How to prevent offshore company bank account from being closed or frozen?
  • Posted 22 Jan ,2019


In order to prevent criminals from using offshore company bank accounts to hide overseas assets and conduct illegal activities, the tax authorities of various countries are now investigating and recovering money. As a result, it becomes harder to open an overseas bank account now, and many offshore company bank accounts are also affected.

 

Therefore, it is urgent for entrepreneurs to prevent their existing offshore company bank accounts and those about to be open from being closed or frozen.


 

There are several types of account that are easy to be closed or frozen.

 

1, Suspected Money Laundering Accounts

 

If the fund transferred to the account only stays for a while (especially when it is from a third party organization) and then it is transferred again, the account will possibly be regarded as a high risk account. In this regard, banks usually prefer to close the account and reject the transfer, rather than take the risk of being punished by related authorities one day.

 

Our suggestion: 

1, The transferred fund is recommended to be kept in the account for at least 1-2 months (the longer, the better);
2, the fund to be transferred should not be excessive, and it would be better not to transfer all the funds in one time;
3, if the company does need to allocate a large amount of money, the account can be used to subscribe for some wealth management products in advance.

 


2, Accounts with Negative Records


Before each bank account is open, a world-check will be done in order to know whether the client has any negative record or not. Once they find that there are arrears or defaults in the record or the client has been blacklisted, the application will not be approved. Moreover, when the personal account and the company account are of the same bank, if the personal account is in violation of the rules, it is not allowed to open a company account, either.

 

Our suggestion: 

Negative records should be avoided.

 


3, Accounts Used to Transfer Money between Companies and Individuals


It will be difficult for the related authorities to identify the source of funds if the transactions are always done between companies and individuals. Therefore, if a fund of a company account needs to be transferred, it would be better to transfer it to another company account. For the accounts that are always used to transfer money between companies and individuals, the bank usually investigates, freezes or even closes them to avoid risk.

 

Our suggestion: 

Unnecessary transfers between company accounts and personal accounts should be avoided. If such transfers are inevitable, explain it to the bank with proof.

 


Some business owners may think that once a bank account is open, the account is under their control, and the bank cannot intervene in its usage. However, banks are always monitoring the flow of funds and the amount of each transaction. If there is any risk, banks will immediately investigate, freeze, or even directly close the account.

 


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