In South East Asia, many big banks asked their clients to close down their bank accounts. Some of these clients came to us and they were panic initially. However, we gave them the assurance that we would solve this problem for them as soon as possible. It took us 6 working days to open an offshore bank account. Certainly, this credit does not solely belong to us as this required a lot of corporation from the customer as well.
Why suddenly so many banks asked their offshore clients to close their account?
I am not sure if you feel the same. I think there were a few banks were asked to shut down (BSI and Falcon Bank) and a few banks were fined by the regulator due to money laundering activities. In order to prevent money laundering activities from happening, a lot of banks would rather not deal with offshore companies.
How should offshore corporate owners deal with this?
Based on our experience, we are able to establish an offshore bank account for customers but we don't think any of the clients should close down any offshore bank account without any valid reason. It is not easy to open an offshore bank account and certainly the rules will get tougher in the coming years. We expect some banks to tighten the account opening process. This may include more required documents or may even abolish of the remote opening of an account.
What can those account holder whose bank asked them to close their account do?
Although we have a high than the normal success rate of account opening, we need to know a few things before we start work. We like to know:
- The citizen of the corporate owner (to make sure it is not high-risk or sanction country);
- The jurisdiction of incorporation of the offshore company (Some banks will exclude some jurisdictions);
- The business activities (We need to know as some banks may classify certain business activities as high-risk activities); and
- The inflow and outflow of cash from the new bank account (to make sure it is not high-risk or sanction country).
The next factor we need to determine is where you want your bank account to be. Do you want it to be in Central America, Europe, Offshore Jurisdictions in India Ocean or Asia?