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The bank account of an offshore company and the management of the account.

A considerable part of the financial transactions of offshore companies is effected through bank accounts. Free access to the financial assets of the company, whether to transfer or withdraw cash, is essential for the everyday running of the company. In order to achieve this in the most simple and efficient way possible, it is worth taking into consideration the following considerations, which we have identified on the basis of several years' practical experience:

  • Perhaps the most important consideration is that the financial institution chosen should be a long-standing bank which enjoys a generally good reputation and is also considered reliable within the world of finance. It is not advisable to open a bank account in an unknown little bank in an unknown small country. It may happen, for instance, that the letter of credit you open with a bank like this is not accepted by the partner's bank. Everybody is aware of the cases of banks going bankrupt recently, which never happens in the case of prestigious banks which have been in the business for a long time.

  • The chosen bank should be in an economically and politically stable country, where the state guarantees the investments of foreigners by law. It is, however, highly important that these laws should exist not only on paper but also should be enforced in practice. It is not advisable to open a bank account in a country where sudden, drastic political changes are frequent. It is also a warning sign if in the given country there has already been a precedent for the freezing or confiscation by the state of the amounts deposited in the accounts.

  • The bank should be located in a country where bank secrecy is strictly enforced, in practice, as well as in principle. There is no need to spend too much time explaining the importance of this factor.

  • The country in which the bank is located should have a liberal foreign exchange management policy. It is desirable that there should be no restrictions of any kind on the conversion and exportation of currency, the deposit and withdrawal of cash etc.

  • At the same time, it can be reassuring if the chosen bank is not in the country where the owners or directors of the company qualify as taxpayers.

  • It may not be advisable to open the company's bank account in a country too far away. This is important in cases where the withdrawal of cash from, or payment of cash into the account is indispensable in the interest of the operation of the company.

  • Management of the bank account should be simple and convenient. You should find a solution whereby the bank account can be managed not only in person but also via facsimile or telephone, or perhaps directly via computer (modem).

The banks in which LAVECO LTD. offers to open corporate and personal accounts can be divided into several groups: Hungarian banks, Western European banks, Baltic banks and US banks. The procedure for opening accounts, the principles of working with banks and the requirements for account holders differ greatly in the different regions. As the majority of the banks in which LAVECO Ltd. helps open accounts are situated in Hungary and Western Europe, we have decided to give more detailed information on the opening of accounts in banks in these areas.

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