Services

The factors to consider include:

• The political and economic stability of the jurisdiction(s) in which a bank is head-quartered, located and regulated
• Reputation and substance – Standard & Poor’s, Moody’s and Fitch rating reports are useful
• Quality of regulation and access to deposit and investor protection and insurance schemes
• Parent company or similarly guarantees
• The business focus of the bank

In general the banks we work with seek to provide services to private banking clients, expatriates, and clients with international commercial activities, such as trading.

These services are provided from both offshore banking and international locations.

Private Banking Clients

Although private banking is not a simple business, there is a very simple business model to keep in mind: “keeping rich people happy”. The definition of “private banking” varies from bank to bank but is generally taken to mean investment management offered on a personalised basis by a bank to an individual with disposable wealth of more than $100,000 (although some banks do not offer private banking services to clients with disposable wealth less than US$ 500,000 or US$ 1 million). Private banking is obviously not synonymous with “offshore”, but the costs of a personalised relationship begin to be worthwhile at the $100,000 + level in the light of the superior gains to be realised from offshore investment. Private bankers probably prefer themselves to be approached and considered as objective financial advisers rather than as an investment-provider, and consequently private banks may not be the most effective choice for a reasonably sophisticated investor who wants to play an active role in the management of his investments.

Expatriates

Numerous offshore banks have sought to specialise in the provision of banking services to expatriates as they perceive such business as being relatively risk free, easy to “systemise” and profitable. In essence, expatriate services encompass managing accounts for people resident outside their home countries who may or may not be employed. The focus of expatriate banking providers is online banking, call-centres, relatively low levels of expertise and the provision of “packaged” investment and protection products, such as life insurance. Whilst the service offered should be professional and “smooth”, the relationship between an expatriate client and his expatriate banking provider could not be characterised as personal or in any way similar to the relationship between a client and a top-flight private bank.

International Commercial Activities

Many of our clients utilise the companies we administer for commercial purposes, such as trading. In such circumstances an offshore bank that specialises in private banking or expatriates will be unsuitable. Our commercial clients seek similar services to an onshore commercial bank and will require access to some or all of the following services:

• Cash management
• Foreign exchange and treasury services
• International trade – letters of credit, documentary collections, cross-border guarantees and global banking services at locations around the world
• Risk management: foreign exchange, interest rate, equity and energy price risk management tools
• Financing
• Payment, receivables and payroll solutions
• Selling solutions: point of sale, e-commerce and merchant programmes
• Speciality solutions, such as dealer, shareowner and fund services
• Expertise in matters such as energy, aviation, shipping or real estate

We know that once we understand our clients and their business objectives we will be able to assist our clients in identifying a suitable bank to work with. Some of the aspects we consider are:

• The nationality, residence and domicile of our client. Banks often have policies that deny, restrict or place conditions upon certain classes of clients from having access to their services, and these policies change from time-to-time.
• The proposed activities of the client company or trust that we administer.
• Opening deposits and minimum balance requirements – these can be surprisingly large.

The availability or otherwise of online bank statements and reports. We have considerable expertise in assisting clients to establish relationships with reputable offshore banking institutions as well as a wide range of international banks.

Over the last 40 years we’ve developed close working relationships with many international banks. In selecting a bank, clients should consider service, credit worthiness, reliability and competence.

All of these banks provide the high-quality service that our clients expect:

• Alpha Bank – Cyprus
• Barclays Bank Plc – London
• Barclays Bank Plc – Mauritius
• Barclays Bank Plc – Seychelles
• Credit Suisse – Switzerland
• Dexia Banque International a Luxembourg SA – Luxembourg
• Hellenic Bank – Cyprus
• HSBC – Hong Kong
• HSBC – Malta
• Nationwide International Limited
• Prudential-Bache International limited – Monaco
• RZB Raiffesisen Zentralbank Osterrich AG – Austria
• Societe Generale S.A. – Geneva
• Union Bank of Switzerland – Switzerland

All the offshore and international banks we work with regard the prevention of money laundering and terrorist financing to be of the utmost importance, so do we.

