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Hello, I hope you are doing great. This article will walk you through everything you need to know about offshore banking for your British Virgin Islands company. Opening a bank account might make you feel overwhelmed due to its complex documentation requirements. Don't worry, we will make it easy and sorted for you through this article. This blog will add a lot of value to your business decisions about starting off your journey in the BVI and help guide you in the right direction, so I recommend you read till the end.
Let's start this article by understanding why you should even consider banking in the BVI for your offshore company, as the BVI has a lot of benefits to offer. Up next, we will guide you through all the bank options that are available to you for your BVI offshore company. Then, we will quickly go through the generally asked-for document checklist for you to collect and organize for an efficient process. In the last, we will talk about the compliance requirements in order to keep your bank account active and running. Remember to read completely, as opening an offshore bank account is generally considered to be tricky and we want you to have a full understanding.
Benefits of Banking in the BVI
Let us understand what makes the British Virgin Islands a perfect place for your offshore company formation and open a bank account under it.
1. BVI is a white-listed country
Yes, the British Virgin Islands are now a white-listed country. On February 18, 2020, the BVI was removed from the EU's non-cooperative jurisdictions for tax purposes, making it a safe jurisdiction for business and investments.
2. The US dollar is the official currency in the BVI
The USD is one of the strongest currencies worldwide and individuals and businesses worldwide try to keep their money in the USD and transact worldwide with ease in international transactions.
3. The BVI jurisdiction stresses a lot on privacy
With its super strict and offshore founder-friendly privacy laws, it attracts founders and businesses from almost every part of the world while creating a safe environment for directors' and shareholders' identities.
4. Strong economic environment
With the US Dollar as its official currency and the country not being on the blacklist by the EU, the BVI country is now in safe hands and will continue to have strong, growing, business-friendly rules and regulations that benefit individuals and businesses from all parts of the world.
5. Remote opening
Opening a bank account for your BVI company can be done remotely for most banks. You do not need to physically visit the country or branch, as the entire process will be done for you 100% online. It saves on unnecessary costs and the hurdle of physical visits. Just submit the application.
6. Foreigners are welcome
Foreigners and non-residents can easily set up an offshore company in the British Virgin Islands and open their bank accounts effortlessly. There is no requirement to have local resident directors or shareholders. Irrespective of your country of origin, residence, or citizenship, you are free to start your banking journey in the BVI without any hassles.
Select the Bank
There is no requirement for you to open your bank account in the British Virgin Islands (BVI). You can open your bank account anywhere in the world, at your convenience. It is important to search for those banks that support companies incorporated in the British Virgin Islands, as banks do not support companies incorporated in all countries. Banks have to stay compliant with all international and domestic laws in which they operate and, hence, banks follow a stringent approach while approving an account opening application. Instead of approaching the wrong banks for your account opening that have a low probability of approval for companies that are registered in the BVI, it is important to look for those that generally accept applications and have good approval rates for companies that are registered in the BVI.
The first bank that is on the list is the Overseas Chinese Banking Corporation Bank in Singapore, OCBC Bank, which is located in Singapore. It has an initial deposit as well as a minimum maintenance balance of at least US$30,000. This bank also offers flexibility in terms of opening accounts online, while in some cases, it might require you to physically visit them.
Up next, we have the First Caribbean Bank, which is located in the British Virgin Islands itself. It has an initial deposit and minimum maintenance balance norm of US$30,000 and can be opened online.
As another option for you, you have Bank One, which is located in Mauritius and has an initial deposit requirement of USD 50,000, giving you the option to apply for and open your bank account completely online and remotely.
Last on this list of traditional banks is Caye International Bank, which is situated in Belize. You need to maintain an initial deposit of USD 1,000 and can enjoy the flexibility of opening an account online.
You can also try exploring digital banking providers such as Airwallex and Payoneer, which run exclusively online and have fewer entry barriers.
Documents Required for Bank Account Opening
In the next step, you are required to collect and organize the documents and information that are necessary to submit your account opening application to the bank. While each bank will have its own set of document requirements, the document list that I am sharing now would be a general requirement that most of the banks out there would have and are at the bare minimum to open an account with any bank.
The documents are as follows: completely filled and signed bank account opening application forms; previous bank statements that were not generated more than 2 months ago; a copy of a bank reference letter from any of your existing banks; scanned certified copies of passports of all directors and shareholders of your BVI company; scanned address proofs of all directors and shareholders of your BVI company; a copy of your genuine and detailed business plan; certified copies of your BVI company's documents; business trading proofs such as sales or purchase orders, invoices, etc.; and last but not least, the government-issued certificate of good standing of your BVI company.
Please note that these documents are not exhaustive, and banks generally do ask for more documents and information specific to your account opening application and your business's industry. It is important to do a thorough follow-up professionally to receive their decision in a timely manner.
