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An easy way to bank in the Channel Islands

June 22, 2010
Oxford, England

In our daily conversations, we talk a lot about planting multiple flags– this is the practice of diversifying sovereign risk in order to protect or asses and our assets.

After all, sovereign risk is the greatest risk we face today as investors, entrepreneurs, professionals, and free individuals. Governments have absolute authority to seize, commandeer, or otherwise control any asset of their choosing, including ourselves, and they can back it up at the point of a gun.

If you have all of your eggs in one basket– i.e. you live, work, invest, own property, run a business, bank, etc. in the country of your citizenship, then you’re risking everything. If you want to do something about it, then you only really have two options:

First, you could go dark… and I mean completely black. There is some merit in this approach, but it’s incredibly tricky to pull off in the long-term.  Going off the grid in 2010, at least in a developed country, requires intense discipline and adaptive creativity.

The second option (my favored approach) is to use the system to your advantage. Play governments against each other by diversifying different aspects of your life across different geographies– plant multiple flags.

As an example, this means structuring your business in one country, banking in another, having official residency in another, having citizenship in another, and investing in another. It might sound complicated on paper, but I assure you in practice, once you get the hang of it, it’s quite simple.

When I write this daily letter, I normally stick to the major areas of planting flags– banking, brokerages, citizenship, residency, property, etc., but when you really sit down and think about it, there are literally innumerable ways of diversifying yourself geographically.

Some people may choose certain jurisdictions for shopping, for example (a country with no VAT, or a state with no sales tax). Others may choose certain countries for dental care (due to the value for price), others for hiring outsourced labor (due to high skills and cheap wages), and others for acquiring pharmaceuticals (due to price and legal differences).

The possibilities are nearly endless, and just about every country has something it can offer.  As I find myself in the UK this week, I thought I would raise this point again by taking you through my own analysis of the country:

Would I establish tax residency here? No. I wouldn’t want to get involved in this country’s slippery slope of a tax net.

Would I store gold here? No. Scotland Yard has already established a trend of raiding private vault facilities and confiscating the contents.

Would I establish electronic assets here? No. The UK has little regard for privacy, and this is one of the most critical elements for electronic assets like an email or web server.  Digital property should be located in a country that respects privacy and won’t bow to a foreign court to lift this veil.

Would I intentionally seek medical or dental treatment here? No. Public hospitals in the UK are substandard, and the private facilities are too expensive compared to Asia and Latin America.

Would I invest here? Yes. But with my eyes wide open and protective measures in place. There are significant risks to investing here, including rising taxes and a depreciating pound. Foreign exchange losses can be mitigated with options and forward contracts.

I’ll have a deeper analysis about British investments in a future letter because it’s an important topic.

Would I spend time here? Yes, definitely. To me, the greatest value of the UK is for planting a flag that I seldom talk about– countries that you go to just because you like to have fun there.  After all, what’s the point of life if it’s all about business, investing, asset protection, and sovereign diversification?

I, for one, derive great pleasure in experiencing the finer things in life, particularly in the course of travel… and there are certain places that I simply just like to be.

For all of its faults, southern England is one of these places for me– specifically London and Oxford.  And right now, it’s on sale. Given all the deep retail discounts, and with the Queen’s pound sterling under $1.50, England is cheap for US tourists and “ridiculously cheap” for Canadians and Aussies.

Call this a ‘fun flag’ or a ‘pleasure flag’ or ‘vacation flag’ or whatever floats your boat… but think about these places where you can get away and do nothing but enjoy life for a little bit.

Lastly– would I bank here? No. There are too many quasi-state owned zombie banks in this country. There is, however, an interesting alternative that I’ve investigated a bit in my time here.

The UK’s famed Lloyds Banking Group has a subsidiary in the Channel Islands called Lloyds TSB Offshore, Ltd.  Lloyds wouldn’t be my first choice– there are better banks out there… but if you’re really looking to open a foreign bank account and are constrained by travel limitations, consider Lloyds TSB Offshore.

I say this because you can apply to open an account online and denominate funds in either US dollars, euro, or British pounds. They’ll even send you a Visa debit card that can be used worldwide to access funds… no need to show up in person.

Our goal is simple: To help you achieve personal liberty and financial prosperity no matter what happens.

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About the author: Simon Black is an international investor, entrepreneur, permanent traveler, free man, and founder of Sovereign Man. His free daily e-letter and crash course is about using the experiences from his life and travels to help you achieve more freedom.

Comments on this entry are closed.

  • Noname

    Hi Simon

    what do you think about a residence flag in channel islands(sark)?
    About the banking option wouldnt it be better Hsbc or Natwest as they have a branch in sark?

