Opening an account abroad is one of the sought after services. Funds abroad may be required by private and corporate individuals. It is advisable that the procedure for opening an account is quick and confidential. This is especially true against the background of deoffshorization processes. Banks do not need lengthy checks and in-depth analysis of each client’s transaction.
For whom?
Is it possible to open a Russian account in a foreign bank? Yes. The need for this service may arise for people who intend to conduct an online business abroad or simply want to deposit funds at a higher percentage.
How to open a bank account for a foreign citizen:
- Select the type of account and country for investing.
- Collect a package of documents and provide them directly to an intermediary or financial institution.
- Register a company (for legal entities).
Let's consider in more detail each stage.
Country selection
Individuals can open an account with a credit institution without intermediaries. However, the list of banks that are willing to communicate with the client is very small. Especially when it comes to financial transactions in Luxembourg or Monaco. Although, against the backdrop of modern political realities, even industry leaders such as Switzerland and Singapore are losing their positions due to pressure from international organizations. Respectable banks open an account only after personal communication with the client and making a minimum deposit amount.
You can open a bank account in a foreign bank in offshore countries. These financial institutions prefer to work through intermediaries who not only conduct an initial check of clients and the source of funds, but also determine which credit institution is best to cooperate with.
Western European banks are not interested in non-resident cash settlements. Very high tariffs are set for such operations. For frequent transactions, it is better to open an account with a foreign bank in Estonia or Latvia. Financial institutions of Singapore and Hong Kong welcome foreigners who do business in East Asia, and accept deposits only on very large amounts of deposits. An account in Switzerland is best used to preserve capital, and not for active trading. Credit institutions set high requirements for a minimum balance, and the number of operations is limited.
Every year, Russians have increased interest in banks in the Baltic countries. In financial institutions, service is provided in Russian for a small fee. Before choosing a particular institution, it is worthwhile to clarify the reliability rating of the bank, the size of the minimum deposit and requirements for foreign customers.
Lithuanian banks as additional documents also require a certificate confirming the source of funds. This can be an extract from a personal account, a contract or documents on the ownership of real estate. A notarized copy of the beneficiary’s internal and foreign passport translated into English may also be required. Some banks register an account only after a personal visit by the manager to a branch of a financial institution.
It is much more difficult to register an account with an Austrian bank. The client needs to prepare in advance a large package of documents, answers to questions about the origin of the funds, as well as a minimum deposit of 200 thousand euros.Some financial institutions open an account after depositing 5 thousand euros. This amount is not used as a deposit, but is immediately credited to the account and can be used by the client.
Types of accounts
Before opening an account with a foreign bank, an individual needs to choose an account type. The highest requirements are provided for investment. They are designed to diversify assets consisting of classic and new investment products. It is important to choose the right strategy - risky or with minimal profit. Such accounts are not suitable for regular payments. A large fee is charged for transferring funds.
For ongoing operations, it is better to open an account with a foreign bank with a retail focus. In such institutions, you can open a classic deposit, savings account or use standard investment products. You do not have to overpay for service fees.
Documents
In order to open a bank account in a foreign bank, you must provide:
- a statement with the original signature of the owner;
- copy of the passport or driver’s license of the owner;
- letters of recommendation from other institutions;
- company documentation package.
The timing of paperwork depends on the internal rules of the bank. Some institutions open an account within one day, while others check documents for more than a month.
Allowed Operations
To an account opened with a foreign bank, individuals can credit:
- the amount of interest on deposits;
- minimum deposit required to open an account;
- cash received as a result of conversion;
- RF currency transfers between foreign accounts of two residents or their close relatives;
- transfer of a foreign currency resident to an account of another resident opened with a bank outside the Russian Federation, provided that the transaction amount for one day does not exceed $ 500 at the Central Bank rate.
Company registration
Offshore companies today are used not so much for business as for ownership of assets and foreign accounts. You can contact the intermediary and buy an already registered company. The paperwork will take one day. Those who are really ready to do business abroad are better off registering their own LLC. Moreover, a foreign company owning a Russian company takes care of any property disputes within the framework of international law.
Open account in a foreign bank remotely
The procedure for registering an account is quite lengthy. It is necessary to collect a large package of documents, translate them into English and notarize. In order not to spend a lot of time, you can open an account in a foreign bank via the Internet. The main advantage is that the client does not have to personally visit the bank branch. However, a deal without intermediaries will not work.
