CIBC FirstCaribbean International Bank – Client Questionnaire

[Damon Nomad]

I’m opening an account with CIBC FCIB by myself, and they’ve sent me a client questionnaire to fill out (attached). Besides standard company information, there are 3 questions, the answers to which could potentially bar companies from opening accounts:

• Kindly confirm the reason(s) / rationale for choosing to establish a banking relationship in the British Virgin Islands.
• Please provide a full description of the main activities of the company, including for example, goods traded or goods provided.
• Please list all the countries in which your business activity takes place.

What would be red flags in the answers to these questions? Would (a more euphemistic term for) tax avoidance be a legitimate answer to question 1?

 

[troubled soul]

• Kindly confirm the reason(s) / rationale for choosing to establish a banking relationship in the British Virgin Islands.

Asset protection
Diversification
I find your bank Safe.
Currency diversification
Higher interest rates on your savings
Flexibility for running online business

You can choose which suits you better

• Please provide a full description of the main activities of the company, including for example, goods traded or goods provided.

Your business Details

• Please list all the countries in which your business activity takes place.

You know the answers

 

[Sols]

• Kindly confirm the reason(s) / rationale for choosing to establish a banking relationship in the British Virgin Islands.

Ask yourself, why are you?

If it's for tax avoidance, keep in mind that information about your bank account is going to become known to your home country under automatic exchange of information, aka CRS. Whether there is an agreement in place today or will be in the future, a bank account in your name or the name of a company that you own/control is going to become known to your tax authority back home. See Exchange relationships - Organisation for Economic Co-operation and Development

Some still acceptable reasons include diversification and stability (if banks where you live are known for being fragile), access to new currencies, doing business locally/regionally (if you are), and access to financial products not available locally (if you plan to use such).

I would recommend against calling it "asset protection" because that implies you're going to be difficult. Don't make it easy for them to turn you down.

• Please provide a full description of the main activities of the company, including for example, goods traded or goods provided.
• Please list all the countries in which your business activity takes place.

You should know these. Explain the business in detail including counterparts you will be sending money to and receiving money from.

The more transparent you are, the better. You do yourself a favor by making it easy for them to understand if your overall risk profile fits within their risk appetite. It's better to receive an early no than opening the account, trading for a while, and then suddenly being shut down because you're doing something that you didn't tell them about earlier and that falls outside of their acceptance policy.

 

[Spinnaker]

What would be red flags in the answers to these questions?

As you may imagine, for your third question, any country under UN sanctions would automatically rise a red flag. Also, any country that has the BVI in a black/grey list would have similar consequences.

 

[Damon Nomad]

Sols, I'm all for being transparent, because everything I do is fully legal. The reason for my post is simply to avoid any wording that may set off any alarms unnecessarily. And TBH, I'm doing it for the purpose of tax avoidance, which is still legal. But the answers here seem to suggest I should avoid giving that as a reason? Because the banks don't like it?

Yes, I know which countries my business activity takes place. Coincidentally, currently only my birth country... I'm emigrated, domiciled abroad and conduct my business abroad. So, still legal, but the optics aren't great. I'm wondering how much the banks care?

 

[troubled soul]

tax avoidance be a legitimate answer to question 1?

If only motive is Tax saving, better to Move to low tax or tax free country.
Offshore world become harder and Harder in these days.

If you are sound rich and have army of lawyer, than It is worth headache.
Other simply move to tax free country.

Personal View.
I am not expert.

Because Government Caught some irregularity, First they fine bank, for facilitate irregularity , after they come after you.
So banks are more worry than you for providing service to you.

Now a day BVI and other Caribbean setup use for Wealth management, Running the Day to day Business with Sound bank account is very hard , Unless you have sound money.

 

[Sols]

But the answers here seem to suggest I should avoid giving that as a reason? Because the banks don't like it?

The line is blurry between tax avoidance and tax evasion. If you put down "I would like to avoid taxes by banking with you", the compliance officer is very likely going to throw your application in the bin. As a non-resident client approaching the bank directly (and not via a trusted introducer), you are given very little benefit of the doubt.

Frame it as seeking international banking instead and specific products/services the bank has to offer, especially if you approach them with a BVI company to go with it.

If you live in a well-known place which has some sort of territoriality or remittance-basis in its tax system, you can safely mention that you wish to keep money in a foreign bank due to favorable tax system where you live.

I'm wondering how much the banks care?

They do. It's not hip to bank tax dodgers anymore. Banks don't like it, unless you're depositing seven figures and up, and can afford to creative arrangements to protect them.

 

[Martin Everson]

Kindly confirm the reason(s) / rationale for choosing to establish a banking relationship in the British Virgin Islands.

