Is it possible to open a bank account for a foreigner. Opening accounts in foreign banks
Reasons to open an account in foreign bank citizens of Russia can be very diverse.
The desire to maintain privacy, the need to work with foreign partners, getting higher and guaranteed than on domestic banks, interest on deposits, just transferring money is not a complete list of situations when such a measure may be needed.
Moreover, it is required to open an account precisely abroad, since banks with foreign capital operating in Russia are practically not much different from domestic ones.
The main reason for opening an account abroad by Russian citizens is, of course, the advantages that this option has in comparison with the traditional use of the services of Russian banks. The most significant of these are the following:
- Reliability and confidence in the safety of money. This mainly refers to situations when an account is opened in countries with a stable financial and economic situation. Given the current situation in Russia, almost all developed countries can be reckoned among these with confidence. Transferring money there is the key to reliability and peace of mind for Russian citizens.
- Confidentiality of information and protection of interests of the client. Bank secrecy still, despite the numerous efforts of the official authorities of the most influential states of the world, including Russia, remains one of the basic principles of the majority banking systems. This is not surprising, as it is one of the most significant factors that attract customers.
- Benefits in obtaining loans at the bank where the account is open. The standard and widespread system of providing benefits when lending to own clients is extremely profitable and effective. Especially in recent years, when due to the imposed sanctions, the activity of working with foreign banks among domestic individuals and legal entities has significantly decreased.
- Status and new business prospects. Account and money in foreign bankIn addition to confidence and reliability, they also give an additional status to the owner, physical or legal entity.
In addition, despite the fact that in the vast majority of foreign credit organizations interest rates are much lower, they are taken much more seriously and serve as an additional plus when considering various business projects.
Therefore, transferring money to a foreign account is an additional plus for the business of an individual.
A rather long list of advantages provided by accounts abroad in a foreign bank explains the presence of a large number of intermediary companies providing services for opening them and helping to transfer money from Russia abroad.
Opening an account: step by step instructions
Opening an account with a foreign bank abroad is a rather complicated procedure, requiring the solution of a large number of financial and legal issues.
Therefore, it is advisable to seek help from one or more consulting firms. But in this case, it is necessary to present the main stages of the event.
Country selection
One of the most important issues, the solution of which largely depends on the goals of opening an account. One can conditionally group foreign states according to the peculiarities of their banking systems, formed by decades of successful work.
Stand alone banks of Switzerland - they are most suitable for those who want to save capital in the most reliable way. Using it is not so profitable, since in most Swiss banks there are restrictions on the number of operations and the limits on account balances are quite large.
Nevertheless, transferring money from Russia to a Swiss bank means ensuring their guaranteed safety.
Banks of other Western European countries no less reliable and also very prestigious, but extremely expensive when conducting cash management services. Interest rates they are usually low. In addition, one should take into account the difficult political situation and the existing sanctions, which at any time can be unpredictably expanded.
In recent years, Russians have been actively using services baltic banksespecially Latvia and Estonia. Their undoubted advantages are:
- modest prices for servicing foreign customers;
- the convenience associated with the fact that almost all bank employees speak Russian, in addition, they perfectly represent the specifics of Russian business and the characteristics of customers.
But in the case of Baltic credit organizations, as well as Western European ones, a rather risky political factor should be taken into account.
A separate group of states with attractive conditions for the provision of banking services is Singapore and Hong Kong.
It created a favorable financial and economic climate for those wishing to do business in Southeast and East Asia, relatively low prices for services. The disadvantage is the unfavorable conditions provided for deposits.
It is advisable to use Asian banks to conduct business, but not to store and increase available funds.
Registration or purchase of a company
To open a foreign account, you need a company registered there. This condition is one of the reasons for the multiplicity. offshore companies - a significant part of them was created not for doing business, but for owning assets and managing accounts.
Given the great demand, in almost any state where account opening is actively practiced to foreign clientsThere are many intermediary firms offering services for the creation or acquisition of firms.
The procedure for buying a finished company may take only a day. Opening a new one is slightly longer, but cheaper. In this way it makes sense to move, in the case of a serious intention to conduct foreign business.
The presence of a company registered abroad is an additional guarantee of the reliability of an open account, since when resolving possible property disputes it is located in the zone of international law.
Bank selection
The banking system of each state has its own characteristics. But credit organizations, its components, can also be quite different from each other.
The experience of several financial and economic crises of recent years has shown that even large and seemingly reliable financial structures can be unstable and extremely unstable. Therefore, the choice of a particular bank is an important and crucial stage in opening a foreign account.
But given the huge amount of official and verified information available on any bank, making a choice is quite simple. Numerous ratings can provide additional assistance, among which it is necessary to pay special attention to the leading agencies Moody’s, S&P, Fitch Ratings.
Application for opening an account
Almost always, when opening a foreign account, a standard list of documents will be required:
- application for opening an account with originals of signatures of the future account holder or director of the company;
- documents confirming the identity of the future owner of the account (copies of passport or driver’s license);
- recommendations of other credit organizations;
- constituent documents of the company.
Often (but not always) the immediate presence of a potential account holder is required.
Features of a foreign bank account abroad
With a fairly strong similarity of the banking systems of various states, each of them still has its own characteristics. When opening a bank account abroad, they must be taken into account.
For example, the period for opening an account in different countries can be that 1 day to a month. In most cases, this procedure takes about a week.
In most cases, it is proposed to open one of three types of accounts (their various combinations are also available):
- current. It is used mainly for conducting foreign business, interest on such accounts is either very low or absent;
- investment. It is opened if the client wants to make long-term investments in various securities;
- escrow. It is necessary to save funds and increase them due to relatively high interest on deposits. However, money cannot be used until the end of the deposit period without loss of accrued interest.
It is also necessary to take into account the peculiarities of domestic legislation on the need to declare existing foreign accounts.
Conclusion
Opening an account with a foreign bank abroad is not particularly difficult. The main thing here is to follow the recommendations of specialists or simply use the services of one of the many consulting firms.
