Italian Friend living in Ecuador - Needing a reliable offshore personal bank

[OCT2023]

I have an Italian friend who trades Forex ... she recently moved from Italy to Ecuador because she wants to trade Binaries again (no longer allowed in Italy).

Ecuador will not tax her foreign income, as long as she works remotely (which trading falls into).

While she can register with Brokers with her Ecuadorian information, she was advised to use a bank external to Ecuador.

She does not want to use her Italian bank because she's having some issues with it and they want her to come back in person.

She would use the offshore bank mostly for living expenses, pulling money from an ATM, etc. or to move money around between brokers, etc.

Any suggestions for her? Low Fees preferred. I thought Wise might be a good option since she won't be keeping a lot of money in the account.

Thanks much!

 

[Shories]

I have an Italian friend who trades Forex ... she recently moved from Italy to Ecuador because she wants to trade Binaries again (no longer allowed in Italy).

Ecuador will not tax her foreign income, as long as she works remotely (which trading falls into).

While she can register with Brokers with her Ecuadorian information, she was advised to use a bank external to Ecuador.

She does not want to use her Italian bank because she's having some issues with it and they want her to come back in person.

She would use the offshore bank mostly for living expenses, pulling money from an ATM, etc. or to move money around between brokers, etc.

Any suggestions for her? Low Fees preferred. I thought Wise might be a good option since she won't be keeping a lot of money in the account.

Thanks much!

Pretty much the only offshore bank that can onboard someone like her is Kingdom Bank. (However, Kingdom Bank may sometimes annoy her about the source of funds).

 

[Cloudbanck]

Pretty much the only offshore bank that can onboard someone like her is Kingdom Bank. (However, Kingdom Bank may sometimes annoy her about the source of funds).

How about Xapo? Or HSBC and Barclays offshore accounts? Or some of the Puerto Rico based banks? Or Singapore banks?

And then with the Italian address it is possible to open an account at European EMIs like Revolut, Wise, Zen and lots of others. And then one can change address or remove Italian tax residency and generally still stay as a client.

 

[Shories]

How about Xapo? Or HSBC and Barclays offshore accounts? Or some of the Puerto Rico based banks? Or Singapore banks?

And then with the Italian address it is possible to open an account at European EMIs like Revolut, Wise, Zen and lots of others. And then one can change address or remove Italian tax residency and generally still stay as a client.

If you use an Italian proof of address, the EMI will think you're an Italian resident, so you might need to prove your Italian tax residency as there (and could potentially get her account blocked), and as I understood, she is en Ecuadorian tax resident.

As for other EMIs or HSBC fine. but they have a high minimum as well and they mostly work on a case by case basis for third parties. HSBC has high limits.

 

[Cloudbanck]

If you use an Italian proof of address, the EMI will think you're an Italian resident, so you might need to prove your Italian tax residency as there (and could potentially get her account blocked), and as I understood, she is en Ecuadorian tax resident.

I have accounts at a bunch of European EMIs and never had anyone of them asking to prove tax residency. What they ask is just to prove the address with a utility bill or bank statement, and for a TIN number. Tax residency is determined in hindsight, and can depend on factors like spending a few more days in country X, having a teenage child spending time in country Y, whether a house you own is deemed for year round use or not, etc. Banks can't really determine this, so they just ask for the TIN number.

And Im familiar with quite a few European citizens who have opened an account with Revolut using an EU address while living in (or planning to move to) the UAE or other countries not supported by Revolut, and then set their tax residency to the UAE/other country in Revolut. Revolut doesnt seem to be closing accounts in this case.

As for other EMIs or HSBC fine. but they have a high minimum as well and they mostly work on a case by case basis for third parties. HSBC has high limits.

Yeah some have high minimums, but Xapo has "just" 10k USD as minimum. And Zenus Bank on Puerto Rico is available for residents in Ecuador and has no minimum.

 

[Don]

I have accounts at a bunch of European EMIs and never had anyone of them asking to prove tax residency. What they ask is just to prove the address with a utility bill or bank statement, and for a TIN number. Tax residency is determined in hindsight, and can depend on factors like spending a few more days in country X, having a teenage child spending time in country Y, whether a house you own is deemed for year round use or not, etc. Banks can't really determine this, so they just ask for the TIN number.

And Im familiar with quite a few European citizens who have opened an account with Revolut using an EU address while living in (or planning to move to) the UAE or other countries not supported by Revolut, and then set their tax residency to the UAE/other country in Revolut. Revolut doesnt seem to be closing accounts in this case.


Yeah some have high minimums, but Xapo has "just" 10k USD as minimum. And Zenus Bank on Puerto Rico is available for residents in Ecuador and has no minimum.

