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SOVEREIGN MAN

A simple shortcut for a foreign bank account

Thanks to completely draconian US-led regulation, opening a bank account anywhere is about as fun as a barium enema.  Opening a foreign bank account can be an even greater nightmare.

Most of the time, a foreign bank will want you standing there, in person, to open an account, as well as to provide a seemingly endless array of notarized documents, stamped papers, and letters of reference.

Trust me, it’s not their preference either… in order to keep from being blacklisted by the OECD, though, banks have to resort to this level of bureaucracy.  They’re called “Know Your Customer (KYC)” rules, and the idea is to over-collect personal and financial information in order to determine that a bank customer is not a terrorist.

Anyone with half a brain can see that this is one of the stupidest notions in the world.  It’s like locks on a door– if someone wants to break in, a pithy little lock is not going to stop him.  Similarly, if a “terrorist” (I hate even using that word) wants to open a bank account, an avalanche of paperwork is not going to stop him.

As an example, I would point to accused arms dealer Victor Bout who currently sits in prison right here in Thailand; Bout was placed under US and UN sanctions back in July 2004, and yet he was still able to register numerous Delaware companies with bank accounts.

All the KYC regulations do is make it much more difficult for everyone else.

In our regular conversations, we’ve talked about the importance of having a foreign bank account… it is an essential flag to plant overseas, and you want to really consider low-tax jurisdictions with a strong, stable financial sector that have a history of not plundering the banks.

This includes places like Switzerland, Hong Kong, Singapore, Panama, UAE, Qatar, and a few others.

Many people understand the need to move some money out of their home country but are simply unable to take a far away trip just to open a bank account.  If you’re one of these people, here’s an easy back door. It’s less than ideal, but it works.

The first thing you need to do is pick your banking jurisdiction, i.e. Hong Kong, Singapore, etc. and then find a large multinational bank in that jurisdiction that has a branch near you.

As an example, I will use Hong Kong and HSBC… though there are other jurisdictions and banks that you could use as well (Standard Chartered, etc.)  HSBC is a good example because it has a presence in more than 60 countries, and you’d be hard pressed to find a civilized place that does not have a branch.

Among HSBC’s many branches are offices in Los Angeles, Miami, Vancouver, etc. So first you call HSBC in Hong Kong, explain that you are a foreigner, want to open a bank account, and would like to certify all the paperwork through your local HSBC branch.

The HSBC rep in Hong Kong will fax you all the appropriate paperwork, and when you have completed the documentation requirements, you should get in touch with the nearest HSBC branch in your home country and make sure they have “international banking services” available.

Let’s say you live in Orlando… that means you should head down to Miami, and the Miami branch will validate all the documents on behalf of the Hong Kong office.

Afterwards, the Hong Kong office will receive the documents and finalize the account opening.

This is the fastest and easiest way to open a foreign bank account without actually having to fly to a foreign country and go through the process on the ground.

The obvious disadvantage is that many people do not want to deal with a large, multinational foreign bank like HSBC, Standard Chartered, etc. I agree; it’s better to deal with a solvent local bank that does not have a large international presence.

However, unless/until you are able to get on a plane and fly to Asia, Europe, or the Middle East, this is one of the best and most cost effective interim solutions.

To be clear, even though you are opening it through a local branch in your home country, the bank account will be considered foreign and based in the offshore jurisdiction that you chose. If you are a US citizen, this obliges you to file US Treasury form TDF-90-22.1 by June 30 of each year.

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.

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Comments on this entry are closed.

  • Jai

    As I understand it, you only have to file the US Treasury form TDF-90-22.1 by June 30 of each year if aggregate balance of the account(s) is more than US$10,000 at any time during the year. Smaller foreign accounts still have to be reported on tax returns, but not the on the separate “big form.” For, say, a small biz operating account or a personal wage-worker account, where much of the monthly income goes back out for expenses, you might not hit that $10,000 for awhile.

    • LookingToLeave

      It also seems like, in case you have the ‘problem’ of getting too close to $10,000 in balances, you could take out a few thousand in cash/gold/whatever and stick that in a safe deposit box, to keep yourself under the limit.