How to open an account in a foreign bank site site
The global financial and credit system has by now become a perfect, high-tech, global mechanism, and starting to use it, having “merged” with the international community, is becoming easier every day. This makes one think, including how to open an account in a foreign bank for a Russian citizen. Contrary to the stereotype, the issue is relevant not only for owners of impressive conditions, but also for citizens whose incomes are not so large.
European, American, Asian structures do not formally impede such a decision, as well as national legislation (including Russian). However, in practice, the procedure can become a serious “headache” for an unprepared person. It's connected with:
- serious requirements that structures put forward to non-residents - before opening an account with a foreign bank, you will have to collect a voluminous package of documentation and prepare;
- inconveniences and difficulties that accompany the transfer of funds from one institution to another, if they are located in different jurisdictions;
- strict conditions that the owner is required to fulfill in order to maintain the account in a “working condition”;
- the need to comply with the requirements of national monitoring bodies and so on.
Nevertheless, not trusting the domestic credit system with its ups and downs, citizens of the Russian Federation are actively interested in how to open an account in a foreign bank for an individual, and already at this stage they encounter difficulties. To begin with, the representative offices of foreign structures working within the country's borders and they themselves are not the same thing. If a bank is opened in Russia, then its activities are regulated by the Central Bank of the Russian Federation, issuing a license and monitoring the implementation of domestic legislation. Therefore, regardless of the source of capital, the subsidiary is not spared the "country" risk, and in order to avoid it, you need to contact the office in the territory of another state.
Is it possible to open an account in a foreign bank for a Russian citizen in such circumstances and how does the national law “look” at this?
Legal aspects of the procedure
The legal norms of the Russian Federation do not prevent citizens of the country if they want to get an account outside it and fulfill all the requirements of the law. An exception may be separate categories persons - occupying high state and administrative posts, members of the Board of Directors of the Central Bank, some other federal structures, plus their families. The full list is specified in legislative norm No. 79-FZ of 05/07/2013.
Is it possible to open an account in a foreign bank for a Russian citizen, if he constantly resides in the jurisdiction? Of course, there are no restrictions on the use of all services. For all individuals, no matter where they are actually located, the procedure is simpler than for legal entities. However, in this case, it is impossible to conduct business transactions, so many decide to “tie” accounts to companies, sometimes basing them specifically for this.
At the national level, the procedure and features of working with foreign banks are governed, first of all, by the legislation on currency regulation and the Instruction of the Central Bank No. 100 of 08.29.2001. If the rules were extremely stringent ten to fifteen years ago (for example, it was necessary to obtain permits from the Central Bank), today the procedure is simplified - the currency can be any convertible, it is permissible to open several accounts, managing them without restrictions. But you need to fulfill only a few key requirements:
- open accounts only in structures located in the FATF and OECD member countries, since Russia is included in international activities to prevent the laundering of criminal capital;
- for a year to withdraw the amount equivalent to not more than 75,000 US dollars - according to the Instruction, it is mainly intended to exercise the right to purchase valuable papers and private operations;
- annually submit reports to the tax authorities in which the movement of money is recorded (balances at the beginning and end of the year, aggregate amounts for crediting and debiting), independently generate a declaration, calculate and transfer personal income tax.
The list of permitted operations is also very organic - going beyond its “framework”, non-compliance with at least one of the requirements will entail financial sanctions in the amount of 75-100% of the amount of illegal transactions. Also, the tax service must be informed about the fact of issuing the account, and, no later than 30 days after the completion of the procedure, otherwise a fine will be imposed on the person, which can reach up to 5000 rubles. Before you open an account with a foreign bank, you need to check whether the state has tax agreements with Russia - if available, the funds can be transferred to the budget of the relevant jurisdiction.
The procedure for issuing foreign national accounts
Foreign credit institutions also put forward their own requirements for applicants for partnership with them. How to open an account in a foreign bank for a Russian citizen if he does not have significant “justifications” - a residence permit, business, real estate in the country? This is quite possible: not all institutions cooperate only with naturalized individuals (although they do so, for example, Swedbank and most of the structures of the United Kingdom or Singapore).
In general, the following accounts are opened for private clients:
- classic settlement and savings and deposit (for the accumulation of interest);
- registered - to manage them it was possible from different banks;
- depository, serving securities and financial assets;
- license plates - for example, in Switzerland they are used to conduct confidential transactions.
In most cases, the applicant will have to personally come to the office (this is required by all structures in America) or meet with his representative in the Russian Federation. Many institutions, especially those working with a serious clientele, have a manager’s departure service, and some banks conduct telephone or Internet interviews.
How to open an account abroad for Russian citizens, so as not to travel abroad? Take advantage of the intermediary representation - with the help of a certified own signature (at consulates, partner banks), delegate the work to a professional expert. You can also choose a structure where there is a remote opening service - cards and documents after they are executed are delivered by courier. This is how many Baltic banks work, and they, along with Chinese, are one of the few that register accounts with small amounts. Typically, the threshold of cooperation for non-residents is 50-100 thousand dollars, and well-known corporations (UBS, Barclays, Credit Suisse), as a rule, place funds from one million.
On the other “pole” of the comfort of relations are the institutions of Britain, which can require a huge number of documents, up to utility bills and recommendations on trustworthiness. Swiss structures are often asked to provide at least two letters of recommendation - each bank has its own requirements. The decision to satisfy the petition or not is made by the officer, and failures are not uncommon. It is necessary to prove the legality of ownership of funds - provide income statements for six months to a year, Russian banking history etc. Also, before opening an account with a foreign bank, an individual must show:
- passports and their notarized copies - for applicants and their spouses;
- certificate of place of residence - internal passports, receipts of utility bills;
- certificates from the place of work, family composition, lack of criminal record, and so on.
A potential client writes a statement, attaches to it certified and translated into the desired language documentation, after which it is accepted, providing papers for the tax office. Further, the application is considered, and the process can drag on for several days, weeks, or even months. If everything is framed correctly, the client receives the details and can begin to use the account.
