Are Offshore Numbered Accounts Still Possible?
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Contents
- What Is an Offshore Numbered Account?
- Key Features of Offshore Numbered Accounts
- #1: They're more private.
- #2: Not anonymous.
- #3: They cost more.
- Benefits of Offshore Numbered Accounts
- Misconceptions About Offshore Numbered Accounts
- Steps to Open an Offshore Numbered Account
- Alternatives to Offshore Numbered Accounts
- Is an Offshore Numbered Account Right for You?
Think of offshore banking and you might think of an offshore numbered account. You know, the anonymous place to stash some cash when the bad guys are after you. Ultimate privacy and discretion.
At least, that’s how Hollywood has portrayed them. And 40 years ago, that might have been somewhat true.
Today’s numbered accounts are very different though.
In this brief, we’ll talk about what they are, how they’re used, what they can’t do, and whether it makes sense to look further if you think it can be part of your Plan B.
What Is an Offshore Numbered Account?
Quite simply, an offshore numbered account is a bank account identified by a code, number, or pseudonym instead of your name. While the bank knows who you are, it doesn’t appear on most account-related documents. This feature is ideal if you value privacy.
Though these accounts are still available in places like Switzerland and Luxembourg, they are not as common as they used to be. Some asset managers still provide numbered accounts where only the principals know the client’s name, often storing this information securely in a physical safe.
Key Features of Offshore Numbered Accounts
#1: They're more private.
Your name doesn’t appear on general account documents, which helps protect against fraud or identity theft.
Only a few bank employees know who owns the account, ensuring internal confidentiality. For clients in countries where kidnapping is common, this prevents a low-level employee from helping ne’er do wells from identifying a target.
#2: Not anonymous.
These accounts are not anonymous. Banks follow strict rules and share information with authorities when legally required.
#3: They cost more.
Expect to pay more for setup and maintenance compared to regular accounts.
Benefits of Offshore Numbered Accounts
#1: Confidentiality.
As mentioned—although numbered accounts don’t keep anything private from the tax man or other branches of a government—they can be very helpful against private or criminal threats.
#2: Safer banking systems.
The places that tend to offer numbered accounts also tend to have good reputations when it comes to their banking system.
Recommended Reading:
Misconceptions About Offshore Numbered Accounts
#1: They are illegal.
In fact, these accounts are perfectly legal if you follow tax laws and disclose them properly.
#2: They are anonymous.
There’s a difference between anonymous and numbered accounts. Anonymous accounts, which hid your identity entirely, were phased out years ago in all countries. Numbered accounts only hide your name from most documentation, not from the bank, or regulators.
#3: They are only for the wealthy.
While they’re more expensive, these accounts aren’t exclusive to the ultra-wealthy. If you meet financial and legal requirements, you can open one. In practice, though, balance minimums can be steep depending on the jurisdiction.
What's the difference between a numbered account and an anonymous bank account?
The key difference between a numbered account and an anonymous bank account in offshore banking lies in the degree of privacy and regulatory compliance, particularly concerning AML (anti-money laundering), KYC (know-your-customer), and CDD (customer due diligence) requirements. That said, truly anonymous accounts no longer exist, at least not in countries that take these rules seriously.
Definition
A numbered account uses a code or number instead of the client’s name for internal identification, offering a degree of confidentiality. A truly anonymous account involves no verifiable personal information associated with it.
Regulation
Banks still comply with Anti-Money Laundering (AML), Know Your Client (KYC), and Customer Due Diligence (CDD) rules. The client’s full identity must be verified and accessible to the bank, even if it is not linked publicly to the account.
For this reason, anonymous bank accounts—both offshore and onshore—are effectively illegal.
Steps to Open an Offshore Numbered Account
Opening a numbered account in an offshore jurisdiction is much the same as opening any other bank account. The hardest part is finding a bank that offers the service. But once you have that, you’ll need to:
Provide Documentation: Be ready to share proof of identity, where your money comes from, and tax compliance.
Meet Minimum Deposit Requirements: Many banks have high deposit thresholds for these accounts.
Follow the Rules: If you’re a US citizen, you must disclose your offshore accounts to stay within the law. That mainly means FBAR and FATCA depending on the balance. (In practice, any bank willing to offer you such account will mean having to comply with both reporting.)
Alternatives to Offshore Numbered Accounts
Many clients are interested to learn that there are private alternatives to offshore bank accounts. These include precious metals, foreign real estate, crypto, and collectibles of different sorts.
But… but… but… how private those assets are depends a lot on how you hold them. Making that fit into a US-compliant Plan B can be a challenge. But it’s possible.
Is an Offshore Numbered Account Right for You?
If you value financial privacy and asset protection, an offshore numbered account might be a good fit. Frankly, however, if privacy is your #1 concern, there are better options available.
Privacy centered planning is a core part of what we do. To see if our services would be right for you, please feel free to request a free, no-obligation consultation with a Nestmann Associate to discuss further.
About The Author
Need Help?
We have 40+ years experience helping Americans move, live and invest internationally…
Need Help?
We have 40+ years experience helping Americans move, live and invest internationally…
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