Say your planning to emigrate to BVI in 2023

Please provide a full description of the main activities of the company, including for example, goods traded or goods provided.

Describe only one activity

Please list all the countries in which your business activity takes place.

List no more then 2 countries and not US, UK or some eastern European sh1thole. They don't want that heat.


Why did you choose the BVI branch and where is your company based?

P.S I have personal bank acount with CIBC and I will be impressed if they open you a business account.

 

[ernestdezoe]

name of a company that you own/control is going to become known to your tax authority back home

Active NFEs don't get reported, and Active NFEs are the bread and butter of this website, ain't nobody is opening bank accounts for their offshore company to administer 7 figures net worth by investing in stocks and bonds

 

[uplana]

Active NFEs don't get reported,

what are these, can you explain in details what NFE's are ?

 

[ernestdezoe]

what are these, can you explain in details what NFE's are ?

https://www.asx.com.au/data/CRS-FACTA-Self-Certification-Key-Definitions.pdf
Basically you are golden automatically for the first 24 months, but that's kinda ambigous and you don't want the bank to come back at you 2 years from now asking for new paperwork , so it's better to declare Active NFE because you don't earn passive income (interest, royalties and dividends) and you don't have assets on the balance sheets which produces passive income (Intellectual property patents, stocks, bonds etc.) , which for 99% of people on this website is the pure truth

If the bank is really anal about it could consider the cash you hold with them as passive income ( Lol what passive income? interest rates are sub zero) they could interpret the Common Standard literally and come back at you saying that "potentially" you could earn passive income with that sum.

I think the last part only happens with banks that have as Head of compliance for FATCA and CRS people who either wrote the law themselves or were on the other side before (working at the IRS, OECD, EU, Tax transparency NGOs etc.)

 

[Martin Everson]

Active NFEs don't get reported, and Active NFEs are the bread and butter of this website, ain't nobody is opening bank accounts for their offshore company to administer 7 figures net worth by investing in stocks and bonds

Stop pushing this wrong information. I covered this in 2019 threads below.

https://www.offshorecorptalk.com/th...ve-nfe-unclear-help-needed.26838/#post-104549
https://www.offshorecorptalk.com/th...e-person-for-purposes-of-crs.26369/post-99841

 

[ernestdezoe]

Stop pushing this wrong information. I covered this in 2019 threads below.

https://www.offshorecorptalk.com/th...ve-nfe-unclear-help-needed.26838/#post-104549
https://www.offshorecorptalk.com/th...e-person-for-purposes-of-crs.26369/post-99841

I think simple logic will solve this, regardless of what's written on the CRS or by you , me or by Morris . Morris by the way he has been proven wrong ever since he started given that he anticipated changes to the active nfe regime ever since 2016...at least that is when he first wrote about it...for sure he was anticipating them just after his first reading of the Standard text.

CRS is applied at the bank level. Banks know that accounts which are reported then will be closed by either the UBO or forcefully by the UBO tax agency.

this means that BANKS ARE ON YOUR SIDE , and will always be, up until their plausable deniability goes away. There is a whole lot of plausable deniability for banks built in the standard. They are not economic police and the judicial entities which are poised to judge their conduct are their own country domestic entities

Yet another step down the chain, the domestic entities also didn't create the CRS/FATCA/Economic Substance etc... it was imposed upon them by the EU. Their goal is to make believe that they are applying them just enough to avoid problems...they'll never go the extra mile and would always apply the most lax procedural framework which is written on paper but almost always not followed practically speaking.

In any event everything that I said can be resumed by looking at the building of the German tax authority vs. the building of the Caribbean tax authorities

 

[Martin Everson]

What the hell are you rambling on about now...lol?

As I mentioned in my links banks use automated CRS software to produce reports to submit to their local tax office to forward onward to foreign tax office. CRS is a compliance department issue and not dealt with by bankers. There is a firewall between those departments in a bank.

In any event everything that I said can be resumed by looking at the building of the German tax authority vs. the building of the Caribbean tax authorities

I live in the Caribbean. What has size of buildings got to do with anything. If my local tax office gets data here they throw it in bin as there is no tax obligations in Bahamas in that area. We have very few taxes hence small tax office. You don't need big office and lots of people just to hit delete key on data you receive as its not relevant to us here. Germany on other-hand has lots of taxes hence it needs a big tax department and office. But again what has this got to do with anything.

 

[ernestdezoe]

There is a firewall between those departments.

Who is paying the salary of banks compliance departments? In the words of capt. Sully magistrally potrayed by Tom Hanks : "Can we get serious now?"

