise in matters such as energy, aviation, shipping or real estate

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MATCHING CLIENTS WITH BANKS

We know that once we understand our clients and their business objectives we will be able to assist our clients in identifying a suitable bank to work with. Some of the aspects we consider are:
  • The nationality, residence and domicile of our client. Banks often have policies that deny, restrict or place conditions upon certain classes of clients from having access to their services, and these policies change from time-to-time.
  • The proposed activities of the client company or trust that we administer.

  • Opening deposits and minimum balance requirements - these can be surprisingly large.

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BANK CHARGES AND INTEREST RATES

The availability or otherwise of online bank statements and reports. We have considerable expertise in assisting clients to establish relationships with reputable offshore banking institutions as well as a wide range of international banks.

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OUR RECOMMENDATIONS. THE BANKS WE WORK WITH.

Over the last 35 years we've developed close working relationships with many international banks. In selecting a bank, clients should consider service, credit worthiness, reliability and competence.

All of these banks provide the high-quality service that our clients expect:

  • Alpha Bank - Cyprus
  • Barclays Bank Plc - London
  • Barclays Bank Plc - Mauritius
  • Barclays Bank Plc - Seychelles
  • Credit Suisse - Switzerland
  • Dexia Banque International a Luxembourg SA - Luxembourg
  • Hellenic Bank - Cyprus
  • HSBC - Hong Kong
  • HSBC - Malta
  • Nationwide International Limited
  • Prudential-Bache International limited - Monaco
  • RZB Raiffesisen Zentralbank Osterrich AG - Austria
  • Societe Generale S.A. - Geneva
  • Union Bank of Switzerland - Switzerland
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professional advice. OCRA Worldwide does not accept any responsibility, legal or otherwise, for any errors or omission.