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Banking with HSBC Premier offshore

I’ve recommended HSBC for some people in the past, but it’s getting harder to recommend opening an offshore bank account with HSBC

Dateline: Barcelona, Spain

Admittedly I’m not a “movie guy”, but one of my favorite movies of all time is James Bond flick The World is Not Enough. In the first scene of the movie, Pierce Brosnan is in Bilbao, Spain haggling with Swiss bankers who helped move the money for a kidnapping before he jumps out of the bankers’ office during a fire fight.

It’s scenes like that that reinforce the image of “offshore banks” as mysterious and just plain cool. As much as a few of the HSBC bank branches here in Spain remind me of that scene in the movie, banking with HSBC is not particularly mysterious or cool.

And while I have hesitantly recommended HSBC as an offshore bank in some scenarios, it is really hard for me to continue to do so.

Allow me to explain why…

Most importantly, offshore banking is about one thing: risk reduction through international diversification. Some people mistakenly believe that to protect themselves from their country going down the tubes, they ought to move ALL of their money to ONE other country.

That’s not how it works. No country is totally resistant to all shocks or the potential shocks of a government that decides to go rogue. Not even Singapore, not even Germany, not even… well, anywhere.

Having said that, it makes sense that to obtain diversification you have to escape the system you’re in back home. With HSBC, it’s hard to do that.

A tax attorney friend of mine suggests that perfect internationalization includes banks that have no connections in the country you live in or hold citizenship in. That rules out pretty much any multinational bank such as HSBC, Citi, Standard Chartered, or JP Morgan.

The reason is that these banks are just as closely tied to your home country as they are the more tax-friendly locations in, say, Hong Kong.

Even though HSBC USA is a totally different bank from HSBC Hong Kong, and their local registrations do put up some barriers, more of those barriers work against you than for you.

For example, I can’t deposit a paper check for a Hong Kong company at HSBC in Malaysia. They’re two separate banks.

Likewise, when an account I opened at a Czech Republic bank was quickly opened and then closed with me never getting the account number, I couldn’t walk into that bank’s branch in Slovenia to get the number. I had to go to the Czech Republic.

On the other hand, there is increasing evidence that your government could call up HSBC in another country and say “hey, this guy owes us taxes; please freeze his account”.

Domestic bank accounts you own are an easy target for your government. I’ve told the story of waking up one morning to find that a bank account for a non-California LLC had been levied by California… for taxes I already paid.

All it took was some empowered bureaucrat in Sacramento to push a few buttons.

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Sadly, banking with multinational banks can subject you to the same provisions. I’m not saying you should dodge the tax man or skirt the law knowing that some local bank in Andorra will protect you. I’m not suggesting you do anything illegal or even immoral.

What I am suggesting is that multinational banks like HSBC will throw you under the bus in two seconds if someone with a shiny badge comes and knocks on their door asking for money.

It’s similar to how the flight attendant on my flight to Barcelona gushed when one of the airline’s captains asked to sit in the emergency exit row for his commute to work, but I was told I’d have to pay extra and that was that.

The flight attendant knows and is perhaps even beholden to her co-workers, whereas I am an expendable passenger. A low-level employee doesn’t care too much about my business, and I know well enough that saying “I’m going to fly another airline” won’t get my far.

Bank employees feel the same way. Do you think HSBC is going to risk its good standing in the United States to keep you and your $100,000 happy? Of course not. Especially not after a money laundering dispute that cost the bank a ton of money to settle.

HSBC Premier accounts are worthwhile for expats and perpetual travelers who want access to their bank in multiple countries. Many travelers experience ATM and foreign transaction fees when traveling with their home bank debit and credit cards, and having an HSBC account can prevent that in some cases.

In addition, HSBC Premier does have several airport lounges for bank customers, and I am told they are building more as the high-end banking space becomes more competitive.

However, if you are planning to move money from a high-yield online savings account to HSBC, be advised that you’ll earn essentially zero interest. In Hong Kong, a current account is paying 0.01% – if that – these days.

While I frequently complain about the fact that 0.75% returns in the US are considered “high yield”, that’s still 75 times what you’d get to park your money in a “Premier” account with HSBC.

While HSBC does offer cheaper accounts, Premier accounts are the easiest for frequent travelers or those banking from home, and requires at least US$100,000 be tied up at zero interest.

On top of that, there is little “premier” about HSBC Premier service. I’ve gotten better customer service from a Chase branch… and I hate Chase.

My experience with HSBC Premier branches in several countries has been that you can’t even get a fresh cup of coffee while you wait for your banker. Then there’s the fact that you have to wait for your banker.

Ask anyone at the branch what the benefits of being Premier are and they’ll hem and haw and give you no real answers. Any therapist would say their answers show a lack of “presence”.

My experience with the one-on-one relationship managers in the US, UK, and Hong Kong has also been rather poor.

As an entrepreneur, I know the value of slick marketing and used to joke with employees in past businesses that we’d make them a “Vice-President” if they’d take less money. That’s based what HSBC does… hires a bunch of grunts in monkey suits and calls them “private bankers”.

If you have $5 million to deposit, HSBC Private Bank in the Cook Islands may be worth a shot, although there are far better private banks in Switzerland, Singapore, and elsewhere with much lower minimums.

Heck, several of our private Members tell me they’re thrilled with Premier accounts at other banks in Asia, some which require similar deposits to HSBC.

There are certain countries you should avoid banking in if you’re a US citizen, and there are certain banks worth avoiding pretty much no matter where you’re from.

If you want one bank that you can use without the need for privacy or diversification, but rather for simplicity, HSBC can work for some people. I don’t hate HSBC, but I am a stickler for service and there are better options if you have a six-figure sum to deposit.

Ditto if you are looking to protect your cash from sticky fingers.

If you need help finding the right offshore bank for you, apply for a Strategy Call so we can determine your best options as part of a personalized and completely legal offshore plan.

We made finding the best offshore banks easy

Would you like to open an offshore bank account? Get our free Offshore Banking guide and diversify your money internationally.

Download Now!

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Andrew Henderson

Andrew Henderson

Andrew has been internationalizing since 2008, and has learned what works and what doesn't work when it comes to reducing taxes, increasing personal freedom, and creating wealth. Click here to work with him personally.
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