The Worst Way to Open an Offshore Business Bank Account

[@DrewNelles]

Andrew, Absolutely brilliant! As a Hong Kong Co. owner who just survived a couple of months ago his quintennial KYC re-certification with HSBC - boy have you nailed it. Registering a company is the easy part - you are so right. Figuring out banking, taking payments and the bi-national tax issues are where there is a huge hole in available services and advice. Thirty years ago no one looked at those as they weren’t an issue at all. Now that is the only issue, the rest being simple, cheap and done online. The irony of it all is that governments want to know everyone's full financial details so badly but then let banks refuse to open an account and thereby throw away all that information on that company and its owner(s), meaning the bank puts the info beyond the government's reach because they then have to bank outside that government’s territory - the only option left. And yes, definitely get a second bank account. Personal too, in at least all the countries you live / spend lots of time in. Even something as simple as your card expiring and you not noticing the letter until the day after can be avoided that way - helped a friend in London a few years back get home one night as when she went to the CashPoint her card was expired, and she needed the cash for a train. Not a biggie then, but two bank accounts fixes those kind of problems. And thanks for the reply you gave to Kevin below. Merchant accounts are an issue as well. Hopefully your team can point me in the right direction as I pivot around Covid-19 fallout.

[@nomadcapitalist]

Thanks a lot Drew!😍

[@MrE03]

Hi Andrew, could you do a video on the best passport combination(s)? e.g. the best combination that would grant the most visa free access possible, reduce taxes, perception, etc.

[@maverickcapitalist1]

Great topic for people who have opened offshore bank accounts and very important people understand the entity that offshore bank account is tied to in the respective country. For example, when I opened my first Russian bank account without a proper residence document I was forced to tie this bank account to the U.S. which kind of defeats the purpose of an off shore bank account. In this case it was solely out of necessity that I opened the bank account this way but in the future will only open bank accounts with entities or properties tied to the respective country.

[@zionnaranje7298]

Thanks for the advice @Viking Traveler :)

[@maverickcapitalist1]

@@zionnaranje7298 Yep!

[@kevins4815]

How are you dealing with merchant accounts. A business and a bank account is simple but getting merchant processing is a nightmare. How do you resolve this?

[@nomadcapitalist]

Kevin, there are different strategies for dealing with merchant accounts which are indeed harder to get in some offshore structures. If you need our help, email the team at [e-mail] and they can assist you.

[@jeremyleonbarlow]

If you aren't thinking about a plan like the legal & accounting department at a large multi-national corporation, you are probably doing it wrong. I mean you need to worry (from an American perspective) about IP issues regarding transfers of any IP assets to a foreign company under the new rules surrounding GILTI which are designed to make it hard to expatriate a trademark, patent, copyright, or goodwill of a business. You have to look at the impacts of the offshore jurisdiction where the company is headquartered on GILTI liability now and give years from now when the rates become more punitive. You have to examine merchant account processors that will work with a given jurisdiction. You have to examine banks for the jurisdiction where the company is headquartered. You need to look at international double tax treaties with your primary market to see what jurisdictions can benefit you and how to possibly use multiple jurisdictions to get money out of a primary market without withholding and to your headquarters without a withholding from the jurisdiction you use to get money out of your primary market. You need to examine relationships potentially amongst multiple countries to make sure you can access markets other than the jurisdiction for your primary market. I say this because in this day and age most people going offshore I would assume have a business which is somewhat location independent thanks to the Internet. You need to examine payroll taxes in those various countries and local labor costs. You need to examine transfer pricing rules and controlled foreign corporation rules for jurisdictions where you may actually live, or with the trifecta approach you suggest you may need to make sure you can move between location a) b) or c) in a given time frame to avoid triggering tax residence in an undesirable location for you personally, or plan around that ever becoming an issue. Figuring out how to get company accounts is important, but so to are personal accounts for the places you want to live, which likely means residence permits are an issue too. I mean if you want to go to one jurisdiction and live in that jurisdiction and bank in that jurisdiction it may be easier, but if you want your company in one jurisdiction and you in other jurisdictions it becomes harder. If you want those two things and access to a specific target market without withholding issues regarding your customers from a given jurisdiction it is something else entirely. I mean if your target market is the US for your app or your SaaS and you want to get money out of the US without withholding taxes, that is going to take a lot of planning and probably multiple jurisdictions. You are going to be reading double tax treaties and local laws. You are also going to be looking at payment processors like a Stripe or a PayPal for jurisdictions that they freely work with and you will be looking at merchant account providers likely including high risk merchant account companies. On top of those logistics challenges you will also be looking for banks that will take your business in the approriate jurisdictions and nothing about any of this should ever seem cookie cutter to anyone. There may be solutions that are cookie cutter for certain scenarios, but a solution for a SaaS company is not going to look like a solution for an FBA company or a company that is manufacturing physical products where navigating tariffs may also become a significant issue beyond labor costs and tax implications. Let's not even get into transfer pricing and using a wholesaler to warehouse to export from the point of manufacturer take profits and resell to the import market.

[@jeremyleonbarlow]

@@alexanderchenf1 no, but I do have an LLM in IP law and about 18 credits of tax law earned during my JD.

[@zionnaranje7298]

Your channel has been pretty high on content, but personally I loved your ‘1 minute Nomad Q & A’ series. Could you make some more of it??

[@nomadcapitalist]

Thanks for the idea. We have no plans to bring OMN back, but we will find other ways to provide value.

[@zionnaranje7298]

Nomad Capitalist Any decision by you is good, I was giving a suggestion:)

[@SantaBarbaraAlberto]

Thank you for confirming my thoughts. Dealing in foreign countries has to be done legally first and foremost. Dealing with foreign banks has to be done in a personal basis. All of this, outweighs the benefits and highlights the risk. Even is a commonwealth like Puerto Rico, the risks outweighs the benefits. You are offering a service and that is wonderful but one should never enter a domain without an exit. Just my take. Still like the St. Lucia citizenship idea. Like St. Tomas, St. John, etc.

[@SantaBarbaraAlberto]

@@nomadundercover3018 Congrats! For us is not the return on my money that I worry about but the return of my money that I care. Just my take. As Andrew mentioned, it's not for everybody but for a few.

[@SantaBarbaraAlberto]

@@PLZRWD That too! The whole theme has a suspect aspect to it. More evidence needed.

[@kingcold5977]

Andrew would you be in Malaysia in 2021 or early 2022

[@mervynmontague1811]

Fantastic video ! Listening to you is like a lecture where all the fluff is left out. It's just pure distilled information.

[@nomadcapitalist]

Wow, thank you!😎

[@donovanmic]

Great content. One question that occurs to me about the nomad capitalist lifestyle is what kind of a estate plan works for how someone with multiple residences and investments around the world. All countries will not recognize a will drafted under the laws of the US, Canada etc. and I would not want to be relying on the intestacy laws of multiple jurisdictions. I’d love to hear your thoughts on this and any ideas the commenters may have.

[@nomadcapitalist]

Good idea for further discussion; thanks.

[@johnbado8586]

Weird question but do you help establish portfolios or help elevate starting potential investors or just offer useful general information and tips? It's an authentic and genuine question, also I enjoy your content and advices.

[@rossyl.9887]

Hi, do you have a video on countries that don't depend on the US economy?

[@javieryzabal2122]

Andrew, I owe you a thanks for always sharing this great advice. Going strong with tunnels thanks for the advice.

[@nomadcapitalist]

Thanks, Javier. Our video on "tunnels" is here: kzbin.info/www/bejne/f5a3Z3qcZpdnrsk

[@passivesolar6194]

Excellent. They always make it seem so easy.