An international bank account is always a good idea, particularly if you live, work, invest, or own property abroad. It allows you to control your money wherever you are on the globe, and it is your key to international investment opportunities.
Even if you put a few thousand dollars in a non-U.S. bank, you still have the opportunity to take advantage of several key benefits of offshore banking.
You benefit from increased privacy. Since your money is outside your own country, it becomes invisible to information brokers and private investigators in the U.S. It also provides protection for your assets. If someone wants to sue you, and performs a domestic asset search to determine if you have recoverable assets, your international assets won’t show up. And if you’re concerned about a future collapse in the value of the U.S. dollar, having multiple currencies in a single account is a crucial advantage—something you can do if you chose the right offshore bank.
Of course, when you go offshore, the last thing you want to do is jump from the proverbial frying pan into the fire. That means finding a safe bank is of utmost importance.
To ensure safety, I suggest dealing with banks that have a minimum 10% core capital ratio (“tier 1 capital”). The higher the capital standing of your bank, wherever it resides, the safer your money will be. The very safest banks have capital ratios of 50% or higher, but they cater only to the wealthiest depositors.
In recent years, offshore banks have slammed their doors shut to American clients. There are many reasons for it, but rest assured it’s not personal: It’s simply that working with U.S. citizens now carries a lot more risk. Across the globe, the U.S. employs “extraterritorial jurisdiction,” which means it can extend domestic law and authority to foreign countries and assets. One of the most infamous examples is the Foreign Account Tax Compliance Act (FATCA).
Banks worldwide also must deal with increasingly stringent anti-money-laundering rules. More and more, the only way to open an account is to make a personal visit to a bank.
Fortunately, there are a few exceptions to this rule, although you’ll still need to run a due diligence gauntlet to satisfy the bank that your funds are legitimate.
A bank that doesn’t require a personal visit is Capital Security Bank in the Cook Islands. This bank engages in no commercial lending and has a tier 1 capital ratio of 11.3%. With an account at this bank, you’ll be able to maintain accounts and/or purchase CDs in nine currencies. No minimum deposit applies, but there’s a $50 a month maintenance fee.
Two more of the easiest banks to work with, which don’t require a personal visit to open an account, are in Austria. Since both of them provide brokerage services, if you live in the U.S., you won’t be able to deal with them directly, you’ll need to work with an SEC-registered investment advisor who can pass your instructions to the bank.
Wiener Privatbank is a private bank with no commercial lending exposure. The bank has a tier 1 capital ratio of 29.9%. There is a $500,000 minimum investment for a self-directed or managed account at this bank, although accounts with opening balances as small as $250,000 are accepted for Nestmann clients.
Bank Winter is another private bank with no commercial lending exposure. It has a tier 1 capital ratio that exceeds 400%, making it one of the world’s safest banks. Again, a $500,000 minimum deposit applies, but Nestmann clients can qualify for an account with a minimum deposit of $250,000.
A foreign bank account provides a degree of independence from events beyond your control that you can't get in any other way. I highly recommend one, especially when you can open one without ever leaving home.
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