Features of working with foreign accounts
We have already figured out how to open an account abroad for Russian citizens, but there are nuances in its use. You need to remember about the deposit insurance system and the requirements for the minimum balance:
- for offshore structures, they are not burdensome ($ 100-200) or not at all,
- in serious European can reach up to 300-500 thousand euros.
Some institutions do not welcome cash replenishment, and for wire transfers, you will have to take the documentation and confirmation of tax registration (to present to the local bank where the accounts are issued). You can control the movement of financial flows through.
Opening an account abroad is one of the sought after services. Funds abroad may be required by private and corporate individuals. It is advisable that the procedure for opening an account is quick and confidential. This is especially true against the background of deoffshorization processes. Banks do not need lengthy checks and in-depth analysis of each client’s transaction.
For whom?
Is it possible to open a Russian account in a foreign bank? Yes. The need for this service may arise for people who intend to conduct an online business abroad or simply want to deposit funds at a higher percentage.
How to open a bank account for a foreign citizen:
- Select the type of account and country for investing.
- Collect a package of documents and provide them directly to an intermediary or financial institution.
- Register a company (for legal entities).
Let us consider in more detail each stage.
Country selection
Individuals can open an account with a credit institution without intermediaries. However, the list of banks that are willing to communicate with the client is very small. Especially when it comes to maintenance financial transactions in Luxembourg or Monaco. Although, against the backdrop of modern political realities, even industry leaders such as Switzerland and Singapore are losing their positions due to pressure from international organizations. Respectable banks open an account only after personal communication with the client and depositing minimum amount deposit.
You can open a bank account in a foreign bank offshore countries. These financial institutions prefer to work through intermediaries who not only conduct an initial check of clients and the source of funds, but also determine which credit institution is best to cooperate with.
Western European banks are not interested in non-resident cash settlements. Very high tariffs are set for such operations. For frequent transactions, it is better to open an account with a foreign bank in Estonia or Latvia. Financial institutions of Singapore and Hong Kong welcome foreigners who do business in East Asia, and accept deposits only on very large amounts of deposits. An account in Switzerland is best used to preserve capital, and not for active trading. Credit institutions set high requirements for a minimum balance, and the number of operations is limited.
Every year, Russians have increased interest in banks in the Baltic countries. In financial institutions, service is provided in Russian for a small fee. Before choosing a particular institution, it is worthwhile to clarify the reliability rating of the bank, the size of the minimum deposit and requirements for foreign customers.
Lithuanian banks as additional documents also require a certificate confirming the source of funds. This can be an extract from a personal account, a contract or documents of ownership real estate. A notarized copy of the beneficiary’s internal and foreign passport translated into English may also be required. Some banks register an account only after a personal visit by the manager to a branch of a financial institution.
It is much more difficult to register an account with an Austrian bank. The client needs to prepare in advance a large package of documents, answers to questions about the origin of funds, as well as minimum deposit in the amount of 200 thousand euros. Some financial institutions open an account after depositing 5 thousand euros. This amount is not used as a deposit, but is immediately credited to the account and can be used by the client.
Types of accounts
Before opening an account with a foreign bank, an individual needs to choose an account type. The highest requirements are provided for investment. They are designed to diversify assets consisting of classic and new investment products. It is important to choose the right strategy - risky or with minimal profit. Such accounts are not suitable for regular payments. A large fee is charged for transferring funds.
For ongoing operations, it is better to open an account with a foreign bank with a retail focus. In such institutions, you can open a classic deposit, savings account or use standard investment products. You do not have to overpay for service fees.
Documents
In order to open a bank account in a foreign bank, you must provide:
- a statement with the original signature of the owner;
- copy of passport or driver's license owner;
- letters of recommendation from other institutions;
- company documentation package.
The timing of paperwork depends on the internal rules of the bank. Some institutions open an account within one day, while others check documents for more than a month.
Allowed Operations
To an account opened with a foreign bank, individuals can credit:
- the amount of interest on deposits;
- minimum deposit required to open an account;
- cash received as a result of conversion;
- rF currency transfers between foreign accounts of two residents or their close relatives;
- transfer of a foreign currency resident to an account of another resident opened with a bank outside the Russian Federation, provided that the transaction amount for one day does not exceed $ 500 at the Central Bank rate.
Company registration
Offshore companies today are used not so much for business as for ownership of assets and foreign accounts. You can contact the intermediary and buy an already registered company. The paperwork will take one day. Those who are really ready to do business abroad are better off registering their own LLC. Moreover, a foreign company owning a Russian company takes care of any property disputes within the framework of international law.
Open account in a foreign bank remotely
The procedure for registering an account is quite lengthy. It is necessary to collect a large package of documents, translate them into English and notarize. In order not to spend a lot of time, you can open an account in a foreign bank via the Internet. The main advantage is that the client does not have to personally visit the bank branch. However, a deal without intermediaries will not work.
The global trend indicates that offshore banking is getting more expensive. Five years ago, you could open an account for $ 200 and spend the same amount on annual maintenance. Today, banks conduct more transaction verification operations. As a result, the cost of payments and the commission for servicing an account are constantly increasing.
Offshore
It is easier for a legal entity to open a bank account in a foreign bank than an individual. This service is provided immediately after the registration of the company. Abroad, foreign companies can not carry out financial work for cash.
You can’t buy an offshore with an account already open. The bank may recommend the jurisdiction with which it cooperates. But this does not mean that the specified company will provide the services the client needs. For example, some Latvian banks do not officially accept documents from classical offshore countries such as Anguilla, Antigua, UAE, Panama and Belize.
Tighter rules
In 2013, Russia became a member of the tax information exchange system. Now she can receive data on foreign accounts of Russians from other countries. Under the law, Russians are required to inform about the availability of an account with a foreign bank. With the introduction of the new system, tracking the “silent” will be easier.
What does it mean?