  • Dan

    Hi Simon

    Any specific reason you refer to the Channel Islands (Jersey & Guernsey) as opposed to the Isle of Man? My personal preference is the Isle of Man as there is at least some (though limited) deposit insurance there. As I recall there is no such deposit coverage in the Channel Islands.


    • http://www.facebook.com/offshore.bank Peter Macfarlane

      I would not rely on any government backed deposit insurance. There is no substitute for proper due diligence on the bank and its owners. I think the bank you choose is of much greater importance than the jurisdiction where it is based. With particular reference to the Isle of Man, looked at the disaster surrounding the failure of Singer and Friedlander there: http://www.financialtaskforce.org/2009/07/28/dont-bank-on-the-isle-of-man-the-musical/

  • Mike


    I almost opened a bank account with Lloyd’s TSB but they are incredibly difficult to produce a document they deem worthy as proof of your residential address. So I switched to HSBC in HK and had no trouble opening an account right away, but do you think HSBC account in HK is better than a Lloyd’s account in the Isle of Man?

  • Knowledge Is Golden

    Hi Simon, here’s a plethora of information/questions/comments.
    Multiple flags: banking in Austria, Goldmoney account in Channel Islands (BOScotland is where money is banked by Goldmoney before customer commits to gold purchase), gold stored by Goldmoney in safe in Switzerland.
    I’m getting signals that Austria’s bank lending to Eastern Europe has put them in jeopardy. Some Austrian banks are tied in with Italy and its latest credit woes. Euro land is diluting the value of the Euro by printing extra to bailout neighbors.
    Elliot Wave says that we should be preparing for deflation. EWI says that the stock markets are ready for another plunge. They say when markets plunge, gold follows it down.
    So, if I want to move out of Austrian bank exposure, I can transfer to Goldmoney account and either park it there in Dollars or convert to Gold and store that in Switzerland. But if gold is really going to follow the market down, I’d be buying at the top now.

    What’s your feedback?

  • Brad

    So… is a GoldMoney account in the Channel Islands a relatively safe haven to store deposits or are deposits here vulnerable to seizure by UK authorities? Does purchasing gold in the GoldMoney account change that circumstance. Does Goldmoney really store their holdings in Switzerland? If so, and assuming one has converted all GoldMoney account liquidity (currency) to physical gold holdings, are those holdings safe in Switzerland or still vulnerable to UK seizure/freezing by virtue of the account’s being domiciled at GoldMoney (Channel Islands).

  • Bernard

    Hello Dear Simon,

    Can you update on banking in Andorra as well as your opinion, my uncle is very happy with his relationship and they offer a lot of privacy as well as multi currency you have to go there to open an account.
    I do have dual citizenship US as well as French my uncle check for me and they will open and do business with US citizen and will not report anything back to the US.

    Thank you for all your great information I hope we can have your comments on Andorra.


  • Netsamir

    Hi Simon,

    The EU Saving Tax Directive with automatic exchange of information. You did not say anything about it for EU residents.

    Open an account in Europe for European is quite dangerous, and at least you will pay tax through withholding.



  • Louis Lupz

    Don´t forget about http://www.offshore.hsbc.com, they´re pretty good

    • Bob

      HSBC is pretty solid, but be aware that these folks are very aggressive when it comes to sharing information with every government, especially the US government. Normally, HSBC will have you sign something which allows them to convey account info to your home country government, even if there is no formal country-to-country agreement in place (something to ask your HSBC banker, so be aware).

    • RMB

      Love HSBC offshore but just remember FBAR and June 30th for any U.S. citizen.

  • Netsamir


    Additionally to the European Saving Directive, there is the Tax Information Exchange Agreements (TIEAs) set-up by the OECD.

    Note that the USA has signed an agreement with many countries including Isle of Man, Jersey, Guernsey:


    However, despite the fact that there were no agreement between the USA and Switzerland, USA will manage (if not yet) to get around 5000 names of US citizens who have an account at UBS.

    Could you please comment on that? Or are you just throwing us to the lions? And by looking to protect our assets we are committing a big mistake, hiding an off-shore account that will be discovered after little while?

    Opening an account off-shore is not difficult… what is difficult is to deal with all these Directives and Agreements and stay out of the radar. One solution might be to get an Off-Shore company. That sounds good but here you are with a complex set-up. What type of company do you open? In which jurisdiction do you open it? Do you open a company in Seychelles (such as an IBC) with the uncertainty of the political system? Or in Singapore? Or in Uruguay? Paraguay? Panama? Which banks will open an account for an Off-shore company if you are not introduced (Introduction cost money). How is it possible to open an Off-Shore Trading Account, or GoldMoney,… for an Off-Shore company? Not to mention that at certain point of time you will need an Attorney. Where do you get someone with that deep knowledge that will spend some time with you? What amount of money it is worth to protect with such an expensive set-up? I remember that you asked 20000 USD just to have an appointment with you to discuss a good set-up.

