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Offshore Banking & Confidentiality

Has confidentiality been compromised in recent years?

Yes, but with knowledge not as much as may have been feared

In virtually all-Western European countries was traditionally accepted that the relationship between a banker and his client is privileged and cannot be released without specific legal sanction (In the UK see Tournier v. National Provincial & Union Bank of England [1924] 1 KB 491). However, in today’s world it now seems, often under the auspices of headings such as ‘national security’, such confidentiality is a fiction. In fact, in countries such as the United Kingdom banking confidentiality is no longer really in suite with the most recent ruling forcing UK banks with offshore subsidiaries and/or branches to disclose information not on the basis of suspected criminal activities but on a ‘blanket’ basis.

The result is that there is in effect a new reverse burden of proof placed upon those who elected to use a UK owned offshore bank in that they need to prove that they have paid all UK taxes rather than the Inland Revenue needing to prove that they didn’t. Such bureaucracy is certainly a significant departure from the past and certainly anti-business in its nature …. Fortunately, however the SCF Group can assist UK businesses in establishing accounts in jurisdictions where the traditional ‘confidentiality’ is still in situe and unlikely to be compromised in the near future

Bank Introductions for Offshore Companies

The SCF Group offers two different types of Bank Introduction services dependent on your selected Offshore Company Management Option:

Beneficial Owner directly controlled Bank Accounts: This is where we introduce your company to a bank that is already aware of the identities and legal positions of the supplied nominee directors and further is also aware of your beneficial owner status. The advantages of using this service over approaching a bank directly is that the identity verification process will have already taken place for the nominees, leaving only the verification of the beneficial owner to be carried out


Managed Bank Accounts: This is where the SCF Group directly manage your offshore company and act as the directors and secretary. The advantage is that bank accounts can be opened up relatively quickly and further go to establish the separateness of the offshore company from you or your existing companies

Individual Banking Jurisdictions

For more information on the banking systems and confidentiality of individual countries please see below:
Austria Isle of Man
Caribbean & Panama Jersey
Cyprus Luxembourg
Gibraltar Liechtenstein
Guernsey Switzerland

Banking in Austria

Austria has a highly developed banking system and maintains a high degree of banking anonymity. A European Union Member, highly recommended for those seeking a stable banking environment who do not have significant dealings with Germany

Bank & Jurisdiction Confidentiality Rating: 4 Stars
Bank System Rating: 5 Stars

Banking in the Caribbean & Panama

In virtually all of these jurisdictions there are statutes or, in the case of British Colonies, ordinances which generally require strict confidentiality from bankers - A breach of such confidentiality often resulting in penal consequences. In addition, virtually all of this area's exempt and international business corporations allow for 'bearer' shares, do not require any form of annual accounts and maintain few details on public record. On the negative side these are developing countries located near to South America and hence, associated with various illicit transactions. In particular, the United States has put pressure on these territories to demonstrate due diligence, however, the number of arms, drugs and general 'laundering' scandals over the years may cause apprehension amongst ordinary businessmen

Bank & Jurisdiction Confidentiality Rating: 5 Stars (Non-US Residents)
Bank System Rating: 2-3 Stars

Banking in Cyprus

When establishing an offshore company or a Branch of a foreign company in Cyprus details of beneficial ownership must be provided to both the registration agent and the Central Bank of Cyprus. However, if nominee directors and shareholders are used, no information need be on public record save that relating to the said nominees. At the time of registration, personal bank references and passport photocopies will be required together with details on the type of business activities. Under local law information appertaining to beneficial owners cannot be released under threat of penal consequences. In addition, the accounts submitted to the Central Bank at the end of the financial year are also strictly confidential. Nevertheless, the Cypriot authorities will release information. Mere illicit transactions are involved once the proper procedures have been followed, however, Cypriot courts will not enforce another country's civil tax claims

Bank & Jurisdiction Confidentiality Rating: 4 Stars
Bank System Rating: 3-4 Stars

Banking in Gibraltar

Gibraltar has introduced very similar money laundering legislation to both the Isle of Man and Jersey. However, unlike these two jurisdictions it is part of the European Union. It has no double taxation treaty network and gained a very bad reputation in the 1980's due to a number of high profile scandals. Non-resident companies are not subject to the same level of due diligence or monitoring as exempt companies. As with all other respectable European offshore jurisdictions information will be released if illicit transactions are claimed. Most of the recent UK Criminal Justice Act provisions tightening up money laundering and anti-drug enforcement regulations are currently being redrafted for local implementation

