Everyone has repeatedly heard that opening a company account in a foreign bank is becoming increasingly difficult. Banks are forced to comply with regulatory requirements, carefully checking new customers. Against this background, even firms from “white” jurisdictions experience difficulties, not to mention classic offshore companies. So what about a company which needs a bank account, and is registered, say, in the BVI or in the Seychelles?
There may be three options:
1. You can liquidate a company in an offshore zone and open a new one, for example, a British company or partnership. In terms of taxes and reporting, it will, kind of, be the same offshore, but in a “white” jurisdiction. The downside of this decision is that the original company ceases to exist.
2. If you need to keep the offshore company in its original form, then you should try to open an account in one of the banks of the CIS countries or work with payment systems. This is a working option, but must remember that the number of banks working with companies from classical offshore companies decreases every year. Therefore, there is a chance that after opening an account on an offshore, say, in a Belarussian bank, after some time, you might be denied service.
3. There is an opportunity to change the jurisdiction of an offshore company without liquidating it, and only then open an account with a bank. Here’s more about this procedure, also known as redomiciliation.
What is redomiciliation?
The domicile of a company is its jurisdiction, the place where it is registered. Accordingly, redomiciliation represents a change in the country of registration. Not all states allow this procedure, but most classical offshore companies do.
It is worth noting that redomiciliation is not the closure of one company and the opening of another, with the same name. The company does not stop working and maintains its legal status and corporate structure. Also, note that redomiciliation is only possible for existing companies with paid taxes and fees. The company should not be in the process of liquidation or undergo bankruptcy proceedings.
The whole procedure takes about a month (two weeks - redomiciliation, two weeks - opening an account) and is divided into several stages.
Stage 1: - verification of the company name and type of activity - verification of documents for the offshore and top officials (shareholders, directors, company secretaries) - payment for services.
Stage 2: - preparation of documents for the company (letter of consent of the director and secretary, resolution of the director or shareholders/directors solvency statement) - translation of documents (if necessary).
Stage 3: - signing and sending scanned copies of signed documents - obtaining preliminary approval from the registrar of the International Corporate Center. It usually takes 2-3 business days.
Stage 4: - sending the original documents and submitting them for registration (3-4 business days).
Stage 5: - obtaining corporate documents of the company - making a seal (if necessary). After that, a package of documents is formed for opening an account with the bank. Please note that signing a service contract usually requires a personal visit to the office.
In total, the redomiciliation procedure takes about a month.
