Back in 2013 we have started offering offshore company registration service. We called it “complete service” back then, because it included everything and required very little paper work. By everything I mean, incorporation of a company somewhere in Panama or Costa Rica, bank account opening and sometimes even credit card processing for the client. Offshore banks were not customer-friendly that time – almost non-operational internet banking and unjustified fees. So instead, we would go for banks in western Europe, which provided IBAN accounts, good customer service, online banking and moderate fees.
That time was a privacy dream. One could register an offshore company fully anonymous via nominees service. Then get a fully operational European corporate bank account along with VISA/MasterCard. And the most important thing is that you should not be a millionaire for that. Many people have prejudice that offshore corporations are synonyms to something illegal – money laundering, corruption etc but in reality offshore corporations were vital for businesses who needed access to international markets and of course, for the taxes.
Then EU regulations started to become more strict. Besides the fact that European banks got fined harshly for money laundering and KYC failures, EU did not like they were getting zero in taxes. Banks were the ones who benefited the most. So, banks had to become rigorous at KYC and various document requirements – verification of business activity transactions, contracts, CGS etc. You had to provide more docs and fees increased a lot and every year it was becoming more and more difficult to open a bank account for offshore company. Starting from 2018, EU banks started getting rid of offshore corporations. And the thing is that mostly small legal operations suffered, while big corporations and those who were laundering millions were still fine to have an EU bank account for offshore corp. Why do we know this? Because in 2021 Latvian banks were fined again for money laundering mainly serving non-resident corporate clients.
As of now, I would say that it’s nearly impossible to open a bank account for offshore corporation. Yes, we know that still many companies advertise it but in 99% of cases you will be left with spending several thousands dollars and getting offshore company registered then stuck in the infinite process of opening and searching for a bank account. No one can guarantee you to open an account for offshore company today. If they say so, it’s most likely not true.
What about 1%?
This 1% is fintech companies. Some of them can still work and open accounts for offshore businesses. The risks are obvious – they are less regulated and they can get scammed suddenly. Recent example is an ePayments case, which had FCA license but got shut down in 1 day and people got their money frozen forever. So, if you decide to go this way, make sure to this fintech company has long record of operation and can be trusted. But even in this case, you cannot afford to keep sum of money bigger than operational expenses.