Can I Set Up An Offshore Bank Account Anonymously?

The legendary Swiss bank account. The lucrative anonymous offshore banking account in some exotic foreign destination. Is it too good to be true? Perhaps one of the most commonly asked questions in terms of offshore banking is whether or not one can truly set up an offshore bank account anonymously, and the answer here is NO.

Why?

Well, first of all, truly anonymous banking accounts simply do not exist. Even you can't open any type of bank accounts anonymously. At least not anymore. There are regulations at every turn that makes this an impossibility. If this is the case, then why do anonymous bank accounts or opening any bank accounts anonymously attract so much interest?

Reasons People Want to Open a Bank Account Anonymously

Some people have gone to drastic measures to set up bank accounts anonymously. Using someone else identity on the account or on the deep web are just a few of the less straightforward methods by which some have set up anonymous offshore bank accounts, but these do come with their own set of risks.

There are reasons why people want to open an account anonymously. Some of the those are as follow:

People don't Want to be Questioned

One - perhaps the biggest - reason is because people don't want to be questioned about the origins of their assets. This is why offshore banks and companies are misunderstood as tools for criminals and wrongdoers to stash their illicit funds.

People Want to Evade Taxes

Another major reason would be taxes. Some people want to go offshore because they simply don't want to pay taxes, or they want to pay as little taxes as possible. While there are legitimate ways to use offshore structures for tax saving purposes, many want to take this route for tax evasion - which is, of course, illegal.

People are Being Misled

One more reason: Misleading websites. These sites spread misinformation and mislead people into thinking they can open an untraceable bank account. Beware: these sites are likely to be created by those who want nothing but your personal information (and a sum of money, of course).

What about Numbered Bank Accounts?

Interestingly enough, when people are referring to an anonymous account in a practical offshore banking situation, they are actually referring to numbered accounts. With a numbered account, the account holder’s name isn’t used. Instead, a code or number is used to identify the account and thus make it more private. In this situation, the client’s name is only available to immediate staff members at the bank.

But such privacy is long gone.

Indeed, once upon a time, the account holder’s name might be written on an index card and kept completely offline. Eventually, these accounts became a big red flag for tax evasion, so in 2010, FATCA and other similar regulations came into play to force accountability in offshore banking.

Do Things in The Right Ways

Indeed, people still look for anonymous accounts for reasons such as privacy, personal information protection, asset protection, and tax avoidance. However, they should do so by following the rules (unless you want to risk yourself with hefty fines, or even jail time).

Tax Avoidance is Perfectly legal

In terms of taxes, it’s important to remember that every single person is liable for whatever tax burdens they might have. So, even if you did have an anonymous offshore banking account, which doesn’t exist anymore, you would still be expected to pay taxes on the assets held there. Just as in any other financial situation, failure to pay your taxes could lead to fines and penalties.

Just remember, tax avoidance is not the same as tax evasion. The former is perfectly legal, while the latter is illegal.

KYC Policies

You see, banks have put into motion an initiative called KYC, or Know Your Customer. The very basis of this policy is to verify clients with a mission of reducing and eliminating money laundering and financial terrorism within financial institutions. KYC checks are put into place to identify and verify the identity of clients who open accounts, as well as to verify their identities periodically after the account is opened.

By making sure all clients are real, KYC helps banks better monitor risks within their systems. Clients are expected to prove their identities via identification card, document verification, and some other means such as facial verification.

KYC isn’t just a loose concept. In fact, those who refuse to comply could find themselves responsible for paying heavy fines.

Conclusion

So, yes, you might find some online companies who profess to have the power to help you create an anonymous offshore bank account, but is it true? Absolutely not. There is no true anonymous banking anymore. You are completely responsible for your reporting requirements, and banks are required to verify your identity.

Aside from KYC, rules such as CDD and AML are also in place for verification purposes. While having a third party set up your account might seem logical, it’s actually illegal in nearly every single jurisdiction. Doing this can cause a heap of legal issues, and at a minimum, it could cause assets to become frozen.

Fortunately, while you can’t take advantage of a fully anonymous bank account, you can still get many of the benefits with an offshore bank account today. The key rests in strategically using offshore banking to your advantage.

Whether you want to reduce tax by creating a tax residency in a low or no tax jurisdiction or getting a residency in a territorial tax country, you can still use offshore banking as a way to legally reduce your taxes. Simply opening an offshore banking account can give you some benefits, but actually creating a tax residency in a jurisdiction is quite possibly the best route for reducing or even possibly eliminating taxes.

The keyword here is 'legal'. You want to do all of those legally. Unfortunately, laws and regulations are complex issues. That is why you may want to seek help from a legitimate service provider. To make sure that you do this legally, you can consult with us to see whether going offshore is the best strategy for you.