Foreign bank accounts are an integral part of offshore asset protection. Clients who establish limited liability companies or corporations in foreign jurisdictions for asset protection frequent ask where and how their entities can set up a foreign bank account. This past week I visited an executive manager of a well-established offshore trust company that assists asset protection for U.S. citizens. The company serves as manager of foreign LLCs or as trustee of foreign trusts. The manager told me that the offshore banking environment has changed significantly in the past year or two as the IRS has cracked down on banks that have maintained secret bank accounts for U.S. taxpayers.
Because of the IRS tax scrutiny, U.S. clients seeking offshore asset protection are finding it more difficult to open bank accounts. This offshore trust company I met with has always recommended that their clients’ asset protection entities use Swiss banks, not the banks in Caribbean or central America where their offshore asset protection entities have been formed. In the past year or two the better known and largest Swiss banks have made it very difficult for U.S. citizens to maintain bank accounts in their own name or through their offshore asset protection companies. These Swiss banks have become wary of accepting any clients who might bring IRS scrutiny. There are, however, still banking opportunities in Swiss banks for asset protection entities. The person I met with has had success referring his clients to smaller Swiss banks that specialize in private banking relationships. For example, he mentioned that he has had good results with private banks such as Bank Sarasin & Cie, AG and Lombard Odier bank. He mentioned other banks as well that solicit U.S. clients.
I have not had any experience with and cannot recommend any Swiss banks. Each person interested in offshore asset protection must do reasonable due diligence of any bank involved in his asset protection plan. Remember always that offshore banking for asset protection has no income tax advantages, and instead, may require additional tax reporting to the IRS.
posted by Jonathan Alper, asset protection and bankruptcy attorney, Orlando, Florida
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