Opening Investment and Savings Accounts in Foreign Banks

Recently, there has been an increase in demand for foreign accounts, including savings and investment accounts. This happens primarily due to the desire of many entrepreneurs to bring their businesses to the international market or relocate them. Whether you live abroad, conduct overseas business, or both, opening a foreign bank account has many benefits. The most obvious advantage is the ability to operate financially in the chosen country. Moreover, an account in a foreign bank opens up investment opportunities and access to tariffs with favorable commissions.

Opening savings and investment accounts in foreign banks minimizes worries about currency fluctuations and allows you to enjoy increased privacy, as well as added financial stability during difficult periods. Keeping funds in a foreign currency savings account can be useful if you want to diversify your investments or need to make frequent foreign currency transactions.

However, not every Ukrainian can easily open a bank account abroad on their own. This is due to the overly “suspicious” attitude of many foreign banks towards immigrants from post-Soviet countries. In addition to using strict AML policies, international FATF standards, and complex customer identification/verification procedures in their work, banking institutions abroad may put forward many individual requirements for a non-resident applicant. The more prestigious and reliable the bank, the more difficult it is to fulfill these requirements. It is best to trust the opening of savings accounts in foreign banks to professionals who have the necessary experience to solve this problem. Lawrange employs such specialists. Our lawyers have been providing professional assistance in opening accounts abroad for many years.

Advantages of opening savings and investment accounts in foreign banks

Savings and investment accounts allow you to conveniently store and manage funds, as well as provide investment activities. Moreover, if they are opened abroad, individuals and legal entities gain access to various benefits.

Possibility of storing several types of currencies on one account at once

It is a significant advantage for residents and non-residents with financial obligations in more than one country. After you open the necessary account type in a suitable foreign bank, you can conduct banking transactions in different currencies, for example:

• Store euros, pounds sterling, and US dollars in one account.
• Withdraw money from your account in any currency of your choice.
• Move funds between different currencies to benefit from currency fluctuations.

It also allows you to earn income in one currency while paying your everyday bills and expenses in the currency of your country of residence.

Low commissions

A savings or investment account allows you to take advantage of favorable commissions and exchange rates that arise when making money transactions. Some banks may offer currency exchange services that minimize the risk of currency fluctuations and allow you to wait for a certain price before making a transfer. There are also banking institutions that provide services without commission, but it is important to understand the terms of such cooperation well. Therefore, it is worth searching for an international bank account that is right for you and meets your needs.

Protection from political and economic shocks

If you live or work in economically and politically unstable countries (which, given the current state of the global economy, applies to almost any jurisdiction), opening a savings account in a foreign bank takes on special meaning. Such a tool allows you to avoid risks in your country of residence, including those associated with high inflation, devaluation, coups d’etat, or war. Moreover, it is quite common for governments to try to seize the savings of their citizens by shrinking bank accounts, imposing taxes on deposits, increasing capital controls, etc. Keeping at least part of your funds in an international bank account ensures that you don’t become a victim of political and economic turmoil in your own country.

Income tax protection

If your country of residence taxes money transferred there, keeping your finances in foreign savings and investment accounts is highly beneficial for you. Placing your funds abroad allows you to bring enough money into your home country to meet your daily expenses while the rest remains tax-free in your foreign savings account.

Opportunity for greater benefits

Some foreign bank accounts may pay higher interest on savings. Although finding such banking institutions has recently become quite problematic, it is still quite feasible. However, the main benefit is that with a foreign savings account, interest is paid gross rather than automatically being taxed monthly, as in some countries. Timing is the key here, and it is especially beneficial for investors with large sums of money.

Access to more comprehensive services and products

Since there is less government intervention in international financial centers, foreign banks often offer more interesting investment services and solutions to their clients. For example, you can invest in all types of collective investment funds, including hedge funds, mutual funds, etc.

If these funds are registered in low-tax jurisdictions, investors only have to consider tax consequences when they want to transfer money to their place of residence. Thus, for those interested in using suitable financial planning, an international account is the ideal solution.