OCRA Worldwide does not seek to work with offshore banks which have low standards of compliance as, apart from our own desire to only work with reputable partners, the culture and business ethos of such offshore banks must not be flawed.

Consequently the offshore and international banks we work with will seek to:

• Obtain evidence of our clients’ identities
• Develop a documented understanding of our client’s banking and business activities
• Identify the source of funds paid into accounts to ensure that such funds are not derived from criminal activity and to document evidence relating to source of funds
• Monitor banking transactions to identify and forestall money laundering
• Risk assess each and every client
• This means that offshore account opening procedures can be onerous and time consuming.

Typically offshore banks will require some or all of the following information to open and operate an offshore account for a simple offshore company which is owned by individuals (rather than a corporation, trust or other form of entity):

• Certified proof of identity of owners, directors, account signatories and all parties connected with the offshore company.
• Acceptable proof of identity would normally include a passport copy certified in a prescribed manner by an officer of the bank, a notary or an authorised OCRA Worldwide Manager.
• Proof of residence of all parties associated with the offshore company. Acceptable proof of residence would typically include an original bank statement or credit card statement.
• The provision of a curriculum vitae.
• The provision of bank or professional references.
• Information relating to the expected annual income or asset base of the offshore company, the number of transactions per month, the geographic spread of the proposed business and the amount of money that will be left on deposit at the bank.
• A detailed description of the proposed business activity, often supported by documentation such as brochures, copies of contracts, audited accounts, business plans and details of trading partners or investments. Documented evidence relating to source of funds, e.g. if a million dollars is to be paid into an offshore company’s account, the bank will seek to obtain documentary evidence relating to the source of such funds in the form of a bank statement, contract or similar.
• An initial meeting with potential bankers possibly with an OCRA Worldwide Manager.
• Some banks require clients to visit them on an annual basis.

In addition, enhanced due diligence will be undertaken if the affairs of the offshore company are complex or if it, or any party connected to it, is associated with what banks or regulators perceive to be high-risk. For example, stringent enhanced due diligence is typically applied to business emanating from countries which were former members of COMECON, counties classified as “non co-operative” by the Financial Action Task Force, or countries associated with the production and distribution of illegal drugs or infamous for corruption.

Once an offshore account is opened it is important to keep the offshore bank briefed and current with the affairs of a client company or trust. Banks do not react well to unexplained account activity, so if a company’s trading pattern is set to change or a large or unusual transaction is about to occur it always wise to pre-warn the bank and provide documentation such that the bank can understand and maintain evidence of the wholesomeness and reason for the proposed transaction.

Maintaining an efficient relationship with a bank is a two-way process. When OCRA Worldwide provides Directors, Managers and officers to a client company or when OCRA Worldwide provides trustee services, its officers must control any underlying bank accounts.

The reason for this is that there are various legislative and regulatory requirements and precedents relating to the duties of directors and trustees relating to their obligations to exercise effective management and control over a company’s or trust’s assets and affairs. Put more simply, would any reasonable businessperson, aware of the duties and liabilities of directors or trustees, be prepared to act as a director of a company or act as a trustee, if they did not control the company’s or trust’s bank account?

If our clients were to exercise control over bank accounts it could be perceived that they are controlling the affairs of the company or trust even though they may not be officers or trustees. Statutory authorities in high tax and other areas often seek to apply “the management and control test” to assess whether the profits/income earned by an entity controlled in a low tax area should be taxed as if they were resident in the high tax area.

There is an inherent possibility that if we allowed clients to control bank accounts, then a regulatory authority may deem that our clients are effectively managing and controlling the company or trust in their countries of residence or more radically may seek to pierce the corporate veil or judge a trust to be a “sham”.

Most banks offer a comprehensive range of credit and debit card services for either personal or corporate accounts. In many cases, the currency of the card is dependent upon the country in which the bank operates. Many banks have introduced US Dollar and Euro cards to cater for the international market.

In most cases, clients who require credit cards may select their own credit limit by establishing a blocked security deposit, equivalent to 2-4 times the credit limit required. OCRA Worldwide can assist in the application and the subsequent statement administration.

Please contact any of our offices or submit an enquiry to the office of your choice and a consultant will shortly be in touch to arrange a free consultation.