  • Captain

    Black — excellent post. Thank you for the very useful info.

    Two questions:

    1) Do you know of a source of info on foreign/multi-national bank reliability — e.g., a web site listing solvent banks doing business in Singapore & Panama? I’m proximate to Los Angeles, so just about any multi-national should be accessible to me.

    2) Do you know offhand of any such banks that would then offer brokerage services through said foreign accounts?

    Absolutely enjoy the hell out of the newsletter. Keep up the good work.

    • Anonymous

      DBS is a Singapore bank and it has a branch in LA. DBS is the largest bank in SE Asia and has the service you want

  • Me

    You’re probably right in that this is a way to do it however my way of thinking is that if you don’t have sufficient funds to warrant flying to your particular destination then I’d rather put the cash into bullion in a safe place wherever I lived until such time as the value became worthwhile to warrant a flight and bank account opening. Rightly or wrongly I think that a bank account in a non-descript bank (but well capitalized) in a place like Malaysia for eg makes sense. Preferably where they don’t speak english even. Its your job to navigate language difficulties but the peace of mind is probably worth it. Just me two cents worth.

  • Burt

    Hi Simon,

    Thanks for the great service you provide us – what about the Isle of Man jurisdiction? I am considering Lloyds bank in this jurisdiction

  • Jay

    How do I get my money out of my IRA/401k without incurring crippling penalties and fees? Is the Checkbook IRA a secure way of doing this? Do you know of any providers you would recommend?

    • http://agora geoege

      How do I get my money out of my IRA without incurring crippling penalties?

    • LAUGHAWAY99

      RENOUNCE YOUR
      CITIZENSHIP

    • wordwar

      You could set up a self-directed IRA LLC and invest in foreign securities, real estate, businesses, etc, as long as you were not the manager or an employee of the business, or ever live in a home owned by the IRA. However, Uncle Sam would still control the gate keys, so access to your cash or assets could be limited at any time by court order.

  • kalum

    I have considered crossing over to Canada, but I understand it is considered a “restricted” country, meaning US citizens can not open bank accts there unless they show they have a residence there. Is this correct?

    • Captain

      kalum, I recently called a few bank branches in Ontario to ask that very question. They told me there are no restrictions on US citizens opening accounts there. I think all they need to see is a driver’s license or passport (US) and, of course, some money (I even think you can write them a check from a US bank). Some will even allow you to open a safe deposit box with no account — most US banks are not that liberal. The box fees are competitive with US institutions, too. I encourage you to make a couple calls. You can get the numbers off a simple location search on Yahoo or Google. FWIW, I queried branches of Toronto Dominion, Scotiabank, and Bank of Montreal — all because they were close to where I’d be crossing over to open the account. They all told me the same thing and seemed quite eager to help me do it. It’s easy, believe me.

      • Edfox45

        I just chatted with two Canadian banks, indicating that I would be arriving from the USA and would like to open an account in Canada. The answer was, “No.” Only Canadian citizens, permanent residents, or immigrants can open accounts. One of the calls was with Scotiabank. Things seem to have changed in the last three months.

      • rocketeer928

         We opened checking (chequing) accounts in person in Ottawa just last March with just our passports, driver’s licenses and a personal U.S. check with no problems.  Perfectly legal.

      • Chris Bourbon

        I very much doubt you could open an account. I am a resident myself and know that eventhough I have been a client for decades with Scotia, they still ask me millions of questions before taking my money or allowing me to take it out.

      • Chris Bourbon

        If you had also gone to CIBC, you would have asked all the Canadian banks :-) Banking in Canada is the monopoly of the big 4. 2 points you have to remember: 1) Canadians tell you what you like to hear, but you further realize taht they did not tell you the truth either because they did not know the answer (and have to entertain a certain number of calls per day) or because they downright lied (that’s an official soprt in Canada). Even when you are a resident, it’s a hell of a ride to open an acount, si I doubt that foreigners can open one easily.

