I am often presented with the exasperated question from clients about why offshore private banks require such a large amount of personal information from the client. There are clients that definitely believe legendary bank accounts still exist, or that the ‘no questions asked’ policy is enforced by offshore banks when it comes to the sourcing of funds. The truth could not be farther from these misguided facts as strict due diligence policies are enforced by offshore banks.

Even if you wish to open an offshore bank account by mail, it is still possible, provided that you have the correct documentation. As a professional and an offshore banking consultant I get to witness the account opening process of a lot of different banks, in various corners of the world, and they all differ widely.

What do you need to open your offshore bank account? Well the first loops require you to have your passport, proof of the source of your funds and one, but preferably more bank reference letters. Then having these documents ready, many clients still want to know why all the questions are necessary.

I better than most can understand a client’s need for privacy. Many are simply not comfortable with baring all their financial details to all and sundry. However, there are legitimate reasons why the banks want to get to know their customers.

These are the questions I deal with daily as an offshore wealth management consultant. I have witnessed the fallout of the UBS scandal in the US in recent months. The Swiss banking agent, UBS, decided to close thousands upon thousands of accounts in their Swiss branches, where Americans were listed as signatories – even some accounts which have been open for decades! It is widely believed by many creditors that Credit Suisse is possibly next to be hunted. Are there other countries that could offer better privacy and security than Switzerland?

The main motivator for this is because the law requires them to. In any upright country banks are required to gather some information. Failure to do this will have undeniably calamitous penalties which may even render the bank being closed and employees jailed. The reason why anyone considers offshore banks is because they seek security, and dealing with dubious institutions willing to bend and break rules is not a good way about looking for security!

Banks also need to protect their good reputations in order to protect their honest clients. Should they decide to bring onboard clients that bring with them bad publicity and problems to the bank, it is bad news for everyone involved.

At the end of the day it is good business practice and sense to know who you are dealing with. Should your bank know a bit more about you, and where you emanate from they will be in a better position to cater to your exact needs and offer you the best possible service.