Bank & Jurisdiction Confidentiality Rating: 3 Stars
Bank System Rating: 5 Stars

Banking on Guernsey

The Guernsey Financial Services Commission (G.F.S.C.) has made this jurisdiction one of the most closely monitored in Europe. It should also be noted that Guernsey has a tax treaty with the United Kingdom and that this contains exchange of information provisions relating to tax avoidance. Banks must provide beneficial ownership details to the G.F.S.C. In addition, on the formation of companies specific questions are asked as to whether the entity is being formed for UK tax avoidance purposes and, if so, exactly the taxes in question. As with all other respectable European offshore jurisdictions information will be released if illicit transactions are claimed. Most of the recent UK Criminal Justice Act provisions tightening up money laundering and anti-drug enforcement regulations are currently being redrafted for local implementation

Bank & Jurisdiction Confidentiality Rating: 3 Stars (UK Residents)
Bank System Rating: 4 Stars

Banking on The Isle of Man

The Isle of Man has one tax treaty partner, the United Kingdom. As with Guernsey, this treaty allows for an exchange of information relating not only to fraud but also in respect to the avoidance of taxes covered by the treaty. Local company registration agents do not have to keep specific details on beneficial owners but the likely introduction of a Manx version of the British Criminal Justice Act will result in a significantly higher legal 'duty of care' to be placed on bankers and other professionals. Nevertheless, the fact that banks or company registration agents do not have to automatically provide beneficial ownership details to the regulatory bodies means that relatively good confidentiality can be maintained for most legitimate transactions

Bank & Jurisdiction Confidentiality Rating: 3 Stars (UK Residents)
Bank System Rating: 5 Stars

Banking in Jersey

The regulatory position of Jersey is very similar to Guernsey save that the information that must be supplied to local company registration agents will not directly ask for information on a clients UK tax position. Nevertheless, the exchange of information provisions are almost identical to those for Guernsey (Art. 1 0, Jersey/UK Double Taxation Treaty, 1952) and banks are closely monitored. Synopsis; A highly sophisticated banking and financial service jurisdiction with a high duty of care on banks to 'know their clients'

Bank & Jurisdiction Confidentiality Rating: 3 Stars (UK Residents)
Bank System Rating: 5 Stars

Banking in Luxembourg

Luxembourg has perhaps one of the most sophisticated banking systems in Europe combined with complementary offshore and tax planning companies. The jurisdiction has a high degree of banking anonymity. A European Union Member, highly recommended for those seeking a stable banking environment who do not have significant dealings with Germany or France

Bank & Jurisdiction Confidentiality Rating: 4 Stars
Bank System Rating: 5 Stars

Banking in Liechtenstein

Traditionally Liechtenstein has been on of the most secure and secretive banking locations in Europe only equaled by Switzerland. However, in recent years countries such as Germany, the United States and the United Kingdom have sought to compromise that traditional anonymity by forcing the Liechtenstein authorities to disclose the ultimate beneficial owners of local bank accounts. However, it should be noted that where companies and/or local private interest foundations (PIF’s) are set-up these are accepted as legitimate tax planning ‘tools’ and may even be declared without fear of losing tax benefits. For more information please contact one of our consultants

Bank & Jurisdiction Confidentiality Rating: 5 Stars
Bank System Rating: 5 Stars

Banking in Switzerland

Traditionally Switzerland has been on of the most secure and secretive banking locations in Europe only equaled by Liechtenstein. However, in recent years countries such as Germany, the United States and the United Kingdom have sought to compromise that traditional anonymity by forcing the Switzerland authorities to disclose the ultimate beneficial owners of local bank accounts. However, it should be noted that where companies and/or local private interest foundations (PIF’s) are set-up these are accepted as legitimate tax planning ‘tools’ and may even be declared without fear of losing tax benefits especially as Switzerland has one of the most developed tax treaty networks in the world. For more information please contact one of our consultants.

Bank & Jurisdiction Confidentiality Rating: 5 Stars
Bank System Rating: 5 Stars