      • paladino444

        This comment if 4 years old and I just wanted to comment that I believe it has become very difficult to open a bank account in Canada for USA citizens since the FACTA fiasco and other USA banking gestapo laws went into effect in 2013

  • Bill Harrison

    To Burt sorry but I can tell you absolutely that the IOM is not a secure jurisdiction due to the corrupt unelected marxists in Brussels call the EC os as many in

  • http://SovereignMan,S&ADailyCrux Marian

    HI Simon. That was a very interesting article on openning foreign bank accounts. I just read something on openning a Swiss Annuity, that’s supposed to be excellent, but no details. Do you have any information on these instruments? Thanks, and keep up the great work!
    Marian

  • http://YAHOO RAY SR.

    What about Canada? The Bank of Montreal trades on the NYSE and is one of the largest in Canada. Very solvent and it has branches across Canada. you could go to Vancouver and see where the Olympics were held to check out the bank there. They haven’t missed a dividend payment in over 160 years! Very safe and I think that the Canadian dollar will eventually pass our sinking dollar.

  • Walter Grattan – Bahamas

    Why do you berate HSBC and Standard? Both have come through the current crisis in good, if not excellent, standing, and are two of the strongest banks around, certainly better than any American bank!

  • M W Baumeister

    Good questions. Now what about answers?

    mwb

  • Giancarla

    Simon- Thank you… I really appreciate that you give out this information for free and hope everyone else does too. I look forward to more information about this and if you can answer some of these questions in your weekly mailbag.

  • panamared

    I have a Ukrainian wife. I want to open her a bank account at Raiffeisen Bank in Viena, Austria. I have contacted them saying I wanted to open an account in her name so I can send money to her for family support. I told them she is not a resident of the USA and will not be. Neither of us want to live here but my work is from US companies. The IRS has no jurisdiction over my wife. They said they wouldn’t open an account for me. Raiffeisen has bought a Ukrainian bank named Aval Bank. Is there a way I can overcome this?

  • Jack Fry

    Do you have any suggestions fot an American who would like to open a bank account in Thailand?

    • http://www.AwarenessForex.com/ AwarenessForex

      You must physically present yourself to a bank.  Bangkok bank is preferred, mainly because they have an ACH option to take USA / UK / Au funds into BBK account: cheap, best exchange rate, and takes about 2-3 business days to credit. But there are several other bank accounts. The tourist areas will speak better english and deal with more foreigners.  

      The best bet is to have a non-immigrant visa for largest chance of success.  Although people have had success on tourist visas also.  I was asked if i had a “long stay” visa.  That was all i needed.  Sometimes they may ask for a work permit or decline your business.  Politely state that you called bangkok bank and you brought all the required documents with you.  Avoid arguing.   Leave and try a new branch, as each branch manager can make up their own rules.  Take a thai [girl]friend with you.  They may just use them as a guarantor.  I didn’t need one before, but needed one afterwards even though they saw my passbook and saw I already had an account in good standing in another province.  That’s how it goes in Thailand sometimes.  The employee may be trying to “save face” because she doesn’t know how to do something, or whatever.
       
      Make sure you setup internet banking.  Do this the same day or the next day.  And make sure it works before you leave the country (or branch).  You will need a local sim card with phone # to activate some of the more advanced features, like transfers, bill pay, and other features requiring more security.   Thaivisa.com has some posts on this also.  Bring the laptop with you so you can check your login right there.

      I think that those people who are serious about opening account in foreign lands, should actually visit there.

    • http://www.AwarenessForex.com/ AwarenessForex

      You must physically present yourself to a bank.  Bangkok bank is
      preferred, mainly because they have an ACH option to take USA / UK / Au
      funds into BBK account: cheap, best exchange rate, and takes about 2-3
      business days to credit. But there are several other bank accounts. The
      tourist areas will speak better english and deal with more foreigners.  

      The best bet is to have a non-immigrant visa for largest chance
      of success.  Although people have had success on tourist visas also.  I
      was asked if i had a “long stay” visa.  That was all i needed. 
      Sometimes they may ask for a work permit or decline your business. 
      Politely state that you called bangkok bank and you brought all the
      required documents with you.  Avoid arguing.   Leave and try a new
      branch, as each branch manager can make up their own rules.  Take a thai
      [girl]friend with you.  They may just use them as a guarantor.  I
      didn’t need one before, but needed one afterwards even though they saw
      my passbook and saw I already had an account in good standing in another
      province.  That’s how it goes in Thailand sometimes.  The employee may
      be trying to “save face” because she doesn’t know how to do something,
      or whatever.
       