A citizen of the Russian Federation has the right to open an account with a foreign bank. However, according to the Federal Law “On Currency Regulation”, currency residents are obliged to notify about the opening and changing the details of an account with a foreign bank. The declaration in the Federal Tax Service must be submitted annually until 01.06. This norm has come into force since 2015.
Limitations
Before you open an account with a foreign bank, you need to inquire about the restrictions. Thus, foreign currency residents cannot credit income from the sale of real estate and grants to their accounts. The penalty for violation of this requirement is 100% of the transaction amount. If a citizen works in Estonia, sold an apartment in Tallinn, and credited the received funds to an account with a local bank, then the next visit to the Russian Federation will end badly. In such cases, you need to open an account with a foreign bank in Moscow, and then transfer funds abroad. This restriction does not apply to persons who have been living and working in Estonia for many years and do not come to the Russian Federation at all.
Reporting
Citizens of the Russian Federation are required to report to the Federal Tax Service about the opening, closing, changing details and the movement of funds in each of the foreign accounts. At the same time, tax authorities may request additional information about individual transactions. A reporting form has been developed specifically for this purpose. The completed declaration can be independently transferred to the tax officer, sent through the taxpayer’s office. Persons who are not registered in the Russian Federation can send a letter to the territorial office of the Federal Tax Service at the last place of registration.
Taxation
Not all currency residents transfer taxes to the budget of the Russian Federation. If a person is not considered a tax resident, then he is not obliged to pay funds to the treasury of the Russian Federation. In many respects, this also depends on the agreements of Russia with a particular country.
According to Art. 207 of the Tax Code, tax residents are Russian citizens who:
- live in the Russian Federation for more than 183 days a year;
- have a residential property owned or registered at the place of residence in the Russian Federation.
Fines
If the tax authorities themselves learn about opening an account abroad, a fine of 2-3 thousand rubles will be imposed on the taxpayer. In case of violation of the deadlines for submitting reports for up to 10 days, the amount of the fine will be reduced to 500 rubles. For a repeated offense will have to pay 20 thousand rubles.
Issue price
Most problems arise when withdrawing cash. SEPA operates in Europe - a single zone of European payments. You can withdraw funds from cards at any bank in all the countries of Europe, as well as in financial institutions in Hungary, Poland, the Czech Republic, Romania, Bulgaria, Sweden and Denmark, without a commission. But these rules do not always apply. A client who has issued an account in Italy and is trying to withdraw funds in Switzerland should be ready to charge a commission. For interest-free withdrawals, it is better to use Sberbank ATMs, which are represented in many countries of Eastern Europe, or Citibank. This international bank has branches in more than a hundred countries of the world. In any country in the world, a transaction to cash out funds from bank cards in "native" ATMs is not subject to commission.
The profitability of deposits is also doubtful. In addition to the commission for opening and maintaining an account, the depositor will have to pay income tax. In Switzerland, non-resident income is taxed at a rate of 35%. Income is accrued on the deposit at a rate of 0.25%, and this is only if the currency of the account does not differ from the national one. That is, it is impossible to make money on a deposit in a European country. But the client will need to pay a fee for opening and maintaining accounts.
Simple formality
Reporting is quite simple, says Zakharov: a two-sheet form, on the first - the applicant's data, on the second - information on accounts in a foreign bank. If there are more than one account, then the Federal Tax Service must file the first sheet and several copies of the second sheets, equal to the number of accounts, he says.
After the tax office receives your report, it may have additional questions. The FTS press service confirms this: for the purpose of exercising currency control, it has the right to request additional documents.
In this case, the taxpayer has a week to provide the necessary securities - for example, a statement of cash flow bank account, says the lawyer of the legal service CorpLaw.Pro Julia Mikhalchuk. “It is better to get these documents in advance at the bank,” Zakharov advises. According to him, most likely, extracts on cash flow and letters on opening and having accounts with such banks may be needed.
Mikhalchuk from CorpLaw.Pro also notes that it is not necessary to go to the country where the bank is located - you can receive extracts by e-mail. The lawyer, however, fears that the Federal Tax Service will be able to demand documents with seals. “So far, no one knows how to circumvent this norm, and perhaps clarifications from the Ministry of Finance or amendments to laws will be needed,” she says.
Immediately after submitting the report, you may experience several problems.
Tax problems
First of all, you have to pay taxes. Personal income tax at a rate of 13% is taxable on any income from bank accounts abroad: this is coupon income, rent from the rental of foreign real estate, and the sale of securities through management company. Also, since the beginning of 2016, income tax has been charged on interest on deposits with a foreign bank, recalls Zakharov from Paragon Advice Group.
The 2015 declaration company ended on April 30th. Mikhalchuk says that it was necessary to report on income received, including to foreign accounts, in the form of 3-personal income tax. Non-payment or incomplete payment of taxes under Article 122 of the Tax Code means a fine of 20 to 40% of their amount.
If the income tax, for example, received from the rental of real estate, is paid in the same country where a foreign account is opened and exceeds 13%, then Russia does not need to pay anything, notes Klenov from UFG Wealth Management.
But so that the Federal Tax Service does not have questions, it is better to provide her with a tax return from another country and payment documents if you manage your property yourself. If the trustee deals with this, then you need to get help from him: it is he who in this case is tax agent, says Klenov.
According to Zakharov, tax claims for previous years can be avoided with the help of capital amnesty - before July 1, 2016, a special declaration can be filed. “It is necessary to indicate the balance of the account abroad and attach a notice on opening an account. This makes it impossible to attract you for tax evasion, ”he says.
Problems with the currency legislation
Most Russian citizens are not only tax, but also currency residents. This concept appeared in 2012. According to the law on currency regulation, these are all citizens who have a Russian passport, except for those who “have been living for at least a year” abroad for a residence permit, work and study visas.
