3 Best Countries For Offshore Banking

Even though offshore banking has traditionally been associated with money laundering and fraudulent taxation practices, it has come to be recognised as an essential tool in today’s globalized economy. In this article, we will share with you the three best countries for offshore banking and how corporate bank account opening can open up new payment and banking options that your home jurisdiction might not offer.

The Cayman Islands, Seychelles, and other traditional tax havens

• While these countries might be the most well-known candidates to locate your offshore business account, they also have had the dubious honour of being flagged by the European Union (EU) as non-cooperative jurisdictions for tax purposes. Countries on this list include traditional tax havens such as the Cayman Islands, Seychelles and Panama that have not made the tax reforms needed to conform with the EU’s new standards. While these countries offer high levels of privacy and zero corporate tax rates, they are the main culprit for offshore banking’s ill reputation due to little or no requirements on annual reporting, reducing accountability. With this, it is hard to maintain credibility when dealing with suppliers and customers. Hence, they are not the best countries for offshore banking.
  

Singapore and Hong Kong

• Two better options when opening a business account for foreigners are Singapore and Hong Kong. One commonality these two countries share with the above-mentioned tax havens is a 0% effective tax rate. However, the crucial distinction is that Singapore and Hong Kong are able to attain this through competitive tax exemptions and rebates, and are able to do so whilst retaining a high level of credibility due to the accountability of their banking and financial systems. These stricter requirements on reporting ensure the credibility of your offshore business account and facilitate any business dealings, as well as ensure ease in securing loans from global banks.
• One additional edge they offer is their status as financial and banking hubs. These countries offer high levels of financial reporting standards leading to high accountability and credibility, and also a wide number of both international and local banks to choose from. Singapore offers as many as 150, and Hong Kong is able to beat that number, offering 194 banks. Apart from the luxury of choice they offer, both are also economically developed countries that offer subsequent opportunities to expand beyond just an offshore business account into a full-fledged offshore company. Both countries also possess a well-developed basic infrastructure, especially in terms of transport. This makes it easy to get into and out of the country if absolutely needed, whilst high levels of internet connectivity ensure continued remote access via internet banking services.
• Both countries have a high degree of socio-political stability and economic stability, although Hong Kong has been lacking in the former given the recent riots. Another differentiating factor between the two countries is their dominant language spoken. Singapore’s main language is English, which would make it more comfortable to navigate for native English speakers, although most banking websites are now available in English.
• One caveat of these two countries is the need for directors of a company to be physically present during offshore bank account opening, though this can be mitigated and streamlined by using an agency company such as Tetra Consultants. If this is not an option, or travelling is out of consideration, Dubai remains a viable option for a business bank account opening.

Dubai

• Dubai joins Singapore and Hong Kong on the list of the three best countries for offshore banking as it is also a zero-tax jurisdiction. In terms of financial reputation, Dubai is on par, if not slightly worse than these two countries, and does not carry the same tax haven image as the Cayman Islands or Seychelles.
• The key advantages that Dubai offers are that it does not require company directors to be physically present in order to open the corporate bank account, and it also offers access to radically different geography and market than that of Singapore and Hong Kong. If a large majority of your customers and suppliers are in the Middle East or Africa, it might make more sense to establish the offshore account in Dubai instead. Furthermore, Dubai also has Shariah-compliant banking products available. Other than for these three reasons, it is most likely the case that an offshore account in either Hong Kong or Singapore would be more appropriate instead.

Trouble deciding on the best countries for offshore banking?

Given the availability of these three best countries for offshore banking, it is hard for business owners to choose where to locate their offshore business account. However, regardless of where the account is located, it facilitates banking and payment services and also offers multi-currency corporate accounts which can help to mitigate some of the risks associated with fluctuating exchange prices. Companies should note that if they choose to open their account in a tax haven, it might end up doing more harm than good due to the negative associations of these countries with illicit activities.

Therefore, the choice of where to open the account is crucial and depends heavily on the individual requirements of companies which is in turn based on where their clientele is, and what their business activities are.

Tetra Consultants provides our clients with a fast and hassle-free way to set up a corporate bank account. Our team of dedicated professionals will guide you through the full process, including selecting the best jurisdiction for your company’s offshore corporate bank account, setting up the account, and even offshore company incorporation.

Contact us now and our team will revert within 24 hours.