Clients looking to go offshore for the first time frequently ask "will my new offshore bank be required to report that I have an account with them?" Although there is a lot of variation between countries, the usual answer will be "no.
" If you follow the basic advice in my various articles on this subject, in particular taking care to avoid the effects of the EU Savings Tax Directive, banks will not automatically report anything about your account to anybody.
The more important question is this: will they give up every bit of information they have if asked about the account? Obviously, if someone just walks in off the street to ask about your account, they'll be given a cold shoulder.
But nobody serious will waste their time doing that.
If anyone ever asks your offshore bank about you, the person doing the asking will almost certainly be a representative of the local government in the offshore haven, who has been persuaded to do so by some foreign authority.
You can search around to open your account in the jurisdiction with the strictest privacy laws.
However, if someone with official authority is on the warpath against a specific name or account number, it really doesn't make a lot of difference.
Any bank, anywhere in the world, will co-operate.
Get that: nowhere in the world has privacy laws that will protect you against even casual inquiries from a major western government.
But, they will need to know that the account exists, under what name, and in which bank.
Without that information, investigators can do very little.
Banks might claim that they will respect your confidentiality.
They might even hold out for a while.
If you have taken the time and trouble to maintain an excellent relationship with your bank, they might tip you off that someone was asking questions...
but in the end, they will reveal all.
I promise you.
I thought Liechtenstein had some of the strictest privacy laws.
In fact it did, and still does.
But, if someone breaks those laws, the fact that they are wanted for a criminal offence in Liechtenstein probably won't be of much comfort to you.
That's exactly what happened recently when a former bank employee allegedly sold a list of account holders to German and British tax authorities for five million euros just recently.
In another recent UK case, it was shown that it was actually easier for the British police to obtain information on a bank account on the offshore island of Guernsey, than it was from a bank in the mainland UK! Guernsey (after a few scandals) now bends over backwards to appear co-operative.
Local courts there will just rubber stamp any application for co-operation they get from places like the UK or the USA without giving them serious attention, because to refuse co-operation in a money laundering investigation would be political suicide.
Whereas in the mainland UK, judges still sometimes actually ask some questions and demand to see real evidence of a crime before allowing the police to conduct a fishing expedition into a suspect's banking records.
So much for offshore confidentiality! For the reasons mentioned above, it is well worth considering keeping your money in a more low-profile country, a place where nobody would think of buying stolen bank records for millions of euros.
Remember that everything outside the borders of your own home country is offshore to you.
All banks, especially the offshore variety, offer some degree of privacy.
Exactly how much privacy you get these days depends not so much on the law, but on you! You must verify that there are no routine reporting requirements between the bank where you opened your account and any tax authority that has any possible interest in you.
If they do not file any reports, the bank will not be a source of any leaks - until and unless somebody asks them directly about your account.
If that happens, you should always assume the worst case scenario - that they will spill the beans immediately.
It is up to you to tell absolutely no one about your offshore account.
Jealous ex-spouses and business partners are a major source of information on offshore accounts - and every other kind of damaging information on you.
Everything may be fine now, but who knows what will happen to your relationships over the next few years.
If you want to keep your account secret, you have to keep your mouth shut.
Never leave any records of your secret accounts where others can access them.
We repeat: the only real way to keep a bank account private is to tell absolutely no one about it.
Keep any electronic records encrypted.
The best banking jurisdiction for you will be determined by the type of bank you need and the services you require.
You should read this and my other articles on this subject in conjunction with personalized advice from a competent professional who is familiar with your situation.
" If you follow the basic advice in my various articles on this subject, in particular taking care to avoid the effects of the EU Savings Tax Directive, banks will not automatically report anything about your account to anybody.
The more important question is this: will they give up every bit of information they have if asked about the account? Obviously, if someone just walks in off the street to ask about your account, they'll be given a cold shoulder.
But nobody serious will waste their time doing that.
If anyone ever asks your offshore bank about you, the person doing the asking will almost certainly be a representative of the local government in the offshore haven, who has been persuaded to do so by some foreign authority.
You can search around to open your account in the jurisdiction with the strictest privacy laws.
However, if someone with official authority is on the warpath against a specific name or account number, it really doesn't make a lot of difference.
Any bank, anywhere in the world, will co-operate.
Get that: nowhere in the world has privacy laws that will protect you against even casual inquiries from a major western government.
But, they will need to know that the account exists, under what name, and in which bank.
Without that information, investigators can do very little.
Banks might claim that they will respect your confidentiality.
They might even hold out for a while.
If you have taken the time and trouble to maintain an excellent relationship with your bank, they might tip you off that someone was asking questions...
but in the end, they will reveal all.
I promise you.
I thought Liechtenstein had some of the strictest privacy laws.
In fact it did, and still does.
But, if someone breaks those laws, the fact that they are wanted for a criminal offence in Liechtenstein probably won't be of much comfort to you.
That's exactly what happened recently when a former bank employee allegedly sold a list of account holders to German and British tax authorities for five million euros just recently.
In another recent UK case, it was shown that it was actually easier for the British police to obtain information on a bank account on the offshore island of Guernsey, than it was from a bank in the mainland UK! Guernsey (after a few scandals) now bends over backwards to appear co-operative.
Local courts there will just rubber stamp any application for co-operation they get from places like the UK or the USA without giving them serious attention, because to refuse co-operation in a money laundering investigation would be political suicide.
Whereas in the mainland UK, judges still sometimes actually ask some questions and demand to see real evidence of a crime before allowing the police to conduct a fishing expedition into a suspect's banking records.
So much for offshore confidentiality! For the reasons mentioned above, it is well worth considering keeping your money in a more low-profile country, a place where nobody would think of buying stolen bank records for millions of euros.
Remember that everything outside the borders of your own home country is offshore to you.
All banks, especially the offshore variety, offer some degree of privacy.
Exactly how much privacy you get these days depends not so much on the law, but on you! You must verify that there are no routine reporting requirements between the bank where you opened your account and any tax authority that has any possible interest in you.
If they do not file any reports, the bank will not be a source of any leaks - until and unless somebody asks them directly about your account.
If that happens, you should always assume the worst case scenario - that they will spill the beans immediately.
It is up to you to tell absolutely no one about your offshore account.
Jealous ex-spouses and business partners are a major source of information on offshore accounts - and every other kind of damaging information on you.
Everything may be fine now, but who knows what will happen to your relationships over the next few years.
If you want to keep your account secret, you have to keep your mouth shut.
Never leave any records of your secret accounts where others can access them.
We repeat: the only real way to keep a bank account private is to tell absolutely no one about it.
Keep any electronic records encrypted.
The best banking jurisdiction for you will be determined by the type of bank you need and the services you require.
You should read this and my other articles on this subject in conjunction with personalized advice from a competent professional who is familiar with your situation.
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