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Choosing An International Banking Jurisdiction

International Banking 

“When choosing an international bank, you have an important fundamental distinction to consider,” explained an attorney friend in his “International Banking Tricks And Traps” presentation for the group assembled for our Emergency Offshore Summit in Panama City this morning.

“Does the bank have offices in the United States…or not?

“It’s a trade-off. A U.S. office typically means faster response time and more convenient service. On the other hand, it also means that the IRS could levy the account and that civil creditors could sue the bank or attach your account.

“By choosing an international bank without an office Stateside, you’re allowing for maximum privacy and security. At the same time, an international bank without any U.S. presence won’t provide you with U.S.-compliant reporting, meaning your tax filings will be a little more complex.

“The other key consideration when choosing an international banking jurisdiction is your own agenda. What do you want the bank account for? Will it serve as an operating account (in a country where you have a rental investment property, for example, and therefore need a way to pay local bills)? Or are you looking for a bank that will manage an investment account for you? These are very different objectives, and a bank that would be a good choice in one case could make no sense whatsoever in the other.”

Once you’ve decided you want to put your money with a bank that has no offices in the United States and that will provide investment management services (for example), how, then, do you choose a jurisdiction?

In his presentation for our group this morning, he compared and contrasted key jurisdictions from Andorra to Jersey, from Hong Kong to Switzerland, from Belize to Nevis, and from Panama to the Cook Islands, making specific bank recommendations in each case.

Then he reminded our group of a few fundamentals:

  • First, never miss an IRS filing deadline…
  • Always declare the beneficial owner of an account on the bank form…
  • Be honest with your bank regarding the purposes of your account and the nature of your business…
  • Consider opening several smaller accounts with different banks, to further your diversification…

Kathleen Peddicord

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