Many people choose to open a foreign bank account as a matter of convenience. This is especially true for anyone who travels regularly, or who maintains property in more than one nation. In many ways opening a foreign or offshore checking or savings account is not very different from opening a domestic account. The key to the process is understanding the banking laws that apply in the country where the account is located, and what is expected of the account holder in terms of maintaining the savings or checking account.
To begin the process of opening a foreign bank account, the depositor should look closely at the policies and regulations that the potential bank observes. Compare those closely with the banking laws relevant to that country. There are situations in which a banking concern may make certain claims that are not in harmony with those banking laws, indicating that the bank may not be in a position to honor those claims. Focus your attention on foreign banks that structure their operations so they are well within the applicable banking laws, and this will minimize the chances of depositing money with an institution that does not look after the depositor’s best interests.
Determine whether the bank must collect taxes on the balance of the foreign bank account. In some nations, taxes are assessed on accounts opened for non-domestic bank customers, while others have no provisions for taxing those balances. This is important, since it may be necessary to file some type of tax report with a foreign tax agency, as well as report the account balance to your own domestic tax agency.
Consider the available options for communicating with the institution regarding your foreign bank account. Ideally, you can manage the account online, with the use of unique access codes. The ability to bank by telephone is also important, especially if you travel a great deal. Ask how long transactions take once they are submitted. Often, they are completed the same business day, but there are certain transactions that will take several days to complete. Should the account offer a debit card program, specifically ask about any fees that may apply when using the card in a non-domestic setting. In some cases, the fee may be quite substantial.
Once you have identified the bank that offers the structure and services desired, turn your attention to the application process. Be aware that some banks will require little in the way of personal information, while others will request a great deal of data as part of the application process. Determine in advance what information is required, and have it on hand when you begin the application process. Many foreign banks accept applications online or by telephone, while others require that the foreign bank account is opened in person. In situations where you cannot be present to open the account, contracting with an agent to handle the process is a possible solution.
Keep in mind that even once the application is submitted, it may take anywhere from a few days or a few weeks to set up the account and forward the information to you. For this reason, don’t assume that a couple of hours one afternoon will be sufficient for establishing the foreign bank account. If the goal is to have the account in place for an upcoming trip, begin the application process at least six weeks in advance. This will allow time to make sure everything is in order and that you will have access to the account balance when and as needed.