PwC partner Maxim Kandyba says that the phrase “at least a year” means: it’s worth to appear in Russia for a day, and you are a currency resident. Zakharov, however, believes that the fact of registration at the place of residence or stay is important here. When it comes to emigration, a citizen is eventually discharged from his home in Russia, and tracking his short-term visits to his homeland for tax purposes is difficult, he says. Under Russian law on the right to freedom of movement, a citizen is required to register at the place of stay within 90 days.
Currency residents have great restrictions on the use of foreign accounts. They are allowed to transfer funds from other banks (including Russian ones), credit interest on a deposit, deposit cash and profit from the conversion of funds.
All these norms are listed in the 12th article of the law on currency regulation. In addition, you can credit salaries, travel expenses, social payments - pensions, scholarships, benefits. But you can’t receive grants for them, the Finance Ministry specified at the end of 2015. This is a violation of currency laws.
In countries that are members of the OECD and the FATF, you can additionally credit loans and credits in foreign currency, income from rental housing, coupon income from securities, and income from trust management of your funds (if they are managed by a non-resident of Russia) . For example, Bulgaria, Montenegro and Cyprus, popular among Russians, are not included in the FATF or the OECD.
All operations not included in this list are prohibited, otherwise you will face a fine, says Dmitry Klenov, partner at UFG Wealth Management. Partner at Paragon Advice Group Alexander Zakharov said that the fine could be from 75 to 100% of the amount of the prohibited operation. The same is said in article 12.25 of the Code of Administrative Offenses.
In fact, it looks like this: if your foreign account received a profit of $ 100 from the sale of securities (this operation is not allowed by currency legislation), the fine can be from $ 75 to $ 100. You can avoid it by using the amnesty of capital, admits Maples. It applies to all illegal operations on foreign accounts on the date of filing a special declaration, says Zakharov. The declaration can be submitted before July 1, 2016.
Account hiding
Reporting to the Federal Tax Service on foreign accounts means a huge number of problems - from extracting statements from foreign banks to the possibility of tax and currency claims. “Everything is done so that a person no longer wants to use foreign accounts. I believe that most of the citizens will not report, ”says one of the consultants on condition of anonymity.
What awaits them in this case? According to the currency legislation, if you did not report the account at all and the Federal Tax Service will eventually become aware of it, you will have to pay a fine of 4 thousand to 5 thousand rubles. Penalty for late informing - from 1 thousand to 1.5 thousand rubles. The punishment for not having time to provide documents on the movement of funds in the account is about the same: 10 days or less - from 300 to 500 rubles, more than a month - from 2.5 to 3 thousand rubles. Repeated violation will cost 20 thousand rubles.
Violation of tax laws is more expensive. If you did not inform the tax service about your account abroad at the same time and at the same time received income on it for many years, this is already tax evasion, argues Klenov. In this case, the Federal Tax Service may require additional taxes and a fine: from 100 thousand to 300 thousand rubles. depending on the unpaid amount.
International Financial Advisor FCP (Financial Management) Ltd. Isaac Becker is sure that eventually the accounts will be known. “Even if you remain silent today, the information will sooner or later appear in the tax service, subsequently they will knock on you not only for a fine,” he says.
On May 12, Russia signed an international agreement on the automatic exchange of financial information, which includes more than 80 countries. “It will begin in 2018, and the first reports will most likely go exactly on the basis of this year,” Zakharov said. However, according to him, for this Russia will have to conclude an agreement with each of the countries separately - only then will the mechanism begin to work.
Klenov says that so far Russia can request information on the currency accounts of specific citizens for earlier years, up to 2002. Therefore, Becker advises those who have accounts abroad not to delay and promptly inform the tax inspectorate about them, using the amnesty.
What awaits the investor, student, expat and trader when using foreign accounts
Rent from renting foreign housing
It all depends on where the foreign account is opened, to which income from rented housing comes. If in the OECD and FATF countries, then you are acting within the law, says Maxim Kandyba. If in other countries, the forecast is disappointing: you are violating currency laws. In this case, income from leasing property in any case is subject to personal income tax at a rate of 13%.
Account report
Tax law:
— 13%
tax if the account is opened in the “authorized” OECD and FATF countries
from 20 to 40% from the sum
Currency legislation:
- fine from 75 to 100%
from 300 rub. up to 3 thousand rubles.; for repeated violation - 20 thousand rubles
Account hiding
Tax law:
- requirement to pay taxes at a rate 13%
- fine from 100 thousand to 300 thousand rubles. for tax evasion
Currency legislation:
- fine 4-5 thousand rubles.
- fine from 75 to 100% credited funds (if the account is not in the “authorized” countries)
Withdrawal of money abroad before emigration
This is the simplest case: you yourself transfer money from a Russian account to a foreign one. You simply won’t be able to notify about opening an account abroad: a Russian bank will immediately require a notice with a mark tax service on opening an account with a foreign bank. Otherwise, the translation will simply not be released from Russia, says Alexander Zakharov.
Account report
Tax law:
- tax 13%
from interest on account balance
- possible penalty for tax evasion from 20 to 40% from its amount
Currency legislation:
- a possible penalty for being late with a report on the movement of funds on the account from 300 to 3 thousand rubles.; for repeated violation - 20 thousand rubles.
Account hiding
- Impossible
Foreign University Scholarship
If a person studies abroad, he does not tax resident Russia, Zakharov believes. However, if training, as it usually happens, began in September, and the student spent more than half a year in Russia, then he remains a tax resident. At the same time, a student may turn out to be a currency resident if study lasts less than a year or from time to time he comes to Russia. The fact of receiving a scholarship does not violate the currency legislation in any way: this is a fully authorized operation. The only exception is grants: they cannot be credited to foreign accounts. In addition, the scholarship is not taxed at all in Russia (this is stated in Article 217 of the Tax Code).
