Offshore Banking Guide: Protect Your Wealth from Government Seizure (2025)

When all your assets sit in one country, you're exposed to that government's decisions—currency devaluation, capital controls, bank freezes, or emergency taxes. A Plan B banking strategy spreads your exposure across jurisdictions, giving you financial resilience when systems fail.

What Is Sovereign Risk?

Sovereign risk means your government takes actions that harm your wealth:

• Bank freezes → Greece (2015), Cyprus (2013), Lebanon (2019-present)
• Capital controls → Argentina (2001, 2019), Venezuela (2016-present)
• Currency devaluation → Turkey (2021-2023), Egypt (2024)
• Emergency taxes → Poland (2021), Italy (2019)
• Debt defaults → Argentina, Lebanon, Sri Lanka (2020-2022)

The IMF calls this the "sovereign-bank nexus"—when government debt becomes unstable, banks (holding government bonds) become exposed. Bank weakness threatens government finances. The cycle accelerates.

Your bank deposits are tied to your government's fiscal health. If 100% of your assets exist in one jurisdiction, you don't control your wealth—your government does.

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The Three Pillars

1. Offshore Banking

An offshore account is a bank account outside your country of residence. It provides:

• Currency diversification (hold USD, EUR, CHF, SGD)
• Access to stronger banking systems
• Political insulation from home government emergencies
• Operational redundancy if your home system fails

This isn't secrecy—it's sovereignty. Modern offshore banking is fully transparent (CRS, FATCA). You report these accounts, but your funds exist outside one government's control.

2. Secondary Residency

A second residency permit or passport gives you:

• Legal right to relocate if your home country restricts exit
• Access to another banking system
• Duplicate property and civil rights
• Alternative business jurisdiction

Key programs:

• Portugal Golden Visa (€250,000+ investment)
• Paraguay Permanent Residency (~$5,000)
• UAE Remote Work Visa ($5,000-$25,000)
• Panama Friendly Nations Visa ($5,000-$8,000)
• Caribbean citizenship ($100,000-$250,000)

3. Multi-Jurisdiction Structure

Spread exposure across:

• Multiple banks in different countries
• Multiple currencies (not just accounts holding the same currency)
• Different regulatory systems
• Different asset types (cash, securities, property, metals)

One offshore account isn't diversification—it's a first step. You need redundancy.

Example structure:

• 40% home country (operations, primary residence)
• 30% strong-currency offshore (USD/EUR/CHF in Switzerland/Singapore)
• 20% emerging market with growth potential
• 10% hard assets (gold, crypto, foreign property)

When Banking Systems Fail: Recent Examples

Greece (2015): Banks closed for three weeks. ATM withdrawals limited to €60/day. Transfers abroad prohibited. Greeks with only domestic accounts couldn't access money. Those with accounts in Germany or Switzerland operated normally.

Cyprus (2013): Government seized 47.5% of deposits over €100,000 to recapitalize banks. Depositors lost half their savings overnight.

Lebanon (2019-present): Banks informally restricted withdrawals and foreign transfers. Lebanese pound lost 98% of value. Lebanese with USD accounts in Lebanon couldn't access dollars at market rates. Those with accounts in UAE or Cyprus maintained full access.

Argentina (2001, 2019): Government froze accounts and converted USD deposits to pesos at unfavorable rates. Later imposed $200/month limits on purchasing foreign currency.

These aren't hypotheticals. Geographic diversification protected people in each crisis.

Banking System Stability: Country Comparison

Source: IMF Financial Stability Reports 2024, World Bank, national central banks. Capital ratios are Tier 1 ratios.

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What the numbers mean:

• Bank Capital Ratio: Higher = banks can absorb more losses. Below 12% is concerning.
• Deposit Insurance: Maximum protected per depositor if bank fails
• Currency Stability: Change vs. USD over 10 years (+ means strengthened)
• Recent Capital Controls: Whether government has restricted money movement
• Sovereign Risk Level: Overall risk of government actions harming your wealth

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How to Build Your Plan B

Step 1: Assess Your Risk

• What % of wealth is in one country? One bank? One currency?
• Could you legally move to another country within 30 days?
• Can you open a bank account abroad?
• If your home banking system closed for two weeks, could you access funds?

