Last updated November 24, 2017
Dateline: Bogota, Colombia
If you’re new to the world of offshore banking, you may be concerned about bank safety. After all, some may still believe that their money will simply vanish if they move it overseas.
You may not know that almost every developed country has some form of deposit insurance for banking clients Or, you may be surprised to learn that the United States was ranked as only the fortieth most stable banking system at the peak of the financial crisis.
While we do talk about emerging offshore banking jurisdictions that offer higher interest rates and will play a larger role in the future, those seeking conservative banking options will appreciate knowing the safest offshore banking countries.
Each year, Global Finance Magazine publishes a report called the “50 Safest Banks”. We’ve analyzed the report and listed countries with the greatest number of the world’s safest banks. Other countries, like Norway, offer very safe banking, but don’t have as many banks topping the global list.
Of course, you should always do your own due diligence before opening an offshore bank account, but these countries have continually scored high in global financial rankings. Here is our list of the most secure, stable banks for protecting your assets abroad.
10 safest countries for offshore banking
Some have gone so far as to call Australia the “Switzerland of the South Pacific”. I’m not sure I’d go that far, but I will say that many Asians — especially wealthy Chinese — are moving their money to Australia, as well as Singapore. The fact that some of that money is “hot” is a potential concern, but Australia’s banks do stack up well when it comes to offshore bank safety.
In fact, Australia controls four positions in a row on the “50 Safest Banks” survey, including ANZ (#25), Commonwealth Bank of Australia (#26), Westpac (#28), and National Australia Bank (#29). ANZ has made an aggressive push into many Asian countries, opening branches everywhere from Vietnam to Cambodia and beyond. Opening a bank account in Australia is possible, but banks there do think a bit like US banks, in many cases assuming only a resident would open an account there. If you call one of them, don’t be surprised if they ask when you’re moving to Australia.
For Americans, Canada might not be the first thing that comes to mind when thinking of “offshore banking”—nevertheless, it has some of the world’s safest banks. Unfortunately, those banks are often off-limits to Americans, especially the ones that pay more aggressive interest rates. While banks like TD Bank have made strong pushes into the US market and have been forced to spend an estimated $100 million to comply with FATCA, smaller Canadian banks have shut their doors to toxic American clients.
It’s a shame because — as sure as I am that Canada would roll over for the US government on a whim — they do have some of the safest banks, including aforementioned TD Bank (#19). Other contenders include Royal Bank of Canada, or RBC (#23). Other reputable banks include Bank of Nova Scotia, Bank of Montreal, CIBC, and others.
8. South Korea
South Korea is a country largely still unexplored by most Westerners and not usually at the forefront of discussions for nomads and offshore experts. However, this highly-developed Asian nation tops many of our lists including the safest country in the world and appeared in our discussion on safe-haven currencies. We also wrote recently about South Korean residency and citizenship in this guide, for those interested in this “first world” Asian passport that also offers visa-free access to the United States.
South Korea comes in frequently on the top 25 list—with Korea Development Bank (#15), Export-Import Bank of Korea (#16), and Industrial Bank of Korea (#20). Entrepreneurs and investors interested in banking in Asia in a culture that respects business and finance and offers the banking infrastructure needed to support that might want to look no further than these bank options.
Sweden is known by many as a bastion of security, safety, and order both in Europe and the world around. The Swedish passport is still rated #1 of all on our Nomad Passport Index and in terms of banking the country comes in at #12 with Svenska Handelsbanken and others on the list including Nordea, Swedbank, and SEB, some of which may be recognizable for those who have traveled in Scandinavia.
Sweden is a remarkable economic and social success but with that comes certain drawbacks: it is the nation with the highest tax rate in the world, something which is a concern for those based there but which can be avoided through living elsewhere. In terms of banking, Sweden may offer you the stability you are looking for in Northern Europe and with high English competency at every level of the process.