Individual approach to customer service

Depending on the bank you choose, you can use the services of a personal account manager or an account manager at a private bank. This service is useful for people interested in a more practical approach to account management from their banking institution.

Flexibility of banking services

Foreign accounts usually offer clients maximum flexibility of use. Expats can benefit from this regardless of their location, as they can manage their personal finances online or by phone at any time without being tied to a time zone.

High confidentiality

Potentially, foreign banks have a higher level of account confidentiality than in Ukraine. Some jurisdictions, such as Switzerland, place great emphasis on maintaining client confidentiality at all times. For those who want to protect assets from unfair or speculative judicial behavior, a foreign savings or investment account is an additional factor in protecting their own funds.

Access to international mortgages

When moving abroad and deciding to invest in real estate in a new country, obtaining a local mortgage without a credit history is almost impossible. In such cases, opening an investment or savings account in a foreign bank can be very useful since most international branches offer their clients mortgages subject to certain rules and conditions.

Process of opening a savings account

A savings account is an account used for storing and accumulating capital. The funds on it allow its owner to earn income through accrued interest. The main condition for making a profit is to comply with the prohibition for withdrawing funds from the account before the contract expires. Opening savings accounts in foreign banks follows a standard procedure.

Choosing a suitable banking institution

To do this, it is important to have information regarding the banking services market in a particular country along with the following information:

• The bank’s attitude towards non-residents (does it work with foreign individuals and legal entities?);
• Is a savings account available for opening?
• What currencies are allowed for transactions at the bank?
• With clients from which areas of activity the bank prefers to work?
• Is there a network of correspondent banks?
• What are the terms of service and tariffs?

As practice shows, most foreign banks prefer to cooperate with residents who are not included in the sanctions lists with clear and transparent business.

Preparation of necessary documents

To open an account, individuals should prepare:

• A notarized copy of the applicant’s passport.
• Proof of current address (a certified copy of a utility bill or bank statement in the applicant’s country of residence).
• Letter of recommendation (original and copy).
• A personal questionnaire in which you indicate experience, qualifications, education, current place of work, and position.

The bank may additionally require other documents at its personal discretion.

To open a savings account in a foreign bank for a legal entity, it is also necessary to provide passport data of the applicant and key figures of the company’s top management and shareholders. In addition, the list of documentation provided must include:

• Power of attorney from the director.
• Constituent documents.
• Business Plan.
• Financial statements for the last year.

Most banks require the personal presence of a potential depositor to open a savings account.

Submitting an application and waiting for a decision

You are required to fill out a special banking form indicating all the important information about yourself, your company, and provide pre-prepared documents. The processing time for an application varies from 1 to 30 days depending on the policy of the banking institution. If the decision is positive, an account will be opened for the client with means of remote access and related services.

Please note! All documents must be submitted in the official language of the country in which you are opening a savings account. Translations are certified by a notary or apostilled, and the documentation must be valid in terms of time (up to 3 months from the date of registration).

Process of opening an investment account

Opening investment accounts in foreign banks is of interest to entrepreneurs and legal entities who plan to engage in investment activities: buying securities, bonds, investing in precious metals, and other types of assets. Asset management is carried out by the bank for a certain percentage of the amount (usually within 1-5%) or by the clients themselves, paying only for standard banking services.

Choice of jurisdiction and bank

It is important to understand whether non-residence in your chosen jurisdiction brings financial benefits. Learn the country’s tax and legal system to ensure your investment is protected and your financial firm is properly regulated. In addition to favorable taxation, each country has a unique legal system, reporting requirements, rules, and investor protection policies. Which of the listed institutions to choose depends on the specific goals and objectives of the investor. Our experts have sufficient experience and can help anyone wishing to open a foreign investment account.

Preparation of documents

The list of documentation may differ in different banking institutions, but most often, the following is required:

• passport and data on all assets of the person opening the account;
• description of the source of finance;
• corporate documentation (if the account is opened for a legal entity);
• business plan, etc.

