Opening an offshore bank account - what you should know

There are a lot of misconceptions about offshore bank accounts. Many people think they’re only for multinational companies or millionaires, or are used to avoid paying tax.

But in actual fact, offshore accounts can be a legal and cost-effective way for businesses of all sizes to manage financial commitments in other countries.

In this guide, we’ll bust some myths around offshore bank accounts, and explain what they actually are. Plus, the benefits of opening one and how to go about it. We’ll also cover an alternative for international banking - the Wise Business multi-currency account.

Table of contents
What is an offshore bank account? Why use offshore accounts? Common misconceptions around offshore banking The benefits of an offshore account Are there any downsides? Need an alternative to offshore banking in Singapore? Try Wise Business How to open an offshore bank account Other important factors to consider before opening FAQs for offshore banking accounts

What is an offshore bank account?

In its simplest terms, an offshore account is just a bank account you hold in a country you don’t live in. Businesses use them to manage funds in countries they trade in, so they can make and receive payments in multiple currencies¹.

For example, a business owner based in Singapore wanting to trade in Malaysia may want to open an offshore account there, so they can send and receive payments in Malaysian Ringgit (MYR).

You can also hold savings and investments in offshore accounts. They’re also useful for people who make or receive international payments regularly.

Why use offshore accounts?

If your business deals with customers, suppliers or partners overseas, having an offshore account can make international payments and operations smoother. Here’s why you should consider having an offshore account.

1. Save on currency exchange fees: An offshore account makes it easier to receive and send payments in local currencies. If your business requires a high volume of transactions in a particular country, having an offshore account allows you to avoid fees that come with the constant need for currency conversions. Alternatively, having a multi-currency account like Wise Business allows you to hold foreign currencies without having to convert them back to your home currency.
2. Establish a local presence: Having an offshore account in a country where you serve local customers or deal with suppliers can help your business build trust in the market. An offshore account may also give you access to the country’s payment systems and allow you to tap into lower transaction fees.
3. Separate accounts for ease of accounting and financial control: Having separate offshore accounts allows you to track your cash flow by market or region. This could ease your accounting processes and give you a big picture view of your business in each location.

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Common misconceptions around offshore banking

If you’re new to the concept of offshore banking, the following misconceptions may be holding you (and your business) back.

1. “Is it legal to have an offshore account?” Offshore banking itself isn’t illegal, although it’s true that the term has often been associated with tax evasion, money laundering and other shady activities. It’s perfectly legal to put your money in a bank account in another country, provided you follow the rules and regulations of both your home country and the country you’re banking in. What is against the law is using your offshore account to evade taxation, hide wealth or hold money acquired through illegal practices².
2. “Offshore accounts are only for the ultra-rich” Many assume that offshore accounts are only for the wealthy. Granted, you will need to understand the local laws and will be required to produce proof of your business during your account opening³, but offshore accounts are very accessible to businesses and even freelancers who work internationally.
3. “Offshore banks are too risky” Many offshore banks are fully licensed and regulated in reputable jurisdictions. You will have to do your due diligence and choose a credible bank with strong compliance practices.

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The benefits of an offshore account

There are many potential advantages for business owners considering opening an offshore account. These include¹:

• The option to operate accounts in multiple currencies. This can minimise the costs involved with currency conversion - in some cases, you may be able to reserve currency prices in advance.
• Higher interest rates and lower taxes compared to domestic accounts.
• The opportunity to diversify investments, spreading them (and the risk) across assets in various countries.
• More privacy. Depending where you choose to open your offshore account, you may benefit from a higher level of privacy than when banking in your home country. For example, through confidentiality agreements.
• The option to keep your money in a central and secure location, while still connected to your local bank accounts.
• Flexibility when moving abroad (or moving your business abroad). Offshore accounts help you to prepare for a move by opening an account in advance, and let you keep the same account every time you move.
• Access to international financial and investment advice.

Are there any downsides?

There are some potential drawbacks with offshore bank accounts, meaning it’s worth taking the time to decide if they’re the right option for you. These include²:

• High initial deposits. Some accounts also require you to keep a minimum amount of money in order to avoid extra fees
• Less protection under deposit guarantee schemes. In Singapore, bank account holders have protection of up to S$100,000 per account as part of the Singapore Deposit Insurance Scheme⁴. Offshore accounts may not offer this protection for your money.
• Higher costs. Offshore accounts often have higher transaction and admin fees compared to ordinary domestic accounts. We’ll look at these in more detail in a moment.

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Need an alternative to offshore banking in Singapore? Try Wise Business

If you’re looking for an easy way to receive and manage payments from customers in foreign currencies without the hassle of traditional offshore banking, consider a multi-currency account like Wise Business. It is fast to set up, easy to manage, and you’ll enjoy mid-market exchange rates with no hidden fees.

💡Need to pay or get paid in foreign currencies? Wise Business could be a better alternative business account as you can hold, send, receive and exchange 40+ currencies all in one place. You’ll always get the mid-market rate with low, transparent fees. Even better, you can connect Wise Business cards to your account to control team spending in real time and reduce admin.

• Hold and manage 40+ currencies for all your international transactions.
• Pay foreign currency bills and ad-hoc business travel expenses using the Wise Business card without hefty foreign transaction fees.
• Get your first Wise Business card for free when you open a Wise Business account.
• Always get the mid-market rate with transparent conversion fees starting from 0.26%.
• Seamless integrations with popular accounting software.

