Three Reasons to Bank Abroad

Putting some of your money into a foreign bank is a smart move. But that’s not because it’ll be hidden from anyone. 

As regular readers are probably aware, one of my missions is to debunk myths about banking and acquiring assets outside the United States. Frustratingly, many people out there will tell you that you can somehow “hide” money abroad. 

It’s true that you can keep money overseas without telling Uncle Sam about it… if it doesn’t amount to more than $10,000. Once you hit that threshold, you must report it to the Treasury Department or face draconian penalties. 

Even if you have less than that in a foreign bank, that bank is almost certainly going to report the existence of your account to the U.S. government to stay in its good books. 

So, if keeping money hidden from the government isn’t the main reason to bank or invest in assets abroad, why should you? Here are three reasons: 

1. 1. Even though your offshore financial holdings must be reported to the government, that doesn’t mean that individuals or companies will know about it. There are strict rules prohibiting the IRS or the Treasury Department from revealing any information about individual U.S. taxpayers. So, if you have a legitimate reason from wanting to keep your money from prying “private” eyes, banking and investing offshore is a strong solution. That’s especially true if you choose to open an Asset Protection Trust in a secure jurisdiction, like the Cook Islands. 
2. 2. Even if the existence of your foreign financial or other assets is known, they are far harder to attack than if they were in the U.S. itself. It’s not like someone can simply waltz up to a judge in a foreign country and demand that they order you to hand over your property to them. Whether it’s the IRS, a disgruntled business partner, or an ex-spouse, they must go through a legal process in the foreign jurisdiction itself. If you choose the right one, that can be so complex and expensive that most people (or their attorneys) don’t even try. 
3. 3. Foreign banks are almost always safer than U.S. banks. That’s not universally true, of course; Chinese banks, for example, are hardly a bastion of stability. But in the U.S. financial system, banks make money by trading on their own behalf and by arbitraging interest rates. As we saw in 2023, this is massively risky and can easily lead to a bank collapse. Almost everywhere else in the world, however, banks are more tightly regulated, and commonly make most of their profits from fees. As irritating as that might seem at first, it’s a small price to pay for the safety you get in return. 

Now, I’m aware that there are plenty of people out there who will tell you that it’s almost impossible for Americans to get foreign banking services because of FATCA and other U.S. government reporting requirements. But while some U.S. expats do struggle at certain foreign banks, the problem is eminently solvable if you know how to go about it. 

In fact, I’ve recently done some research that helped me to identify eight countries where Americans can easily open a foreign bank account, sometimes even remotely. This most often involves approaching a foreign bank via a local intermediary who will vet you on the banks’ behalf and make an introduction. It might cost you a couple of thousand dollars at first, but when the bank account is open, you’re golden. 

If moving some of your money outside the U.S.—something I’m advising everyone to do urgently this year—my Global Citizen service should be on your radar. Through my monthly reports, my regular information sharing, my video interviews—and now through exclusive individual consultations—I can help you achieve the safety that offshore banking and investing can provide.