Account report
Currency legislation:
- Possible late fee with a report on the movement of funds on the account from 300 to 3 thousand rubles.; for repeated violation - 20 thousand rubles
Account hiding
Currency legislation:
- fine 4-5 thousand rubles. for lack of account statement
Emigration, salary in a foreign company
You do not violate Russian currency legislation, even if you remain a citizen of Russia. You can receive a salary to an account abroad. Most likely, you are not a tax resident of Russia: you become one, only being in the country more than 183 days a year. This case assumes that you have withdrawn from registration in Russia and no longer live here, so you can’t talk about currency residency. Short visits to Russia do not oblige you to anything: the requirement to register at the place of stay occurs only when traveling for more than 90 days. In this case, there is no need to report on foreign accounts. However, if you decide to return to Russia for permanent residence, you will have to report, but from scratch.
Account report
- Not needed
Account hiding
- no consequences
Securities Trading
This is the most difficult case: the number of permitted transactions with securities in the currency legislation is limited. In fact, only coupon and interest income on securities, as well as payments on bonds, can be received on a foreign account. But at the same time only in the OECD and FATF countries. Since the beginning of 2016, accounts abroad have also been allowed to credit trust income (if the manager is not a resident of Russia), Maxim Kandyba explains.
All these incomes are subject to personal income tax at the rate of 13%. At the same time, tax is also levied on exchange rate differences: if you bought a bond for $ 100 and sold it for $ 100, then it is likely that you still made a profit in rubles due to the growth of the dollar and pay the tax, reminds Filinov from PwC. According to Zakharov's Advice Group, from January 1, 2018, permission will enter into force to credit the proceeds from the sale of the securities themselves to foreign accounts. But so far this is a serious violation: a fine for him is 75-100% of the amount of income. At the same time, the redemption of bonds is not a transaction for the sale of securities, and therefore, is permitted by currency legislation, Zakharov claims.
Account report
Tax law:
- tax 13%
from income (if the account is opened in “authorized” countries)
- possible penalty for tax evasion from 20 to 40% from the sum
Currency legislation:
- a possible penalty for being late with a report on the movement of funds on the account from 300 rub. up to 3 thousand rubles; for repeated violation - 20 thousand rubles
- fine from 75 to 100%
Account hiding
Tax law:
- requirement to pay taxes at a rate 13%
- fine from 100 to 300 thousand rubles. for tax evasion
Currency legislation:
- fine 4-5 thousand rubles. for lack of report
- fine from 75 to 100% credited funds (if “unauthorized assets” in “unauthorized” countries were credited to the account)
25.06.2018
Foreign banking for non-resident clients has recently become a constant source of news. And if some of them turned out to be quite predictable (especially for those who in one way or another used the services of foreign financial institutions over the past years), then others will still have to get used to.
If before banks fought for a future customer, offering better conditionsand while clients could afford a choice from a variety of options, now banks are carefully selecting a “suitable” client, taking into account a variety of factors - from the jurisdiction of the company to the business biography of its beneficiary and the legality of the origin of its funds. Under pressure from international organizations and national regulators in the field of banking services non-residents are constantly "tightening the screws."
Nevertheless, a foreign bank account has been and still remains an indispensable tool in international business, since the task of opening a bank account arises for almost everyone who registers a business abroad or expands its borders. Therefore, further - about everything in order.
Why do I need a foreign bank account?
Corporate Account in a foreign bank is necessary for convenience of calculations companies with their business partners (customers, suppliers), accumulation of monetary assets, payment of mandatory payments, maintenance salary projects, use of corporate bank cards, etc. Such an account can be opened both in the same country in which the company is registered, and in another country or countries.
One of the most important advantages of opening a foreign account for a foreign company (and not for an individual) is lack of currency restrictionsstipulated by the Russian legislation for currency residents of the Russian Federation. To foreign companies do not apply obligations to notify tax authorities about opening a foreign account, submitting reports on the movement of funds on the account, as well as restrictions on crediting funds to the account.
For citizens personal foreign account needed in the case of employment or obtaining a residence permit abroad, ownership of foreign real estate and in many other cases. In addition, many customers simply decide to keep and / or invest part of their funds abroad in order to preserve or increase personal or family capital. Only for certain categories of citizens (senior officials, civil servants) the opening of foreign accounts and the use of foreign financial instruments is prohibited by law.
The main disadvantage of a personal foreign account is its very limited functionality. The currency legislation of the Russian Federation allows residents of the Russian Federation to credit to such an account only those categories of funds that are directly named in the law, classifying all other operations as illegal. Such restrictions are lifted only if the person loses the status of a currency resident of the Russian Federation.
Types of accounts
Foreign banks usually offer the opening of settlement and / or savings accounts.
Settlement Accounts are intended for regular transactions involving frequent crediting and debiting funds on the account, which is necessary when the company conducts normal operating activities (trading in goods, rendering services, etc.). Some accounts may operate in settlement mode, however, they require maintaining a constant minimum balance in the account in a certain amount or placing an investment portfolio.
Savings (investment) accounts are opened for the purpose of saving and / or investing client funds and, as a rule, cannot be used for current settlement operations.
How to choose a foreign bank?
At present, choosing a bank to open a bank account for a foreign (especially offshore) company is becoming an increasingly difficult task. It depends on many factors, starting with the structure of the company’s ownership and the type of its activity, and ending with the particularities of the policy of the national banking regulator.
Here are just some of the questions whose answers should be clarified by choosing a foreign bank:
- does this bank work with companies (including from offshore jurisdictions) and non-resident individuals?
- does the bank offer settlement accounts (i.e. accounts for frequent incoming and outgoing transfers)?
- will this bank accept customer service with this type of activity, with these beneficiaries, with these business partners and payment directions?
- in which currencies can payments be made (it depends on the availability of the corresponding network of correspondent banks) and are there any currencies you need among them?
- what are the bank rates?
- what are the ratings, reputation, financial indicators and prospects of this bank?
- and much more.
Therefore, in order to choose a foreign bank to open a corporate or personal account abroad, we recommend that you contact only those specialists (professional intermediaries and bank agents) who are familiar with the current (and constantly changing!) Situation in the field of opening accounts and can objectively assess the chances of opening an account taking into account all the factors inherent in a particular client and bank.