    Thank you and best Regards,


    EU Savings Directive Table :

    Latest news on UBS :

    • http://www.facebook.com/offshore.bank Peter Macfarlane

      Simon has always emphasized you should fully declare your offshore accounts and not rely on bank secrecy. So you cannot accuse him of throwing you to the lions if you open an offshore account and don’t declare it.

      Depending on your residence and citizenship there might be ways to legally avoid reporting requirements. The very best one is to change your residence and/or citizenship to countries that do not require reporting. If you take your time, that is something you can achieve at relatively low cost.

      Other solutions involving companies, trusts etc might work but frankly yes they are expensive, and second rate compared to good citizenship and residence planning. You have to look at the costs and benefits to decide if it is worth it in your case. Freedom is not free!

  • Mark

    Hi Simon,
    You mentioned: “Would I establish electronic assets here?”. No.

    What would be a good jurisdiction for electronic assets?
    Privacy, Security and speed of the internet infrastructure so that a server can be established.

  • Reggie Chan

    Hong Kong is way easier and cheaper. You can have multicurrency accounts with easy wire transfer capability and the monthly charge is a meager HK$60/month, which is US$8/month

    • Bob

      Reply to Reggie Chan,

      And you are indicating that it is possible to open an account in HK via snail-mail or online? Please provide some web links to several HK banks where this is possible.

      • Chris

        Type your comment here.Did you get any information on opening HK bank account on line or via snail mail?

  • http://blog.greedandfearindex.com Wille

    Mike raises an interesting question, especially for permanent travellers:
    How do you open a bank account or register a company, if the banks “Know Your Customer”-procedures requires proof of address, such as a utility bill, but you have no utility bill to produce?

    • http://www.facebook.com/offshore.bank Peter Macfarlane

      You simply tell the bank your problem and ask them for a solution. Any decent banker knows how to comply with regulations by accepting some other document instead. If they don’t, it’s a sign you should not deal with that bank.

  • Dirk

    Dear Simon,

    this is my first comment to your blog, which I have been following with growing fascination over the past few weeks.

    I live in Ghent, Belgium and would consider its excellent and cheap medical care and its fun factor (food, bonhomie, nightlife) major pluses in view of planting flags.

    Underwhelmed though by most of western Europe (especially Belgium) when it comes to tax and other financial burdens, I have become inspired by your diversification tactics but wonder exactly at which tipping point it really becomes worthwile to pursue each flag.

    I would like to know if you could recommend a certain threshold over which it becomes interesting to start looking elsewhere: do you have any figures in mind? Do you consider any “minimum” asset value or financial wealth?



  • Miry

    Dear Simon,

    Any advise on Anglo Irish bank offshore? Are they are going to go bust? Should I pull my money out or should I transfer it to another bank offshore?

    Thank you,

  • Jim Rich

    Looking for a safe haven for currency / precious metal exchanging and ownership check out GoldMoney.com in the Jersey Isle on St. Helier. I have used this service for some years and have been safely satisfied. Jim Rich, PhD

  • http://www.thaiexpat.info/ expatudon08

    its very nice to have spare cash to salt away these days but i just feel all we do when we save with the banks is only really help them to help themselves to every single cookie in the jar and then bill you for the jar

  • Rsrafferty

    Simon, I was curious if you knew anything on the ease and financial plausibility of opening a bank account in Brazil as an American citizen and/or foreigner. I am an American and plan on spending some time in Argentina and southern Brazil. I have been before, however, I never really looked into that possibility. I also looked into opening a World Currency cd in Reales (Reais) but I would feel more secure having the money in Brazil. Could you tell me what you know? Thanks for the time and consideration. -Ryan

    • Sgilmo

      Hi I live in Brasil , not possible for you to open a bank account unless you have permanent visa, or in the process ( with protocol number ) of establishing.

  • Jeff

    Can anyone provide suggestions on how to open a bank account in Austria? I have a Delaware LLC that I would like to open an account for. I’ve approached to separate banks in Austria that to me appeared geared towards this, and both have stated it is against their policy to open these accounts. Any thoughts or suggestions will be appreciated.

  • nomadcapitalist

    Lloyd’s no longer allows US residents to open accounts, unfortunately

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