Undeniably our favorite place to bank here at Nomad Capitalist, Singapore is home to some of the world’s best offshore banks. According to Global Finance, the tiny Asian financial center is home to three of the world’s safest banks: DBS (#12), OCBC (#13), and UOB (#14). By a separate account, OCBC is the “world’s strongest bank”. Singapore has built the best offshore banking center in the world by acknowledging one simple truth: capital goes where it’s treated best.
The fact that Singapore is the richest country in the world by virtue of this understanding is what makes it, in our opinion, a great place to bank. It is getting harder to open an offshore account in Singapore, but it’s still possible. The fact that so many wealthy Asians are ignoring Switzerland in favor of Singapore is an excellent sign that it’s the place to bank.
France is not a country we talk about often at Nomad Capitalist due to its lack of desirability from a tax-planning standpoint and generally bureaucratic, socialist-leaning ways.
One of the highest countries in the world for capital gains tax and income tax once crawling into 75%, the European Union founding power center still does come in at #9 and #21 on our list, with Caisse des Dépôts et Consignations hitting that top-10 spot. You can also learn more about France’s potential want for the end of the US dollar here.
Luxembourg, the small nation of half a million listed as one of the top 5 richest countries in the world, unsurprisingly holds a great reputation in banking security. Unfortunately, for US citizens, Luxembourg may not be an option, as few Luxembourg banks accept US persons as clients.
Most firms do not do business with Americans. Luxembourg, however, tops our list of top 5 most valuable passports for visa-free travel. The nation is generally associated with stability and financial expertise and thus is in good context here on this list.
The good news for the Netherlands is that it is one of the safest countries in which to bank. For us, its membership in the European Union is a bit troubling, particularly after what happened to Cyprus. However, on paper, bank accounts in the Netherlands are protected by bank deposit insurance for up to 100,000 euros, the EU minimum. The country is home to three of the top offshore banks, including second-ranked Bank Nederlandse Gemeenten, sixth-ranked Nederlandse Waterschapsbank, and tenth ranked Rabobank.
Switzerland and banking are synonymous for almost anyone around the world.
This highly-developed multilingual European nation has become the global standard for “stability” in money for generations and Zürcher Kantonalbank comes in at #2 for safest banks. Many have dreamed of having a “Swiss bank account” or taking advantage of the many financial benefits this non-EU nation and its currency the Swiss franc, despite it being pegged to the Euro. However, while Switzerland was once the only tax haven, it is now increasingly inaccessible for offshore purposes.
As we have discussed, Switzerland is no longer the universal answer for bank secrecy. Islands like Seychelles and Mauritius continue to give classic tax havens a run for their money. Interestingly enough, however, Switzerland has no restrictions on the amount of cash carried into or out of the country. It is also an ‘old school’ choice for offshore gold storage. It remains one of the least corrupt countries in the world.
Germany is home to KfW, the number one safest bank in the world according to Global Finance. In all, Germany is home to six of the world’s fifty safest banks, including Landwirtschaftliche Rentenbank (#4), L-Bank (#5), NRW Bank (#8), and more. As one of Europe’s stronger economies, Germans take their banking system seriously. And while bank secrecy in Germany isn’t what it is in other German-speaking countries like Austria, or even Switzerland, Germans are concerned about things like capital controls.
It was the Germans that convinced the European Union to issue a high-value 500 euro banknote so they could more easily keep hard currency at home. Now that much of Europe is bankrupt, it seems German banks are more attractive. A few German banks accept foreigners, including Americans, but the accounts offered are typically general retail accounts with low interest rates and little option for currency diversification.
Thoughts for US citizens
Amazingly, US banks showed an improvement in the most recent “Best Banks” survey, with two retail banks making the list at #33, #40, and #43. That’s up from previous surveys where not a single US retail bank made the list. Don’t get too excited, though; the two Chinese banks that made the list both beat out all US contenders.
With laws like FATCA ready to be fully implemented, Americans in particular, should take caution to move some of their assets into safe offshore banks before it’s too late. If you’d like to see my list of 56 banks in 18 countries that are not only safe banks, but easy to open a bank account with, then you’ll want to check out our article on the world’s best offshore banks.
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