Account for an existing offshore company

Account for an existing offshore company

Many existing offshore companies are faced with the problem of opening corporate accounts in selected jurisdictions.

Banks’ requirements for opening accounts are constantly changing:

• Accounting audited reporting.
• Transparent structure of company ownership.
• Real presence in the country of registration (substance), etc.

For a classic offshore company, it is quite problematic to ensure a real economic presence and hire employees in a small and distant offshore state.

There are four main ways out of this situation:

• Close offshore.
• Choose another jurisdiction for the company (Gibraltar).
• Try to open a corporate account in other banks, payment systems. However, there is no guarantee of a positive result.
• Use branches and open accounts for them.

Branches

The following development of events is possible: opening a branch to an existing offshore company, then opening an account with a local bank.

The advantage of this structure is that the branch is part of the parent company, but at the same time has its own registration number and a kind of “autonomy”. It is able to create a relatively cheap real presence in the country of registration (substance). This allows the branch to open a corporate bank account. It is easier for a local company to do this.

This method has several other advantages:

• Fast branch registration procedure.
• Predictable account opening times.
• The reputation of the business is improved (respected jurisdiction).

Disadvantages of this method:

• At least part of the profit is taxed – depending on the country of registration.
• Additional costs for creation / maintenance.
• If an offshore is owned by an offshore company with denominations and you don’t want to change anything, then it is impossible to open a corporate bank account, even a branch.
• Some states will not open a bank account if the business is not associated with a specific country, for example, Portugal, Estonia.
• The branch will not help you maintain complete anonymity and avoid paying taxes.

Further professional advice should be sought for each particular case. Our firm does not accept any responsibility for any loss or damage occurring by acting on the basis of this information. Also, please visit our website for further updates.