How did those compartments work for JPMorgan's London Whale, and UBS ...and Credit Suisse... and HSBC ....and Wells Fargo and 1MBD... all the aforementioned are top reputable institutions...and these are the cases that we know of...think of what happens behind the scenes that we don't know of because it involves people who are too politically exposed.

I can only imagine what rigorous separations goes on in the Caribbean or UAE banks which again are targeted by those who populate this website who are again just trying to open a bank account for their Active NFE

And the reason why Bahamas has a 0 tax rate across the board is the same reason why they'll resist every step of the way before stabbing the clients in the back. The political leadership as well as citizenery as well as bank employees (including compliance depts) know that if Western and Asian clients money flows back home....it's back to fishing for them

 

[Martin Everson]

Who is paying the salary of banks compliance departments?

The bank

How did those compartments work for JPMorgan's London Whale, and UBS ...and Credit Suisse... and HSBC ....and Wells Fargo and 1MBD... all the aforementioned are top reputable institutions...and these are the cases that we know of...think of what happens behind the scenes that we don't know of because it involves people who are too politically exposed.

Compliance and risk departments failed in their duties.

I can only imagine what rigorous separations goes on in the Caribbean or UAE banks which again are targeted by those who populate this website who are again just trying to open a bank account for their Active NFE

Depends on bank but yes you are right there are joke bank out there. Caribbean banks are generally not sophisticated and mostly joke banks. You need not wonder why Tether chose Deltec bank in Bahamas . Some UAE banks are worse look at this clown bank below:

https://www.bbc.com/news/stories-42878021

 

[ernestdezoe]

The bank



Compliance and risk departments failed in their duties.



Depends on bank but yes you are right there are joke bank out there. Caribbean banks are generally not sophisticated and mostly joke banks. You need not wonder why Tether chose Deltec bank in Bahamas . Some UAE banks are worse look at this clown bank below:

https://www.bbc.com/news/stories-42878021

Well okay then, seems to me that it's important to discuss the practicality of what happens on the ground opposed to the black ink on white paper

 

[Silvio]

I think simple logic will solve this, regardless of what's written on the CRS or by you , me or by Morris . Morris by the way he has been proven wrong ever since he started given that he anticipated changes to the active nfe regime ever since 2016...at least that is when he first wrote about it...for sure he was anticipating them just after his first reading of the Standard text.

CRS is applied at the bank level. Banks know that accounts which are reported then will be closed by either the UBO or forcefully by the UBO tax agency.

this means that BANKS ARE ON YOUR SIDE , and will always be, up until their plausable deniability goes away. There is a whole lot of plausable deniability for banks built in the standard. They are not economic police and the judicial entities which are poised to judge their conduct are their own country domestic entities

Yet another step down the chain, the domestic entities also didn't create the CRS/FATCA/Economic Substance etc... it was imposed upon them by the EU. Their goal is to make believe that they are applying them just enough to avoid problems...they'll never go the extra mile and would always apply the most lax procedural framework which is written on paper but almost always not followed practically speaking.

In any event everything that I said can be resumed by looking at the building of the German tax authority vs. the building of the Caribbean tax authorities

No bank is on your side.

Banks only want your fees and will f**k you in an instant if the alternative is losing their license or paying 9 figure fines.
Some banks are stupid and have lacking compliance departments but don't count on it to save your a*s.

CRS is most automatic, bankers don't have any say in the matter, sometimes they may even add reporting based on your passport if they deem it necessary based on other indicia you have provided.

Bottom line it's your choice whether to believe someone in a forum or to actively cover your a*s.

 

[ernestdezoe]

Banks only want your fees

this is wrong. Banks can do 10x-15x with the amount you deposit there. 500k support 5M of loans thanks to fractional banking

That is the reason why banks care about small fishes anyway. Giants like HSBC, JPMorgan etc. would require a minimum deposit in the 7 or 8 figures if it wasn't for the leverage of fractional reserve banking. For sure they don't make their money with the fees

 

[Silvio]

this is wrong. Banks can do 10x-15x with the amount you deposit there. 500k support 5M of loans thanks to fractional banking

That is the reason why banks care about small fishes anyway. Giants like HSBC, JPMorgan etc. would require a minimum deposit in the 7 or 8 figures if it wasn't for the leverage of fractional reserve banking. For sure they don't make their money with the fees

Man, no offence but you watched too many YouTube videos about the (((banking cartel))) and the Illuminati...

I advise you to read any bank's financial statements, you will be in for a surprise.. or just think for yourself how is it that Deutsche Bank, one of the biggest banks in the world, keeps losing billions of euros every year...