Can I open a bank account in another country?

Despite having a bad reputation for facilitating tax evasion, it is possible and legal for Australians to open a bank account in another country, also known as an ‘offshore account’.

There are numerous reasons people might choose to open a bank account in another country - overseas investment, higher interest-earning potential or to access foreign banking services.

The process for opening an offshore bank account may differ depending on the financial institution and country in which you’re opening the account. Typically, you will need to provide identification, such as: 

• your passport;
• a local bank statement; and
• a signed declaration confirming the source of the money being used to open your account.

Can anyone open a bank account in another country?

There are often negative and criminal connotations attached to offshore banking. It’s also seen as a tool that’s generally exclusively available to the wealthiest in society, however, both these sentiments can be untrue.

While there are nefarious individuals and companies that use offshore banking as a means to hide their money and avoid paying domestic taxes, many regular individuals have an offshore bank account as a means of growing or diversifying their finances.

As long as your banking activities aren’t breaking any domestic or international laws, you can legitimately open and maintain offshore accounts. Australians have offshore bank accounts for a variety of reasons, including running a business in a foreign country, expanding their investment and banking portfolios and spending significant amounts of time overseas or in a particular foreign country.

Additionally, if you are moving to a foreign country for work purposes, it’s commonplace to open a local bank account to receive income. However, this may not be considered an offshore account due to residency location.

There can be legal tax benefits in holding your money in an offshore account but it may be sensible to consult a financial advisor that’s skilled and fluent in this particular area of banking.

How to open an offshore bank account

Your ability to open a bank account in another country will depend on a range of factors specific to the intended financial institution and country. It may be easier in some places than others.

Opening a bank account in another country is often similar to opening an account in Australia. You’ll typically need to provide personal information such as your name, date of birth, residency address, citizenship status and occupation.

As is the case in Australia, these details will need to be verified by the financial institution with whom you’re applying for an account. You’ll need to have copies of original documents that you can scan, send or post. Additionally, there may be extra layers of security, credentials or information (e.g. notarised documents, bills, payslips, bank statements) required to positively prove your identity.

You’ll want to conduct plenty of research before you decide to open an offshore bank account. Consider the following checklist when determining if you want to open an overseas bank account:

• Investigate the legal requirements for opening a bank account in that country
• Check the financial institution’s website for application details and information pertaining to offshore accounts
• Have all your documentation and relevant information handy before applying for an account
• Find out the interest rates, fees, accessibility and rules for offshore accounts
• Decide on the type of account - a transactional account for investment or a holding account for savings

Transacting with an offshore bank account

Depending on the country and financial institution, you may be able to choose the currency in which your money is deposited and held in offshore accounts. You can generally use international money transfers to send funds from your Australian bank account/s to offshore accounts but it’s important to check with the financial institution where you’ll be depositing funds to ensure they accept your selected method of payment.

There are often additional fees and currency exchange rates attached to these types of transfers, compared to regular domestic fund transfers. You may want to consider these costs and how they might differ bank to bank.

If you’re going to be making regular withdrawals from where your funds are being held, you may want to consider whether you can obtain a debit card for your account and check what the fees will be for these transactions.

Don’t forget to examine your tax obligations, both in Australia and abroad, when it comes to any interest you earn.

Smart use of different banking products, from everyday bank accounts to savings accounts and term deposits, may allow you to gradually increase your bank balance over time, and help you better reach your financial goals.

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