➡️Get started with Wise Business today

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How to open an offshore bank account

Step 1 - Finding an offshore account

The first thing to do is to find an offshore account. Some countries and banks are known for their attractive offshore banking services⁵^,⁶, such as:

• BNP Paribas, BPCE and Credit Agricole in France
• Commerzbank and Deutsche Bank in Germany
• Bank Delen and KBC Bank in Belgium
• DBS Treasures in Singapore
• BCGE, BCN, Julius Baer, UBS and Vontobel in Switzerland
• ABN AMRO, ING and Rabobank in the Netherlands
• First Abu Dhabi Bank and Emirates NBD in the UAE
• Barclays, HSBC and Lloyds in the UK
• HSBC and Standard Chartered in Hong Kong
• SBM Bank and Mauritius Commercial Bank in Mauritius
• JP Morgan Private Bank in the US

If there’s a particular country or currency you want to trade in, you may have to go bank to bank to see which offers offshore accounts. You can also look into non-bank providers, like the Wise Business account.

Step 2 - Opening your offshore account

The process of opening an offshore bank account is pretty similar to opening an ordinary domestic account. You’ll usually need to provide²:

• Full personal details, plus all the necessary company information (including registration number) for your business
• Passport or valid photo ID
• Proof of address
• Proof of income.

You might also be asked for other documentation for anti-fraud purposes, such as statements and references from your existing bank showing that your finances are in order and above board.

In many cases, you can open offshore bank accounts online⁵, although some banks may require you to visit in person to verify your identity.

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Are there any costs with offshore accounts?

There are some costs involved with offshore accounts, so it’s wise to do some research before opening one.

Offshore bank account minimum deposit

The first thing to check is the minimum initial deposit. This can be very high, depending on the bank and account.

For example, if you’re a Singapore business owner wanting to open an offshore account in the UK with Barclays Bank, you’ll need to deposit at least £100,000⁷.

There may also be charges for dropping below a certain minimum balance threshold. For example, with Barclays, you’ll be charged £40 GBP a month if your balance falls below £100,000⁷.

Transaction fees

Another key charge to check is for transfers and day-to-day banking transfers.

To use our Barclays example again, while online and mobile banking transfers are free, users of the international bank account would be charged £35 GBP for transfers made via phone or in-person at the bank⁸.

You should also find out whether the bank charges for withdrawals, using your debit card or closing your account.

💡Speaking of fees, consider the case of how Axpara, a Singapore-based software business, discovered that hidden fees were draining their finances every month. Learn how the company fixed this issue using Wise Business, saving over SGD 50K annually.

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Offshore banking in Singapore

Singapore ranks among the most stable and well-regulated financial centres globally, hence it is no surprise that Singapore offshore bank accounts are highly sought after by international companies. The big three banks, DBS, OCBC and UOB, offer offshore banking services for international businesses, with DBS Treasures being a popular option⁹.

Singapore offshore bank account minimum deposit

To be eligible for DBS Treasures International Banking, new clients would need to have a minimum investable asset of SGD 350,000 in Singapore or HKD 1,000,000 in Hong Kong.

➡️ If you are a local business looking for a bank account for your business, read our guide on the best Corporate Bank Accounts in Singapore instead.

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Other important factors to consider before opening

• Bank reputation: Select banks with a history of financial stability and that are known for their transparency and regulatory compliance. This ensures that your funds remain safe and accessible while you run your business.
• Onboarding provisions: Unless you can afford to travel to the country where your offshore bank is located, you should check if the bank of your choice allows you to open the bank account remotely. You may also need to check how long it takes for the bank to process your application.
• Security: Make sure that the bank you choose has a strong regulatory policy and trustworthy digital security measures. You should find out if the bank has any deposit protection schemes and if it is being regulated by a credible authority like the Monetary Authority of Singapore or the Financial Conduct Authority in the UK.
• Taxation: Understand the tax laws in your home country and the country of your offshore bank account to ensure that you remain compliant with tax reporting obligations on both ends.
• Jurisdiction: Select countries that are politically stable, friendly to foreign businesses and have a strong financial reputation. For example, Switzerland and the United Arab Emirates are known to be popular jurisdictions for offshore bank accounts⁵.

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FAQs for offshore banking accounts

Is offshore banking legal?

Yes, offshore banking is legal as long as you comply with tax laws and report your assets and financial activities².

What are the tax implications of having an offshore bank account?

Having an offshore bank account does not exempt your business from taxes. You will need to report account balances and income to your local tax authority. It is best to consult a tax professional to ensure that your business remains compliant.

Can businesses open offshore bank accounts?

Yes. It is common practice for businesses that frequently deal with international clients and suppliers to rely on offshore bank accounts for fast and cost-effective payments.

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Sources:

1. What is offshore banking? | HSBC
2. Offshore Banking Isn’t Illegal, Hiding It Is | Investopedia
3. How to Open and Access an Offshore Bank Account | Investopedia
4. SDIC
5. 7 Best Offshore Bank Accounts & Countries | Status
6. Best Offshore Banks | NomadCapitalist
7. International Bank Account | Barclays
8. Fee Information Document | Barclays
9. DBS International Banking

Sources checked on 27 July 2025