Asian Offshore Banking

A Lesson About Offshore Banking

As with most things, your knowledge about Offshore Banking is what you hear about, not what you actually learn in practice.

Most of the investors who create offshore bank accounts do so for privacy and reduced regulation and lower taxes or to protect their assets from lawsuits or from local political or financial instability in their home country.

An offshore bank is typically a bank located outside the home country of the depositor. Offshore bank accounts are usually located in a low tax jurisdiction providing privacy, legal and financial advantages to the depositor.

The simplest way for a non-Singapore resident to open an offshore bank account in Singapore is to use one of the banks in Singapore that has offices in your home country. If you are from the United States for example you might consider opening your offshore bank account through Citibank. The drawback to using any US or European based bank is the loss of the privacy that many considering offshore bank accounts are seeking.

US citizens considering opening an offshore account should be aware of and seek professional advice on the impact of the recently enacted HIRE Act. Set to become effective in 2012, the HIRE Act requires all foreign financial institutions (ffi’s) to report information about US accountholders and in many cases withhold 30% of accountholder’s US generated income including US source dividends, interest, salaries, rent, annuities or other fixed or determinable annual or periodic gains, profits, or income and 30% of the gross receipts from the sale of property that could produce US source interest or dividends, regardless of cost basis.

If privacy is not a primary concern, you can open an offshore account in Singapore through one of the US or European banks with offices in Singapore simply by contacting a local branch near you and having the local bank certify the necessary documents to the Singapore office.

The simplest way for a non-Singapore resident to open an offshore bank account in Singapore is to use one of the banks in Singapore that has offices in your home country. If you are from the United States for example you might consider opening your offshore bank account through Citibank. The drawback to using any US or European based bank is the loss of the privacy that many considering offshore bank accounts are seeking. Citibank or any other US or European bank will likely require the investor to provide a social security or other national identification number and sign a waiver of the Singapore privacy laws.

Singapore is one of the most desirable private banking jurisdictions in the world. Singapore’s stable and sophisticated business environment and the fact that business is conducted in English language makes offshore banking in Singapore easier than in many other locales.

To take advantage of Singapore’s strong privacy protections it is best to establish your offshore bank account with one of the asian or local banks. To do this you may have to visit Singapore or if your investment is significant you may be able to arrange for the bank to send staff to your home country to open your account or you may be able to create a legal representative for your account who will be able to manage an account and open on your behalf.

The biggest obstacle to opening an offshore bank account in Singapore has been the requirement that you physically be in Singapore or be a current customer of the bank to open an offshore account there. Today opening an offshore account in Singapore is becoming less complicated.

International Finance

Become familiar with the various government programs designed to help your company finance its export transactions, and give it the capital to carry out its export operations.

We recommend that you review this information and then contact your local Commercial Service Trade Specialists to discuss how these programs can help you achieve your international sales goals.

Financing

Do you need working capital loans? Does your foreign buyer need financing to buy your products? Do they prefer lease financing? Check out the U.S. Government International Financing Programs.

The U.S. Government offers four different types of financing programs:

To learn more and apply for these programs, please click on the link below each description.

The U.S. Government also provides finance related events and on-line training to further assist in exporting your products and services.

To receive counseling on how the programs listed below can help you achieve your international sales goals, please contact your local Commercial Service International Trade Specialist.

Export Development and Working Capital Financing: Enables U.S. businesses to obtain loans that facilitate the export of goods or services by providing the liquidity needed to accept new business, grow international sales and compete more effectively in the international marketplace.

  • Small Business Administration – Export Working Capital Program: Provides up to $5 million in short-term, transaction-specific working capital loans to U.S. small business exporters. Uses of this financing include: pre-export financing of labor and materials; and post-shipment financing of the accounts receivable generated from transaction-specific overseas sales. Learn more about Export Working Capital and apply…
  • Export-Import Bank – Working Capital Guarantee Program: Provides transaction-specific working capital loans to U.S. exporters, made by commercial lenders and backed by Ex-Im Bank’s guarantee. Uses of this financing include: purchasing finished products for export; paying for raw materials, equipment, supplies, labor and overhead to produce goods and/or provide services for export; covering standby letters of credit serving as bid bonds, performance bonds, or payment guarantees; and financing foreign receivables. Learn more about the Working Capital Guarantee Program and apply…
  • Small Business Administration – Export Express Program: Provides small businesses that have exporting potential, but need funds to cover the initial costs of entering an export market with up to $500,000 in export development financing to buy or produce goods or to provide services for export. The loan proceeds can be used for most business purposes, including expansion, equipment purchases, working capital, inventory or real estate acquisitions. Learn more about the Export Express Program…

Facilities Development Financing: Enables U.S. businesses to acquire, construct, renovate, modernize, improve or expand facilities and equipment to be used in the United States to produce goods or services involved in international trade.

  • Small Business Administration – International Trade Loan Program: Provides U.S. businesses that are preparing to engage in or are already engaged in international trade, or are adversely affected by competition from imports with up to $5 million in financing to upgrade equipment and facilities. Although this loan program can also be used to refinance existing indebtedness that is not structured with reasonable terms and conditions, it cannot be used as working capital. Learn more about International Trade Loans…

Financing for your International Buyers: Enables U.S. businesses to assist their international buyers in locating financing to purchase U.S. goods and services when financing is otherwise not available or there are no economically viable interest rates on terms over one-to-two years. This type of financing is generally used for financing purchases of U.S. capital equipment and services. Financing may also be available for refurbished equipment, software, certain banking and legal fees and certain local costs and expenses.

Investment Project Financing: Enables U.S. businesses to acquire financing for large-scale projects that require large amounts of capital, such as infrastructure, telecommunications, power, water, housing, airports, hotels, high-tech, financial services, and natural resource extraction industries.

Insurance

The U.S. Government offers U.S. companies Insurance and Risk Mitigation policies that cover export transactions and for overseas investments. Coverage includes losses for non-payment, currency inconvertibility, asset expropriation and political violence.

Grants

The U.S. Government provides grants to U.S. firms to conduct feasibility studies on infrastructure projects and to train the foreign business community and government officials on U.S. business practices, regulatory reform and other economic development activities.