While there is no perfect place, the better countries are easy to choose: they must have bank secrecy, no withholding taxes for foreigners, or if there is a withholding tax, it must be easily avoided as it is in Austria or Switzerland by means of a “fiduciary account.” A fiduciary account is simply an account established for you at another bank by your own bank, and kept in the bank’s name. Also important is political stability, an unblemished history of honest dealings with foreign investors, and a long tradition of no government confiscation of private assets. There must be no information exchange treaties or other arrangements with your home country and none on the horizon. Obviously the bankers of your banking country should be fluent in your language. Fortunately, English is the universal language of international banking, business and the airways as well. So unless you bank strictly locally, any major international or offshore bank will have officers that you can communicate with in English.
Outside of Europe, it is probably best to deal only with a branch of a major bank whose home base is not your home country. Your offshore bank preferably has no branches in your home country that could be pressured to force them to reveal your account details or worse yet, freeze your account. Thus if an Englishman was going to have an account in the Caribbean, first choice might well be a Swiss, Danish or Dutch bank – never a British nor (for safety’s sake) a one-horse local outfit. The account for a Brit for instance should be in the Antilles (Dutch) not Cayman (British). If I were an American I’d stay far away from any de facto American colony like Puerto Rico or Canada. Or from any American bank like Citibank, Bank of America, etc. Come to think of it, even if I were not an American, I’d stay far away from American banks no matter where located. They are all quite shaky. The Federal Deposit Insurance Corporation is insolvent and American banks (and stockbrokers) are generally subject to the whims of the current political administration back home. The largest banks in the country, Continental Illinois and Bank of America, went through the equivalent of insolvency in recent years. The same instability would be true of all but the biggest Japanese banks.
Never deposit two cents in a third world bank like Banamex (Mexico) or BCCI (Pakistan) nor any Arab bank. The Muslim idea of banking is so foreign to the English speaker that there is no common ground. Receiving interest from a bank (or paying interest under some interpretations of Islamic Law) is an offense that gets your hands amputated or in some к countries you might be shot. I am not joking. This is the law in Iran! I would not deposit my money in any offshore branch of a bank with such rules in the home country! As to general morality and honesty, some Mexican bankers I have known make Jesse James and John Dillinger look like honest men (in comparison to them). And while I’m throwing stones, the Mexican Government has a long tradition of luring in foreign investment and then confiscating it. That leaves the major European banks as just about the only serious choices for stashing serious money.
The best countries are the UK’s offshore islands, plus Luxembourg, Switzerland, and Austria. Ring them for current price details. While I was writing they were offering a damn good deal. Anyone can make deposits to your Austrian bearer account (if they know the number) by wire transfer, cash deposit in person, mailed in checks, or any other normal way. But the passbook must be presented to make withdrawals.
There are ways to get a duplicate passbook if you have a photocopy of the lost or destroyed one, but it will be a long and frustrating process. This type of account may be useful where you want a potential enemy or adversary to deposit funds for you, but you want to be sure that even with a lawsuit, it would be impossible for him to get any useful information about the account activities. The way to use the account is to have the deposit made there, and then have a hired hand personally withdraw the funds in cash. You wait outside the bank, take the money and deposit the cash somewhere else. Your bank will not be able to identify who got the money or where it went. A neat way to break the paper trail!
Hanks of ex-communist countries are now courting this offshore private investor business, and there are plenty of banks pumping for “High Net Worth Private Clients’’ in places like Hong Kong, Panama, Cost Rica, Malta, Uruguay and Gibraltar. My thought is, the vast majority of people and politicians in these places are socialist oriented. They are Leftists (as they are in Mexico and most of South America). When times get tough, the local politicians think first of defaulting on their international obligations and second, of confiscating the local assets of foreign depositors and investors. For them, foreign investors are a golden goose to be roasted at the first sign of tough going. Never mind losing the golden eggs! Politicians don’t think of long term effects. In most countries, confiscation of private property is considered by the leftist majority a moral and proper thing to do. I would give all such thieves a pass! Exception? Major international banks’ branches in Gibraltar and Panama are probably OK for short term (up to a year) funds – just keep an eye out for any handwriting on the wall or bad odors emanating from politicians before an election. Move your money at the first whiff of trouble. Stay on top of things by subscribing to one or more newsletters which keep a sharp eye on such matters.