Can I open a bank account in the Cayman Islands as a non-resident?
Yes it is possible to open an account as a non-resident but it is likely that it will be required that you provide income statements, tax returns and a few other documents, not to mention you will be restricted on how your accounts are used and funds going in may be limited as well. It is best to contact the individual bank to find out details either via email or starting a conversation via phone with one of their relationship managers.
Is it illegal to have a bank account in the Cayman Islands?
Having an offshore bank account in the Cayman Islands is not illegal, but if your intent is to hide money there, that’s another story.
When we talk about the Cayman Islands, two things usually come to mind: a tropical vacation paradise and a premier haven for investments and private and offshore banking. When it comes to banking secrecy, the Caymans have earned the reputation for having the most stringent in the world. Owing to their highly sophisticated trust laws, they provide a high level of privacy, protection, and flexibility to their clients. It is considered to be “one of the most transparent and professional of the tax neutral jurisdictions.
Setting an offshore account in the Cayman Islands (or in any other foreign country for that matter) is legal unless you are planning tax evasion. Note that offshore banking is also not tax exempt. Make sure you understand the regulations as there's only a slight difference between tax avoidance and tax evasion.
In compliance with the requirements of the Foreign Account Tax Compliance Act or FATCA, banks around the globe are to report balances and all the transactions of American citizens to the IRS for accounts with more than $50,000 USD in assets. Failure to do so can lead to penalty. The FATCA is a law of the United States of America that went into effect in 2010.
What is the difference between an offshore account and an investment account?
Offshore transactional accounts are bank accounts opened in a country where the account holder is not a resident of. A transactional account is a small simple offshore account designed for easier access to funds for regular transactions. If you are just looking to initiate offshore banking, or looking to have an offshore account you can use for your international business transactions, then this may be the account for you.
In comparison, an offshore investment account is an international investment or brokerage account which is often used as a personal private offshore account that allows an investor to hold, invest and trade securities, bonds, stocks and other asset classes. It has a more complex structure requiring a larger initial deposit with a minimum amount of $500,000.
Account holders open this type of offshore account to gain access to an extensive array of trading and investment options. However, transactions could be limited and going beyond the limit could mean additional fees and penalties. This makes it less liquid and not ideal for business transactions. If you don’t plan on having many transactions with your account and want to maximize returns and protection for your money, then an investment account may be for you. High-value investors are often drawn to this account type.
To use the offshore account, investors often set up an offshore corporation, financial entity, trust or LLC to stay separate from it as individual persons. For additional levels of protection and security, the transactions, gains and revenues from an offshore investment are accounted for under the offshore entity instead of the individual.
FAQs
1 - Can anyone open a bank account in the Cayman Islands?
Non-residents can open a bank account in the Cayman Islands. Some banks even allow you to do so without visiting the Caymans. However, you need to submit several certified documents as proof of your identity, your current overseas address, bank references and the source of your funds. Cayman Island banks will do thorough background checks before allowing you to open an account in compliance with the mandatory due diligence requirements to make sure you are completely legally qualified to prevent money laundering. Overseas residents will have to provide local banks in the Cayman Islands a legitimate reason for setting up an account.
2 - How much money do you need to open a bank account in the Cayman Islands?
As mentioned earlier, if you’re opening an offshore investment account, the minimum initial deposit is $500,000. But if you’re opening an offshore savings account or personal account, the minimum initial deposit is typically $1,000 for non-residents, and $,5,000 for CD’s. Your funds can be in US$, CA$, CI$ and other leading currencies, although bank may require higher minimum account balances for some currencies.
You also have to factor in setup fees and other costs. If you hire someone to open an offshore bank account for you, the setup fee ranges between $550 to $1,250. This fee will vary depending on the jurisdiction and the bank. To set up an offshore company to hold your account, the cost ranges from $1,700 to $2,500.