In which country do I open an account?
For the purposes of opening corporate accounts for foreign (including offshore) companies, banks can be divided into three main groups:
1. Banks of Europe. Basically (except Switzerland. Liechtenstein and Montenegro) these are banks of the European Union member states that are subject to the requirements of the pan-European regulator - the ECB. Inside this group should highlight:
- banks of the Baltic countries (Latvia, Lithuania, Estonia);
- banks of Cyprus;
- banks of Central Europe (Poland, Hungary, Czech Republic, etc.);
- banks of Western Europe (Austria, Liechtenstein, Luxembourg, Switzerland);
- other banks (Montenegro, etc.)
Banks of this group continue to be popular when opening corporate accounts for foreign companies. Many of them have Russian-speaking customer support.
However, most European banks (as well as any other banks) are characterized by an increasingly lengthy processing of applications for opening an account, a request from the applicant for various additional information, and also (especially for Western European banks) rather high tariffs. And, most importantly, the banks of most of these countries today moved away from the practice of opening and servicing accounts of offshore companies (for example, it is now impossible to open an account in a Latvian bank with an offshore company or with an partnership formed from offshore companies such as LP or LLP).
Only some banks, despite the general negative attitude towards offshore companies, continue to consider opening investment accounts of offshore companies on terms favorable to the bank (namely, investing in bank products or maintaining a significant minimum balance), of course, with full satisfaction of all other requirements by the client.
2. Banks of Asia (Hong Kong, Singapore).
Asian banks as a whole are focused on business that somehow works in the Asian region or with partners from it. They are also characterized by a general trend towards deoffshorization and strengthening due diligence procedures.
Hong Kong banks today have virtually refused to open accounts for residents of Russia and other CIS countries or companies with beneficiaries from such countries. In order to open an account with a Hong Kong bank, an in-person interview with the Bank manager in English or Chinese is always required without the help of an interpreter (directly in Hong Kong). At the same time, banks only consider companies that have a real office in Hong Kong (it should be borne in mind that such companies are taxable in Hong Kong).
Today, only Singaporean companies can open an account with Singapore banks, and their directors and shareholders must be residents of Singapore. The director must exercise real authority to manage the company and have exclusive access to her bank account.
The relative disadvantage of Asian banks is also the more complicated communication between the bank and the client, due to the lack of Russian-language support, as well as a significant difference in time zones (which is relevant for the European part of Russia).
3. Offshore banks (Saint Lucia, Mauritius, Seychelles, Saint Vincent and the Grenadines, etc.).
Offshore banks are banks in offshore jurisdictions that have traditionally specialized in serving non-resident customers. However, today such banks not only do not have any significant advantages over banks from onshore countries, but they also lose to them, primarily because of their offshore image and extremely limited options for settlements with certain countries and in certain currencies.
Fact that most developed countries negatively relate to offshore banks, which complicates the establishment of correspondent relations with them and prevents payments. In particular, for this reason, offshore banks (with the exception of banks in Mauritius) have recently experienced difficulties with settlements in US dollars. Therefore, if you need to pay in USD, as well as with American / European / Russian partners, opening an account in an offshore bank is usually not advisable.
On the other hand, the procedure for opening an account in an offshore bank today is practically no different from similar procedures in other banks. As elsewhere, the client is required to submit the required package of personal and / or corporate documents as part of the due diligence and know-your-customer procedures. An application for opening an account can be considered for a long time. An offshore bank, like any other, will refuse to open an account if the potential client does not comply with the bank’s policy and the risks for the bank are exceeded by the client. During settlement services, offshore banks may as regularly as ordinary banks, request supporting documents for current customer transactions.
We also add that foreign banks should not be confused with banks operating in Russia with foreign capital, which, although they operate under the corresponding foreign brands, but, like any russian banksare subject to Russian law and the requirements of the Central Bank of the Russian Federation. The foreign banks in question here are banks located outside the Russian Federation and subordinate to the relevant foreign regulators. In Russia, such banks can operate only in the form of representative offices officially accredited by the Central Bank of the Russian Federation that do not open accounts and do not carry out banking operations.
Procedure for opening an account in a foreign bank
In order to open an account with a foreign bank, you must:
- Choose a foreign bank.
- Personally visit the bank’s office directly abroad, or meet with a bank representative or contact the bank’s authorized partners in their country. A number of banks (in particular, banks in Latvia, Cyprus, Switzerland, Mauritius, Saint Lucia) allow you to open accounts remotely (without going to the bank). In other cases, a personal visit of the future account manager to the bank branch is required (typical for banks in Poland, Hungary, Hong Kong, Singapore, etc.).
- Fill out bank forms and provide a complete set of documents required by the bank. If necessary, also provide any additional documents and explanations.
- Wait for a decision on opening an account.
Each bank makes its own requirements for the form and content of client documents. However, in general terms, the following is required from a client (opening an account with a company):
Firstly, a set of corporate documents (originals or certified copies - depending on the requirements of a particular bank).
Secondly, information about the activities of the client’s company, including:
- a description of the business of the company to which the account is opened (often also copies of contracts and invoices confirming the declared activity);
- data on counterparties for incoming and outgoing payments;
- estimated parameters of the account (annual turnover, number and frequency of operations, etc.).
The activities of the client’s company within one open account must be fully understandable jar legal and more or less uniform (ideally, one account - one type of activity). The declared activity must be similar to the existing resident business of the beneficiary of the company.
Thirdly, the client provides information on the beneficial (i.e., actual, ultimate) owners of the company. This information includes:
- personal identification documents;
- proof of address of residence;
- data on sources of income (this can be any documents confirming legal sources of origin of funds: certificate of employment, employment contract, data on entrepreneurial activity, savings, etc.);
- bank statements and statements;
- letters of recommendation from significant business partners;
- names and activities of existing resident (for example, Russian) client companies (including links to their websites, other materials);
- a resume with data on education and career (as noted above, it is important that the beneficiary has work / business experience in the field that is declared as the main activity of the company to which the account is opened).
