Which foreign account is the best?

Index [Hide] [Show]

Opening a bank account abroad for small investors is a not difficult process. Learn more about precautions that must be taken when choosing and opening the best account abroad.

Although it may seem an uncommon fact, sometimes the exceptional or temporary circumstances of the economic and political frameworks in which we live can seriously affect our investment plans. For this reason, the option of moving your funds to bank accounts abroad is a real fact that sometimes saves millions of euros. Whether for diversification or looking for more attractive investment products or for fear of a new change in the legal framework of certain financial institutions such as the SICAVS, there are many who are interested to learn about the requirements for opening an account bank abroad, the difficulty and the cost that this process would entail. To answer all these questions, we have compiled in this article all the useful information that will help you clarify your doubts when opening the best offshore account abroad

Types of bank accounts abroad

The majority of our clients, before getting in touch with our company, tried to go to Barclays or Deutsche Bank branch in their country of residence with the idea of opening a bank account abroad and have returned home with disappointment after learning that things do not work so easily in practice. Therefore, here is the first lesson: the offices of foreign banks located in your country of residence do not open bank accounts in their countries of origin. As a result, we only have two possible alternatives to open a bank account abroad: going in person to the country in question to perform the procedures or choose a bank that operates over the Internet and allows us to apply for a bank account without a need of traveling. The truth is that the growth of the Internet has greatly facilitated the process, bringing the possibility of having a bank account abroad to anyone not resident in the country where he/she wants to keep his or her money, under certain requirements that we will see below. However, some time ago the only viable possibility was to travel to the chosen country along with all the necessary documentation or pay for a financial introducer to do all this work for us. Now everything is much simpler and thanks to the digitalization of banking sector application for a bank account can be done without leaving home or office. 

Requirements to open a bank account abroad

Whether you decide to go in person or send your application online, the requirements to open a bank account abroad will differ depending on the country and bank we choose. In this way, for example, trying to open a bank account in the United Kingdom without being a resident in that country is practically impossible, because you have to present a certificate of registration or an employment contract that shows the residence of the future holder of the account in the United Kingdom. On the contrary, other European territories such as Germany, France, Switzerland or Luxembourg reduce the requirements, especially if the procedures are processed through the Internet. In general, these countries request a filled out bank account opening form and certain personal documents, including a certified copy of the identity document, passport, current bank account statement and a direct invoice, all to verify that a client really is who he says he is. Subsequently, foreign banks will be responsible for checking the true solvency or insolvency of client´s funds. If everything is correct, the client will receive his personal access codes in a few days, without further complications. Sometimes you may be asked to link your new bank account abroad with one in your country of residence, but this is not always the case. Apart from the requirements imposed by banks to open bank accounts abroad to non-residents, another aspect such as our obligation to Tax agency should not be overlooked. In this regard, you should carefully inform yourself about your obligations to notify the Tax Agency of your country of residence, or failing that to the competent body, the possession of movable and immovable property located in other countries. For this purpose, the best solution without a doubt is to have a tax advisor who will guide us and confirm if the value of our assets outside our country of residence is exempt from being notified to the Taxa agency or on the contrary we must formally present a declaration of the same using the process usual required in each case. No presenting this information to tax authorities, by the holders of bank accounts abroad, can mean fines of great economic value. 

As we have seen in the previous section, it really is quite complex and expensive to travel in person to the chosen country to open a bank account abroad, and if we take into account that it is not possible to go to a bank office in our area, for example, the Deutsche Bank and to be able to process from there the opening of our account in Germany, it turns out that in the end the most viable option, in terms of ease, is to use a financial introducer or a bank that operates only by internet or that allows us to carry out the process through the network, which undoubtedly greatly simplifies the process. With this we can say that the best account abroad would be that in entities such as Deutsche Kredit Bank in Germany, Swissquote in Switzerland or Pictet in Luxembourg. However, qualifying it as the best account abroad should combine, in addition to the ease of opening procedures, low maintenance costs and high profitability. In this respect, if we talk about bank accounts abroad, it will be difficult to find costs lower than those imposed by national banks. There are foreign financial entities that could require their holders to keep a minimum deposit of € 17,000 and pay a maintenance fee of 300 € per year. Let's say that this could be the cost of keeping our assets safe. However, foreign banks will always provide greater facilities to large fortunes than to small savers or investors. Which is why some get greater opportunities to negotiate better conditions when hiring the best account abroad and others don’t. 

Is it worth it to open an account abroad? 

If you have savings and good tax advisors, opening a bank account open abroad can be the best option to diversify activity and investments, look for financial products with greater profitability and ease or simply a temporary shelter for your capital in times of legal, economic or political instability that could affect current investments in your country of residence. In this way, what we would earn will more than compensate the application paperwork, the maintenance cost charged by foreign banks and the fact that we have an expert who adequately communicates our heritage outside our borders to the competent body. However, small savers or investors with earnings below 10,000 euros may not be as interested, among other reasons because they would be in a worse position to negotiate commissions with banks. However, the simple online options mentioned above such as Deutsche Kredit Bank or Swissquote are better adapted to the needs of all types of customers, so here you will surely find opportunities with lower costs. As proven, European citizens do not encounter obstacles when opening their bank accounts abroad, since 2016 the figures continue to increase for such jurisdictions as Switzerland, Belgium, Cyprus, Madeira Islands, Saint Vincent and the Grenadines, Czech Republic, Latvia, Malta, Germany and Andorra. To this must be added the amount of shares in mutual funds and SICAVS associated with accounts predominantly located in Luxembourg and Switzerland. Undoubtedly, the fact of being able to open our bank accounts abroad through the Internet and without the need to leave our country of residence has made the process much easier and surely these figures will continue to rise in the coming years.