      Make sure you setup internet banking.  Do this the
      same day or the next day.  And make sure it works before you leave the
      country (or branch).  You will need a local sim card with phone # to
      activate some of the more advanced features, like transfers, bill pay,
      and other features requiring more security.   Thaivisa.com has some
      posts on this also.  Bring the laptop with you so you can check your
      login right there.

      I think that those people who are serious about opening account in foreign lands, should actually visit there.

  • Roman

    Dear Simon,

    I followed your lead on HSBC baniking in Hong Kong.
    As a resident of Russia I Inquired them on a possibility of opening a corporate account without going to Hong Kong because there is a HSBC office in my home city – Saint-Petersburg, Russia.
    Received a response – Personal appearance in Hong Kong is a MUST.
    Additionally, there is a HGD2000.00 fee for opening an account to foreign to Hong Kong entity.

    Kind regards,

    Roman

  • Steve McQueen

    Hi Simon,

    I really enjoy reading your blog, especially this entry on “How to open an account in HK.”

    I called a Standard Chartered branch in Hong Kong today. They seem to have better customer service. I was able to get through to a branch with little trouble from their automated system. HSBC, I gave up after fifteen minutes.

    The SC branch in Kowloon said that I needed to physically be present (in person) to open the account. All that was needed was a passport (depends on country, USA seems to be OK), proof of residency in your country (Drivers license should suffice) and $10,000 HKD (around $1250 USD) as the minimum balance. Anyone can do it and there is no “foreigner” fee in opening the account.

    Hope this helps everyone looking to open an account!

    -Steve McQueen

    • John Hand

      SC has locations in the US – use google to find Jack

  • Haile

    hi Simon,
    thanks for the updates, I want to open a bank account in Ohio, Is there a possibility to open with out traveling to USA . Of course I am also Non-Us Citizen

  • Stella

    file US Treasury form TDF-90-22.1 - only if the aggregate value of these accounts exceeds $10,000 at any time during the calendar year. 

  • http://www.AwarenessForex.com/ AwarenessForex

    I was reading an article by Privacy World that purported that HSBC is no longer opening foreign accounts for US Citizens. is this correct?

    • PETROQUIPUSA

      YES IT IS CORRECT!!!!

  • LP

    Simon,  How do I open a bank account in Singapore without going there.  I already have an account in New Zealand but had to travel there to open it.

    Thanks, LP

  • Bubba

    I did the HSBC thing yesterday.  It works well.
    But you don’t have to call Hong Kong.
    Just call their global office in the US.
    In fact all you have to do is go into a local branch and they will handle it.
    It took about an hour and I had a local US account open and the paperwork for my foreign account was in the works.
    It then goes to their office in that country and you get everything back in about three weeks.  
    You don’t even have to fund the foreign account until you need it for something.
    Depending on the amount you open with and the type of account, fees vary, but at most it will run $200 for the overseas account.  The Premier account I opened required 100k minimum.  It comes with a fee free ATM card and a Mastercard with no foreign use fees.
    There are other accounts available that require much less and let you do the same things.
    HSBC can open accounts in 78 countries for someone without you traveling there.

    • http://www.newsuperhuman.com/ newsuperhuman

      Congratulations, you opened a foreign account with HSBC. So what have you accomplished other than having another bank account overseas?

  • Gman

    If the offshore bank has just 1 single location in the USA, then the entire bank and all accounts everywhere are under the jurisdiction of the USA.  There is precedence for this.  

    When you go about opening a foreign account as this article says you are basically getting currency diversification only; there is no protection against sovereign risk, and negligible protection against a collapse in the banking system, you don’t want a bank that is too tied in with the western worlds banking system.

    There are a few banks and brokerage firms that will still allow Americans to open accounts without traveling to their offices in good, economically & politically sound, mostly in off-the-radar countries.  http://swisssolution.webs.com/

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