Please note! Lawrange has a lot of positive experience in opening investment accounts abroad and provides document preparation services for our clients.

Submitting an application and waiting for a decision

The application shall be submitted by filling out a standard bank form along with all the necessary documents attached. You should be prepared to quickly respond to the bank’s requests and provide any additional documents when considering your application. On average, it may take the bank about 2 weeks to make a decision.

Features of working with foreign banks

Not every banking institution abroad can provide non-residents with favorable conditions for opening a savings or investment account. Some banks set excessively high minimum balance requirements, while others do not open an account without visiting a bank branch in person.

Currency risks and currency conversion

The main risk that accompanies all financial investments is the risk of non-return of money. It can arise under the influence of various factors, and the exchange rate can either decrease or increase. In the case of positive growth, predictable and stable income becomes possible, but if there is a bias towards one of the currencies, currency risk arises. For this reason, it is recommended to keep most of your long-term savings in foreign bank savings and investment accounts in the currency of your main expenses and a smaller part in other currencies.

It is important to remember that for any bank, regardless of jurisdiction, the main task is to make money. One of the easiest ways to do this is to apply currency conversion fees. Therefore, people wishing to open a savings account in a foreign bank must know how to find a banking institution that does not hide fees, ensuring transparency in interaction with its clients.

Minimum balance and commission requirements

When opening a bank account, you need to consider many conditions, including those relating to interest rates, commissions, and the minimum balance. It is an important characteristic of the work of any foreign bank. A minimum balance requirement is the amount of money you must keep in your bank account, usually in order to waive your monthly banking fees. Not all minimum balance requirements are the same. There are several ways in which banks require a minimum balance:

• Minimum daily balance.
• Average minimum balance.
• Minimum total balance.

Complexities of Ukrainian currency legislation

Recently, the currency legislation of Ukraine has been characterized by slight liberalization, but is still considered quite complex and strict. When Ukrainian citizens or legal entities invest abroad, certain restrictions apply. It means you need to obtain an individual license from the National Bank. In addition, when Ukrainians invest abroad in cash (regardless of the amount), a non-cash method can be used using correspondent accounts of banks authorized in Ukraine.

According to the Decree of the President of Ukraine dated September 13, 1995, No. 839/95, Ukrainians can invest property assets abroad to contribute to the authorized capital of enterprises registered in the territory of foreign jurisdiction. In this case, you also need to undergo appropriate licensing from the Ministry of Foreign Economic Relations and Trade of Ukraine.

Why choose Lawrange

Our team of experienced, highly qualified lawyers provides all the necessary assistance in opening and maintaining savings and investment accounts abroad. We provide services:

• Advisory: taking into account your requirements, we help you choose the appropriate jurisdiction and bank.
• Preparation of a package of documents depending on the requirements of a particular bank and the current laws of foreign jurisdictions, as well as the currency legislation of Ukraine.
• Assistance in communicating with a private banker and organizing personal meetings.
• Preparing for and overcoming AML/KYC bank verification.

Lawrange specialists will help you collect documents on the origin of funds, fluctuations in the interbank foreign exchange market, and much more within a matter of days, while working on the issue yourself may take you much longer.

FAQ

How long does it take to open an investment account in a foreign bank?

From the moment the complete package of documentation is submitted, if the bank does not have any claims or requests to provide additional information, the time frame for making a decision ranges from 2-4 weeks.

What are Compliance and KYC procedures?

These procedures allow the bank to evaluate the client for compliance with all necessary requirements. In addition to studying the information provided by you, the bank independently collects data as part of Compliance and KYC.

Where is the best place to open a savings and investment account?

Reliable jurisdictions include EU countries. Banks in Poland, Austria, Estonia, and other European countries work with all currencies, often cooperate with offshore companies, and do not set currency restrictions. Also, recently, more and more non-resident investors have been attracted to UAE banks, which have proven themselves to be one of the best in ensuring the confidentiality of their clients.

ORDER AN OPENING INVESTMENT AND SAVINGS ACCOUNTS IN FOREIGN BANKS