Recently, banks have been paying special attention not only to information about the client (applicant) and its beneficiary, but also about his partners, which should be as clear and transparent to the bank as the future client himself. For example, if your counterparty is a British partnership (LLP, LP), then the bank may be interested in who and what is behind it, up to clarifying the resident business of the beneficiaries of such a partnership. Further, the presence of the counterparty in any sanction lists, or even simply communication with third parties from such lists, may cause refusal to open an account.
The term for consideration of an application for opening an account may currently be from 2 months and more. An expedited application process is not provided. At the same time, there are no guarantees that the account will be opened.
If the application is approved, the customer is assigned an account number, means of access to the Internet account management system, bank cards (if necessary) are issued.
Compliance Due diligence. Know-your-customer
These foreign words have long been familiar to everyone who had to open foreign accounts and fill out bank forms.
Banking compliance is the bank’s internal procedures for identifying and assessing customer satisfaction, based on both information provided by a potential customer and obtained from other sources available to the bank. The Bank collects and analyzes such information, implementing the principle of “know-your-customer”, and, in a broader context, the principle of “due diligence”, applied not only in banking practice, but also in business as a whole.
Compliance with these principles is not a whim of the bank: it is due to the need to comply with the requirements of the national (and also for the EU countries - supranational) regulator and norms aimed at combating money laundering and the financing of terrorism (AML / CFT). The indicated work to one extent or another has always been carried out by banks, however, in the last decade, the “rules of the game" have changed dramatically in the direction of tightening. For example, failure to provide the bank with the documents required by it, confirming the origin of the funds received, or a sharp deviation of the grounds (nature) of payments from those that were declared when opening the account, may well become the reason for its closure.
A relatively recent innovation is the requirement to indicate the place in banking forms tax residency the company and its beneficial owners (as well as their tax identification numbers and information about the active or passive nature of the company) for the purpose of implementing automatic exchange of information according to the CRS standard.
Another complicating factor was the policy of anti-Russian sanctions. In connection with it, they can refuse to open an account either directly to a Russian citizen or foreign company, the shareholder or beneficiary of which will be a Russian, one way or another appearing in the sanctions lists.
Given that the approach of banks to assessing customer satisfaction has long ceased to be formal, when opening a foreign account, you must be prepared to inform the bank not only of the standard information about the company to which the account is opened, but also
- details of your existing resident business,
- identification and biographical data of the beneficial owners of the company (including detailed work experience),
- comprehensive information on the sources of origin of their funds,
- and other information required by the bank.
Therefore, adaptation to the new rules implies careful and advance documentation of the operations of your both foreign and resident business, personal income, sources of wealth, taxes paid, and not only while working with foreign account, but also for several years preceding the moment when it became necessary to open an account abroad.
Key Account Opening Trends
So, the choice of reliable foreign banks that are ready to service the accounts of non-resident companies (especially offshore) is currently very limited and continues to narrow. Why? Here are some reasons:
- Refusal from offshore. Foreign banks reduce the share of offshore companies in their client portfolio or refuse to service them at all (moreover, the criterion may be not only the offshore jurisdiction of the company, but also the lack of real economic content - these companies are called shell companies). Somewhere this will happen at a time, somewhere - in stages. For example, in the light of the well-known events related to the self-liquidation of the Latvian ABLV bank in the spring of 2018, many other banks have intensified the cleaning of their portfolios from “unwanted” customers. In Latvia, the decision to stop servicing shell companies' accounts was made at legislative level. In the very near future, other countries, primarily Cyprus, may follow this example, where the introduction of new requirements for banks is expected in the summer of 2018.
- The reality of the business. Preference is given to companies whose country of registration coincides with the country of the bank, or to companies that have a real economic presence in their country (office, assets, personnel), financial statements and paying in it taxes, as well as having any connection with the country of the bank in which the account is opened.
- Clarity and transparency of the client. Banks strive to accept customers with a fully understood business, a transparent source of income and character cash flow, as well as with completely acceptable (for a number of parameters) beneficiaries and counterparties.
- Strengthening due diligence requirements. Such requirements continue to be strengthened both in relation to potential and existing customers of foreign banks (in particular, on identification of beneficiaries and documentary evidence of operations).
- Close to zero chances foreign start-up companies (so far not able to confirm the relevant experience of previous activities and indicate counterparties), as well as companies representing “high-risk” categories of business (for example, blockchain and cryptocurrencies, unlicensed forex, payment systems, gambling, dual-use goods) have an account open destination, precious metals, etc.). Traditionally, loyally (subject to other conditions), banks relate to international trade, freight forwarding and logistics activities, understandable IT projects, and financial services licensed in the EU countries.
- U.S. dollars. The situation with transfers in US dollars has deteriorated sharply (for example, banks in Latvia, as well as a number of offshore banks, have completely refused to open accounts in this currency).
- Sanctions. The attention of banks to various sanctions lists and the corresponding categories of individuals and companies has increased. The presence of “sub-sanctioned” persons among the declared beneficiaries or contractors (or any connection with them) will result in a refusal to open an account.
- Customers from Russia. Practically targeted discrimination against Russian customers takes place (a peculiar “presumption of guilt” is being formed in relation to customers from Russia and other CIS countries). However, even such circumstances do not preclude the application of an individual approach and the search for acceptable solutions.
- Automatic exchange. In September 2018, the second phase countries, including Russia, Switzerland, Austria and many classic offshore jurisdictions, enter the practical phase of the automatic exchange of information on financial accounts under the CRS standard. This means that data on personal and corporate bank accounts (primarily, accounts of companies with predominant passive income), the beneficiaries of which are residents of the Russian Federation, will be sent to Russia tax authorities countries that have agreed to such an exchange.
It is too early to predict its results, however, if the automatic exchange is fully implemented, it will be possible to talk about a completely different level of transparency. tax information in the world.