The global trend indicates that offshore banking is getting more expensive. Five years ago, you could open an account for $ 200 and spend the same amount on annual maintenance. Today, banks conduct more transaction verification operations. As a result, the cost of payments and the commission for servicing an account are constantly increasing.
Offshore
It is easier for a legal entity to open a bank account in a foreign bank than an individual. This service is provided immediately after the registration of the company. Abroad, foreign companies can not carry out financial work for cash.
You can’t buy an offshore with an account already open. The bank may recommend the jurisdiction with which it cooperates. But this does not mean that the specified company will provide the services the client needs. For example, some Latvian banks do not officially accept documents from classical offshore countries such as Anguilla, Antigua, UAE, Panama and Belize.
Tighter rules
In 2013, Russia became a member of the tax information exchange system.Now she can receive data on foreign accounts of Russians from other countries. Under the law, Russians are required to inform about the availability of an account with a foreign bank. With the introduction of the new system, tracking the “silent” will be easier.
What does it mean?
A citizen of the Russian Federation has the right to open an account with a foreign bank. However, according to the Federal Law “On Currency Regulation”, currency residents are obliged to notify about the opening and changing the details of an account with a foreign bank. The declaration in the Federal Tax Service must be submitted annually until 01.06. This norm has come into force since 2015.
Limitations
Before you open an account with a foreign bank, you need to inquire about the restrictions. Thus, foreign currency residents cannot credit income from the sale of real estate and grants to their accounts. The penalty for violation of this requirement is 100% of the transaction amount. If a citizen works in Estonia, sold an apartment in Tallinn, and credited the received funds to an account with a local bank, then the next visit to the Russian Federation will end badly. In such cases, you need to open an account with a foreign bank in Moscow, and then transfer funds abroad. This restriction does not apply to persons who have been living and working in Estonia for many years and do not come to the Russian Federation at all.
Reporting
Citizens of the Russian Federation are required to report to the Federal Tax Service about the opening, closing, changing details and the movement of funds in each of the foreign accounts. At the same time, tax authorities may request additional information about individual transactions. A reporting form has been developed specifically for this purpose. The completed declaration can be independently transferred to the tax officer, sent through the taxpayer’s office. Persons who are not registered in the Russian Federation can send a letter to the territorial office of the Federal Tax Service at the last place of registration.
Taxation
Not all currency residents transfer taxes to the budget of the Russian Federation. If a person is not considered a tax resident, then he is not obliged to pay funds to the treasury of the Russian Federation. In many respects, this also depends on the agreements of Russia with a particular country.
According to Art. 207 of the Tax Code, tax residents are Russian citizens who:
- live in the Russian Federation for more than 183 days a year;
- have a residential property owned or registered at the place of residence in the Russian Federation.
Fines
If the tax authorities themselves learn about opening an account abroad, a fine of 2-3 thousand rubles will be imposed on the taxpayer. In case of violation of the deadlines for submitting reports for up to 10 days, the amount of the fine will be reduced to 500 rubles. For a repeated offense will have to pay 20 thousand rubles.
Issue price
Most problems arise when withdrawing cash. SEPA operates in Europe - a single zone of European payments. You can withdraw funds from cards at any bank in all the countries of Europe, as well as in financial institutions in Hungary, Poland, the Czech Republic, Romania, Bulgaria, Sweden and Denmark, without a commission. But these rules do not always apply. A client who has issued an account in Italy and is trying to withdraw funds in Switzerland should be ready to charge a commission. For interest-free withdrawals, it is better to use Sberbank ATMs, which are represented in many countries of Eastern Europe, or Citibank. This international bank has branches in more than a hundred countries of the world. In any country in the world, a transaction to cash out funds from bank cards in "native" ATMs is not subject to commission.
The profitability of deposits is also doubtful. In addition to the commission for opening and maintaining an account, the depositor will have to pay income tax. In Switzerland, non-resident income is taxed at a rate of 35%. Income is accrued on the deposit at a rate of 0.25%, and this is only if the currency of the account does not differ from the national one. That is, it is impossible to make money on a deposit in a European country. But the client will need to pay a fee for opening and maintaining accounts.