Bank Deposit Protection for Offshore Companies

Legal persons trade or engage in other activities. Compensation for their work is paid into a bank account. Payments must be made to the company’s bank account in order to utilize the legal and economic benefits of the jurisdiction of incorporation. Companies that are inactive and not in good standing cannot trade. Furthermore, holding assets with an inactive bank that is closed by the authorities also complicates the situation.

When banks fail, deposit insurance via local deposit guarantee schemes (DGS) provides a safety net for account holders. Bank deposit protection for offshore companies applies by default to the eligible account holder. Inactive companies can request a DGS payment to the personal bank account of a beneficial owner known in the records of the bank and confirmed by the most recent company documents but the chance that the claim gets rejected is realistic.

Most of our clients with foreign and offshore companies hold bank accounts with approved and safe financial institutions. Sometimes they still have historical ties to privately owned financial institutions. This is mostly hassle free but every now and then these credit institutions fail and are shot down by the authorities. Our service deposit guarantee claim then allows our customers to ensure maximum repayment. This service is for most of our customers the first step that leads to a lengthy business relationship. The objective of this mutually beneficial relationship is to unburden business professionals and let them focus on building a profitable company without all too much peripheral administrative matters. 

Companies incorporated in offshore financial centers often open their bank account in locations outside their home country and in jurisdictions that are friendly towards these type of legal persons. When customers seek a new banking relationship they should pay attention to the safety of the bank. This is not limited to its capitalization but should also consider conduct risk and potential regulatory intervention. A safeguard to their financial holdings is the bank deposit protection for offshore companies. This is something that must be scrutinized to ensure that the bank account is subject to insurance and eligible for repayment.

Prevention is always better than cure. Therefore, we leave no stone untouched to ensure that our customers open their international business bank account with safe and sound financial institutions, with proper safety nets in case of unexpected failure. We also seek to diversify the options for our clients and mitigate risk so that they can always continue their operations.