Step 2: Choose Banking Jurisdictions

Tier 1 (Strongest):

• Switzerland → CHF 250,000+ minimum
• Singapore → $200,000+ minimum
• Liechtenstein → CHF 250,000+ minimum

Tier 2 (Accessible):

• UAE → $3,000-$25,000 minimum
• Hong Kong → $1,500-$15,000 minimum
• Luxembourg → €50,000+ minimum

Tier 3 (Entry-Level):

• Portugal → €1,000+ minimum
• Georgia → $100+ minimum
• Panama → $5,000-$25,000 minimum

Step 3: Secure Residency

Fast-track programs (6-12 months):

• Paraguay → $5,000 total
• Panama → $5,000-$8,000
• UAE → $5,000-$25,000
• Portugal → €250,000+ investment

Citizenship by investment (immediate):

• Dominica → $200,000
• St. Kitts & Nevis → $250,000
• Turkey → $400,000 (refundable after 3 years)

Step 4: Diversify Currencies

Hold at least three:

• USD (reserve currency)
• CHF (stable, strong economy)
• SGD (stable Asian currency)
• EUR (major trade currency, eurozone risk exists)

Step 5: Stay Compliant

U.S. citizens:

• FBAR if foreign accounts exceed $10,000 aggregate
• FATCA (Form 8938) above threshold
• Report on Schedule B

Others:

• CRS automatic reporting
• Local tax return disclosure

Work with international tax professionals. Budget $2,000-$5,000/year for compliance.

Key Banking Jurisdictions

Switzerland

• Minimum: $250,000+
• Why: 150+ years stability, strong franc, excellent deposit protection (CHF 100,000)
• Requires in-person visit
• Banks: UBS, Julius Baer, Pictet

Singapore

• Minimum: $200,000+
• Why: Top Asian banking system, stable government, strong SGD
• May allow remote opening with documentation
• Banks: DBS, OCBC, UOB

UAE (Dubai/Abu Dhabi)

• Minimum: $3,000-$25,000
• Why: No income tax, easy residency visas, USD-pegged dirham
• Requires UAE residency (easy to get)
• Banks: Emirates NBD, Mashreq, HSBC UAE

Portugal

• Minimum: €1,000+
• Why: EU access, easy residency pathways, euro currency
• Requires Portuguese residency or tax number
• Banks: Millennium BCP, Novo Banco

Panama

• Minimum: $5,000-$25,000
• Why: Uses USD, established offshore center, accessible residency
• Must visit in person
• Banks: Banco General, BAC Panamá

Common Mistakes

Confusing offshore with tax evasion → Offshore banking is legal when declared. You report accounts to tax authorities under CRS/FATCA.

Single account = diversification → One offshore account is a first step, not a strategy. You need multiple jurisdictions and currencies.

Choosing tax havens over stability → Banking system strength matters more than zero taxes. A bank failure loses 100% of money; taxes cost a percentage.

Ignoring residency requirements → Quality banks require residency or $200,000+ minimums. Get residency first.

Failing compliance → FBAR/FATCA penalties are severe (up to 50% of balances). Budget $2,000-$5,000/year for tax professionals.

Moving 100% offshore immediately → Keep 40-60% in home country for operations. Move 40-60% offshore gradually over 1-2 years.

Compliance Requirements

U.S. Citizens

FBAR (FinCEN Form 114)

• Required if foreign accounts exceed $10,000 aggregate
• Deadline: October 15
• Penalties: $10,000+ per violation

FATCA (Form 8938)

• Thresholds vary by filing status and location
• Single abroad: $200,000 year-end or $300,000 anytime
• Married abroad: $400,000 year-end or $600,000 anytime
• Penalties: $10,000+ for non-filing

Schedule B (Form 1040)

• Disclose foreign accounts and interest

Non-U.S. Citizens

CRS (Common Reporting Standard)

• Banks automatically report to your tax authority
• Must declare on home country tax returns

Costs

• Tax preparation: $2,000-$5,000/year
• Complex structures: $5,000-$15,000/year
• Account maintenance: $100-$1,000/year per account

Sovereign risk isn't theoretical—it's happened in Greece, Cyprus, Lebanon, and Argentina within the last decade. A Plan B banking strategy is financial insurance against government instability.

GlobalPassport helps you build offshore banking and residency strategies across 95+ countries.

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This guide is for informational purposes only and does not constitute financial, legal, or tax advice. Consult qualified professionals before making decisions about offshore banking or residency.

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