Global de-offshore (Part 1). Offshore company and an account with a Latvian bank in 2016

In continuation of a series of posts in the blog of LAWBOOT Lawyers & Consultants about registering companies and opening bank accounts for the IT business, we will tell about significant changes in the world of classical offshore companies and Latvian banks.

In the current year, many scandalous events occurred in the financial sector of Latvia:

1) The dismissal of the head of the Latvian financial regulator,
2) Criminal prosecution PrivatBank Latvia,
3) Visit of American auditors
4) Statements by the OECD regarding Latvia’s failure to exercise due financial control over the banking sector and corruption charges.
')
The mass of news resources asserts that correspondent banks servicing dollar transactions for Latvian banks may deprive the latter of the ability to conduct dollar transactions.

Such events had a negative impact on business, including in the field of IT. For example:

1) Latvian top banks stopped opening accounts for classic offshore companies (Belize, BVI, Marshall Islands ...),
2) Increased commissions for dollar transfers to a number of countries
3) The control over payment orders, contracts and invoices has increased,
4) When opening a corporate or personal account, Latvian banks began to request the beneficiary’s tax number on the account,
5) Some Latvian banks have increased the cost of opening an account.

It is not a secret to anyone that Latvian banks were the most popular solution for entrepreneurs from the CIS.



What are the ways out of the situation we offer our clients:

1) Open a tax-free company in Hong Kong, for this I recommend reading the articles of LAWBOOT Lawyers & Consultants :

Company Registration in Hong Kong for IT business (Part 3). Let's talk about working with contractors (customers) from the USA
Company Registration in Hong Kong for IT business (Part 2). Let's talk about the director
Company Registration in Hong Kong for IT business

Hong Kong is not a classic offshore, and Latvian banks even recommend replacing the client’s offshore company with a company from Hong Kong.

The Scottish partnership is also suitable (but there are certain problems with the introduction of a public register of beneficiaries of such partnerships)

2) To open a company in low tax jurisdiction, for example, Cyprus, Malta, Ireland. Write to us to find out the cost and procedure for registering such a company.

3) Open a bank account for an offshore Cyprus company. Fortunately, for now there are large Cypriot banks that are ready to accept classic offshore into their clients. At least today (April 5, 2016), one of the banks agreed to open an account for a company registered in Belize.

4) Open a bank account in an offshore bank. This option is not suitable for every type of business, and confidence in such banks is dubious.



We see that despite the global deoffshorization, and major changes, there are always ways and solutions for corporate and administrative business problems. The main thing is to know in advance about the occurrence of changes and have a ready action plan.

We offer at least a subscription to our blog, or even better, contact our experts and discuss forms of cooperation.