If you are wondering why banks ask for such a long list of documentation, it is to prevent malpractices such as money laundering, terrorist financing, etc. These steps are taken to make the financial system safe for every party involved in the economy, thereby stopping the misuse of resources by ill-players while hampering the value-adding business environment offered by the countries. These banking norms are taken seriously by domestic as well as international lawmakers, and banks always strive to follow all the rules and regulations while adding value to their customs.
Submit the Application and Follow-up
Once the documents are organized and the application forms are filled out, it is time to submit them to your chosen bank in the way the bank has requested. Ensure that you are providing all the documents and information that the bank has requested in order to avoid a clarification request or rejection by the bank. Once the bank goes through the documents, forms, and information, if everything meets the bank's expectations, your application will be approved so that you can start accessing their banking system as soon as possible.
But in case the bank raises any concerns or requests clarification or documentation, you would need to cooperate with them according to their expectations and, most importantly, in time. They may have queries regarding sources of funds, questions about your business model and its authenticity, your proposed usage of the bank account, etc. It is your duty to work on what they request as quickly as possible to submit it for their review.
If the bank is taking longer than their estimated timeline, feel free to follow up with them, seeking any updates. In cases where the bank feels that you do not fall under their account opening guidelines, you will receive a rejection notification from them. The reasons for rejection could be a lack of authenticity in the business, failure to complete documentation, unacceptable businesses such as crypto or gambling, concerns about possible malpractices such as money laundering, etc.
Hence, it is very important to do your homework before approaching banks, such as to see if the bank that you have chosen accepts your business model, if they accept directors and shareholders from your country, if they are open to remote account opening, etc. Doing this homework beforehand will not only save the application costs for the banks but also save you from the hurdles of application form filings and time to follow up.
Complete Initial Deposit Requirements
Once your bank account opening application is approved by the bank, you will be required to deposit the required initial deposit amount into your bank account. In some banks, your initial deposit would be blocked from your bank account and it may be a small amount. It is worth noting that the banks in Singapore and Hong Kong do not block the initial deposit in most cases. Most banks generally require you to keep a certain amount in your bank account as a minimum balance requirement. Please note that you would be penalized or charged a certain sum if you did not hold the minimum account balance. You can definitely look for those banks that have a low minimum balance requirement or for digital banking service providers such as Payoneer and Airwallex that do not have such requirements.
As you can see, Caye International Bank has the lowest initial deposit and minimum balance requirement of just USD 1,000, whereas First Caribbean Bank and Bank One have such requirements at USD 50,000. These banks are the traditional ones that most of the founders of offshore companies prefer in order to safeguard their huge volumes of funds. You also have the option to go with online-only banking companies such as Payoneer and Airwallex, to name a few, who do not have any such initial deposit or minimum balance requirements in most of the cases. Even though these digital banking companies are growing rapidly nowadays, most founders still prefer to rely on traditional banks in order to not take the risks that would arise with such digital companies.
Meet Ongoing Compliance
Your job is not done with just opening a bank account. Banks may request more documents or information about you and your business going forward to ensure that their client base is genuine and is not into malpractices. Every bank needs to exercise strict due diligence while opening and maintaining accounts in order to stay compliant with domestic government norms as well as international government agency rules and regulations. Banks would have built the necessary infrastructure that would raise concerns about a bank account if it was behaving abnormally. Banks never compromise on potential concerns about a bank account.
You need to comply with norms laid down by your respective home country as well, such as the Foreign Account Tax Compliance Act (FATCA) for a US person. If your home country is a member of the G-20 or OECD, then your country's tax authorities will cooperate with each other to curb tax evasion and other ill practices. Hence, you might need to comply with the Common Reporting Standard (CRS) policy. You would need to stay informed about all the rules, regulations, and policies laid down by your home country to enjoy painless banking. You are required to stay compliant with the norms laid down by the bank and cooperate with them on an ongoing basis while maintaining a fruitful relationship with your banker to enjoy uninterrupted banking.
Conclusion
So, yeah, that brings us to the end. In short, you can reap the benefits offered by the offshore banking ecosystem offered to your offshore company incorporated in the British Virgin Islands. Even though it might make you feel overwhelmed with all such complex documentation hurdles, you can have a wonderful banking experience by staying compliant with all laws and regulations throughout your journey. If you play by the rules laid down by the banks and governments, there is no one who can stop you from successfully banking under your BVI company.
If you have any doubts or queries, please feel free to reach out to us in the comments section or email us at hello@vepapu.com so that we can try helping you out if you are stuck anywhere in the process.
If you are looking to incorporate your BVI, then we can handle it for you. We will incorporate your BVI business company in just 2–3 days, 100% online; you don't need to travel anywhere. We will accompany you in every step of your BVI journey, right from name availability checks and incorporation all the way up to filing required annual forms to comply with the relevant rules and regulations of the country to keep your company in good standing.
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