Personal bank accounts vs corporate accounts: which is the best option?

Personal bank accounts vs corporate accounts: which is the best option?

For a long time, corporate bank accounts were considered the most ideal solution for protecting financial resources; however, these days this view has changed. In an environment of harassment about everything related to the offshore world, personal bank accounts can work better for carrying out financial activities.

The various advantages offered by corporate bank accounts make them an attractive option. For example, funds kept in the bank account of an offshore company are legally separated from those of this company’s owner, so that the account acts as a protective layer for his assets.

Furthermore, all transactions done with the corporate bank account are under the name of the offshore company and not that of the account’s ultimate beneficiary. This is a very useful fiscal and protective strategy for its goods. Faced with the Information Exchange treaties, the tax officials of the ultimate beneficiary’s country of residence wouldn’t have control over the movements of this person’s capital. Today, it’s no longer like this and that’s why it’s necessary that not only the company reside in a tax shelter, but also the account’s ultimate beneficiary.

Many myths were also created about corporate bank accounts during the times when offshore banks offered “secret or numbered accounts”. Actually, these accounts, as well as bearer savings books, disappeared two generations ago and the offshore banks, like any bank, have the responsibility of proving the ultimate beneficiary’s data and the place of his residence.

Why has all this changed? The pressure from high tax burden countries has made almost all jurisdictions yield when faced by the threats of being placed on the gray- and blacklists. So, they signed financial information exchange agreements. Putting your savings in those few countries that didn’t yield is very dangerous.

Meanwhile, the banks, afraid of receiving heavy financial sanctions, have accepted the new rules. The banks are now required to follow the know-your-client (KYC) and Anti Money-Laundering (AML) procedures much more extensively and costly; this is why they have reverted the high cost of keeping a corporate bank account open, to their clients. To this is added the fact that these banks periodically request additional information from the ultimate beneficiary of the corporate account and the company. The cost of these documents can vary from 500 to 2,000 American dollars every year, depending on what each  bank requests and which jurisdiction issues the documentation.

The difficulties of operating an offshore bank , the pressure on the low tax burden jurisdictions, and the continuous persecution against offshore companies have caused more than just a few to decide to turn to personal bank accounts for operating their companies. It’s true that they have less anonymity; however, in these times, they work better in the world’s present complex banking system.

So then, how can the information exchange problem be resolved? Easy, keeping personal bank accounts in countries that don’t automatically exchange information, like the United States, Puerto Rico, Russia, etc. or even more easily, by obtaining residence in a tax haven like Panama.


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