First Steps International, Ltd.

Two Banking Systems

Over many year of working with clients from around the world, that the process of acquiring an international offshore bank account can be both alluring and intimidating at the same time.

In fact, the processing of opening a personal bank account, or even more cumbersome a corporate account, can often by a trying for the client. However, believe it or not, it can be just as trying for the service provider. Even worse, in many cases, these concerns can be alleviated by understanding the client’s requirements in greater detail.

As well, it is important for prospective banking clients to understand what banking options are available in offshore jurisdictions; as well as how they are typically utilized by citizens, residents and foreigners alike.

It is very typical for an “offshore” banking jurisdiction to have two completely separate banking systems; an international system for foreign individuals and entities; and a domestic system for citizens and residents. These systems will exist in the same country but typically have very different services for very different client bases.

Domestic Banking

In Belize, for example, the domestic banking system is denominated in the Belize dollare (tied 2:1 to the US dollar) and is used predominantly by business and individuals for transacting business in Belize.

The domestic or “local” bank accounts could be opened for businesses or individuals; are savings or checking accounts; have debit cards and local offices and are denominated in Belize dollars.

Businesses that wish to be paid in Belize currency can have credit card machines that will take payments from abroad and convert them into Belize dollar payments.

Banks offering these services would required their clients, both corporations and individuals, to be citizens or residents of Belize before allowing them to open “local” bank accounts.

International Banking

In direct contrast, international banks are looking for corporate and personal clients that are focused on doing business outside of Belize. These accounts are used by companies that want to do business “everywhere but Belize” as they do not interact with the Belize local economy easily.

They are denominated in non-Belize dollars typically offering US or Canadian dollar accounts. They are used primarily as savings accounts for individuals, trusts and corporatrions. And, depending on the bank, some will allow small operating companies to transact business effficiently.

Rest Assured-It’s a Process

Opening accounts is a process and one that is typically unfamiliar to our clients. The majority of the disconnect surrounds the collection of paperwork for the account opening process. As well, the process takes time, is typically not well defined, varies by bank and country and communication can often be challenging. For this reason, many clients utilize our facilitation services.

Regardless of which type of account client request is requested, or by whom, there is always a good deal of documentation required by the individual who will ultimately benefit from the ownership of the account; this person is referred to as the “Ultimate Beneficial Owner” or UBO. And, in almost all cases, is typically, You.

Know Your Clients (KYC)

As a regulated industry banks are required to gather documentation to ensure they know who is conducting business at their banks. In a few select jurisdictions, at very specific banks, clients are allowed to open accounts remotely; meaning without a physical visit with the banking officials. In other jurisdictions, these meetings would be required before an account is opened.

Some banks and jurisdictions require more stringent background checks than others, but all jurisdictions will have their basic “Know Your Clients” (KYC) check list. These documents are required to be in the banks files at all times while your account is active with them. The include items such as passports copies, utility bills, and reference letters that must be included with your application.

The likely hood of anyone ever looking at these items in your file is pretty close to nil. However, at some banks they are even required to have physical pages with original wet signatures. Yes, it sounds crazy and, maybe some day it will change, but for now that’s what is required.

Facilitate or DIY?

The decision to utilize a service provider to facilitate account openings versus doing it yourself is not always an individual decision. While some banks are completely fine taking applications directly from the clients, there are other banking institutions that require an introduction or referral before taking a client application.

In all cases, however, we are matching our clients needs with the banks. So, we ask these types of questions before making recommendations:

• Are you looking for a domestic or international account?
• Are you looking for savings, investment or operating account?
• Do you need a corporate, trust or personal account?
• Where will you be sending money to?
• Where will you be receiving money from?
• What number in dollars and transaction do you expect each month?

If you are comfortable answering these questions, you have a ton of patience, and a lot of free time, then you may be a do it yourself candidate.

We have found our clients utilize banking facilitation services to:

• Match their needs with the appropriate international bank;
• Ensure their application and documentation are thorough, complete and approvable;
• Save time and effort on what can be frustrating process;
• Get the results they desire in a timely fashion.

Feel free to reach out should you have questions or are looking for some guidance on your international banking requirements.