Offshore Banking – Ways to Perform Due Diligence on Offshore Banks

OK, so you’ve chosen to open a checking account. You have done your research and have actually discovered some banking ‘possibilities.’ They look fine to you, and you appear to be acceptable to them. With that first difficulty over, you need to use some more selection criteria. When picking an offshore bank, there are 2 primary aspects you need to take into account (besides of course privacy and privacy).

Stability – is it a well established, solvent bank?

Quality of Service – are they fast and efficient.


Due diligence and KYB (” Know Your Lender”) is vital. There’s no point in jumping out of the frying pan into the fire.

There is no reason to save your hard-earned money from your taxman or avaricious ex-spouse, only to have it disappear into a virtual black hole when your overseas bank closes its doors. Neither do you want your investment supervisor to churn away your cash on “hot” deals that never ever pan out, however that bring him fat commissions.

These days with the web, it is reasonably easy for anybody to set up a bank. You need a license, however jurisdictions you hardly knew existed, like Montenegro or Somalia, will for a cost, offer all comers with a valid government-issued banking licence. Aim to prevent banking in these high-risk areas as they draw in far too many con artists and dreamers. Prior to investing any money, make sure the bank you are purchasing is run by expert lenders and not by some Eastern European teenager with good web shows and style skills, who simply decided last month that it would pay to be a bank president!

A lot of offshore financial homes seem solid up until they collapse all of a sudden. The Marc Harris Organisation in Panama brought in many customers. Marc Harris is presently serving a long jail sentence in Florida. Swedish-run Bank Crozier of Grenada and St Lucia also seemed highly expert. Paritate Bank in Latvia impressed a great deal of people with ingenious products, versatility and great customer care. Now they are all defunct. They all sank, taking with them their clients’ cash. (Really Paritate is back up and running again, but the old financiers never did get their refund).

Another thing to think about when evaluating internet sites of banks in unique places: Any bank anywhere that appeals to dubious characters will be (sooner, instead of later on) shut down by regulators. You don’t desire your hard generated income to obtain blended in such awful messes. So stay away from banks that explicitly encourage you to conceal your cash.

It is nearly unheard of for huge banks in civilized, well-regulated first world monetary centers like Luxembourg, to be corrupt from top to bottom. However, naturally, even the not likely can occur! That is exactly what did take place not a lot of years ago with the Bank of Credit and Commerce International (BCCI) which was registered in the UK and Luxembourg.

The bottom line is that due diligence is necessary. Most offshore banks are extremely credible, stable, well managed and professional. It’s the ones that are not who get the headlines. But it is essential to ask concerns until you are totally comfortable, and to request for second opinions (from people who know what they are discussing) if you don’t feel totally confident in your very own overseas understanding. Do not believe whatever you continue reading the net or in a glossy brochure. Always request for a copy of the annual report, for beginners, and if you do not feel confident to analyze it yourself, ask a professional such as an accountant or financial advisor. Then, do internet searches on the bank’s name and SWIFT code, that must bring up any unfavorable remarks or participation in dodgy deals.

Quality of Service.

” Various strokes for various folks,” they call it. You would marvel how quality service suggests such various things to different individuals. To some, it might be a friendly old Swiss banker who will purchase you lunch, provide you a good golf umbrella and chat for a couple of hours. He will wish to find out all about your financial, service and social scenario.

Other people might prefer a lender who just does as he is informed and never suggests that you have any individual conferences. You might choose it if your banker does not even know exactly what you look like. Maybe all you desire is a good web user interface so you can wire cash in or out in the middle of the night if you want to, with very smooth technological effectiveness.

Some individuals like it that their individual lender knows and trusts them enough to move six or 7 figures based on a single call or e-mail. This would surprise other of my clients who want to visit first through a 5 step encrypted security system with three passwords plus a one-time code generator operated by a 6-digit PIN in order to give instructions!

Purchasing banking services resembles purchasing other services. You can take a look at sites and pamphlets, speak with individuals. How quick and effectively do they react to telephone call and emails? That is constantly a good indicator. I have actually handled banks who will reply to e-mails in a foreign language within five minutes if you e-mail them in the middle of the night their local time, and others who simply definitely never respond to email, or who define on their websites that they will respond “within five service days.” Well that rather beats the object of emailing, doesn’t it?

Baur on WSJ,, absolutely nothing is permanently. If you receive bad service or hear any rumours you don’t like, you can take out instantly. A minimum of you must have the ability to. That’s something worth checking too!

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