INTERSHORES I Account Opening Perspective From An Offshore Banker

The CEO of Capital Security Bank in the Cook Islands shares his opinion on account opening in 'China Offshore' as below:


Entrepreneurs spend much effort in selecting the right banking partner.   Their consideration includes the offshore jurisdiction, its legal framework from asset protection, privacy,*strength of regulator,  financial standing of the selected bank such as history, management, financial status and products provided by bank, the banking procedure including but not limited to speed of account opening and disclosure.  When considering to start a banking relationship, bank is interested in the following:


1.   Source of wealth 

The key area in assessing new banking relationship, bank needs to know how did the prospective customer accumulated his/her wealth as they have legal obligations to understand where the client’s wealth has been generated.   The prospective customer has to provide detailed information to satisfy the bank’s appetite.


2.   Source of funds

This is a relatively easy question.  Where will the initial deposit from the prospective customer?  From his/her local bank account or sourced from disposal of shares from a securities account?


Bank can then verify this information from the prospective customer.


3.   Purpose of account

Why would the account is needed?  Where will the payment be ?  This will be more be industry and countries specific.


4.   Politically Exposed Persons (PEP) 

Financial Action Task Force (FATF)  has defined politically exposed persons and issued guidance for handling PEP.   From a bank’s perspective, it has to identify if the prospective customer is a PEP and decides if they accept PEP.  If so, how far the due diligence process be taken especially on the source of wealth and purpose of the account to be opened.


5.   The application form

Banks construct their application forms as a means to collect the information they need to ensure the account is complete and meets their legal obligations.  Incomplete application forms equal more time spent on follow-up correspondence.  The prospective customer has to ensure application form is properly completed to avoid hiccups (e.g. more queries from bank) during the account opening process.


6.   Supporting documentation  

Supporting documents including but not limited to identity proof (certified/notarized passport and address proof) of the directors/shareholders/beneficial owners/bank signatories of the account holder and business proof will be required.  The key to approval is sufficient and proper supporting documentation to justify the applicant’s business.   Some banks may use mobile app to verify passports or drivers’ licenses against a self-taken photo or via a video conference call.


Bear in mind, the bank is as keen as the customer to have a new client on board. 


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Whilst reasonable care has been taken in provision of information above, it does not constitute legal or other professional advice. INTERSHORES does not accept any responsibility, legal or otherwise, for any error omission and accepts no responsibility for any financial or other loss or damage that may result from its use.  In particular, readers are advised to take appropriate professional advice before committing themselves to any involvement in jurisdictions, vehicles or practice.









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