With the amendments to the CRS, entities that hold specific Electronic Money Products or Central Bank Digital Currencies for the benefit of customers become Financial Institutions under CRS. As such, they need to collect and review self-certification forms from their new customers as from the entry into force of the changes.
For pre-existing customers, those in-scope EMIs need to determine their tax residence and CRS status either based on a self-certification or information at their disposal or that is publicly available.
However, smaller accounts that represent specific Electronic Money Products held for the benefit of a customer will be excluded from these review and reporting requirements (in case the rolling average 90 day end-of-day aggregate account balance or value during any period of 90 consecutive days did not exceed USD 10,000 at any day during the reporting period).

So it depends

 

[Cloudbanck]

With the amendments to the CRS, entities that hold specific Electronic Money Products or Central Bank Digital Currencies for the benefit of customers become Financial Institutions under CRS. As such, they need to collect and review self-certification forms from their new customers as from the entry into force of the changes.
For pre-existing customers, those in-scope EMIs need to determine their tax residence and CRS status either based on a self-certification or information at their disposal or that is publicly available.
However, smaller accounts that represent specific Electronic Money Products held for the benefit of a customer will be excluded from these review and reporting requirements (in case the rolling average 90 day end-of-day aggregate account balance or value during any period of 90 consecutive days did not exceed USD 10,000 at any day during the reporting period).

So it depends

Well, even for those accounts over 10k, you still dont have to prove tax residency. You just fill in the self certification form, which is part of any bank account opening really.

And then take the previous example. You open an account with Revolut with your Italian address and say you are an Italian tax resident in self certification, and give your Italian TIN number. Then, some time later, you say to Revolut that you are no longer an Italian tax resident (by pressing a button in the app), and add that you are a tax resident in Ecuador instead (Ecuador is in the drop down menu for tax residencies). And then you keep happily using Revolut, while living in Ecuador. And if Ecuador is part of CRS, Revolut will send info to Ecuador, but I doubt Ecuador cares much about that.

 

[daniels27]

DKB in Germany. Use a German, Swiss or Austrian address to open it. Probably lowest fees and you may even be able to change your address to Ecuador.

Otherwise Yuh in Switzerland, you will need to use your friends address in Italy to open.

If travel is no problem US banks in person.

 

[OCT2023]

Well, even for those accounts over 10k, you still dont have to prove tax residency. You just fill in the self certification form, which is part of any bank account opening really.

And then take the previous example. You open an account with Revolut with your Italian address and say you are an Italian tax resident in self certification, and give your Italian TIN number. Then, some time later, you say to Revolut that you are no longer an Italian tax resident (by pressing a button in the app), and add that you are a tax resident in Ecuador instead (Ecuador is in the drop down menu for tax residencies). And then you keep happily using Revolut, while living in Ecuador. And if Ecuador is part of CRS, Revolut will send info to Ecuador, but I doubt Ecuador cares much about that.

Thanks for all of the great information, going to look into Zenus and Revolut tomorrow ... would Revolut have a probem with her registering with her Ecuadorian ID, etc? You're advising its best to register through Italy first and change Tax Residency later?

 

[Cloudbanck]

Thanks for all of the great information, going to look into Zenus and Revolut tomorrow ... would Revolut have a probem with her registering with her Ecuadorian ID, etc? You're advising its best to register through Italy first and change Tax Residency later?

Yeah, you cant register a new Revolut account as a resident of Ecuador. Revolut writes:

"At the moment, we're only able to support legal residents of the European Economic Area (EEA), Australia, New Zealand, Singapore, Japan, Brazil, Switzerland, the United Kingdom, and the United States.

We unfortunately aren’t able to offer accounts in overseas territories such as Gibraltar.

You can open a Lite account if you’re a legal resident of the following countries or territories:

• Armenia
• Azerbaijan
• Bangladesh
• Chile
• Kazakhstan
• Kuwait
• Macao SAR, China
• North Macedonia
• Oman
• Qatar
• Republic of Moldova
• Saudi Arabia
• Sri Lanka
• Vietnam

We’re launching in other places around the globe soon, so stay tuned!"

The key is to register as an Italian/EEA citizen with an Italian/EEA address. Then they still accept you as a client even if you go and become tax resident in an odd country. Guess they don't want to lose clients, and count on EEA citizens to sooner or later move back to the EEA, which they statistically do. And regulations usually dont require banks to close accounts for citizens of developed countries that go and live abroad.

 

[OCT2023]

Yeah, you cant register a new Revolut account as a resident of Ecuador. Revolut writes:

"At the moment, we're only able to support legal residents of the European Economic Area (EEA), Australia, New Zealand, Singapore, Japan, Brazil, Switzerland, the United Kingdom, and the United States.

We unfortunately aren’t able to offer accounts in overseas territories such as Gibraltar.

You can open a Lite account if you’re a legal resident of the following countries or territories:

• Armenia
• Azerbaijan
• Bangladesh
• Chile
• Kazakhstan
• Kuwait
• Macao SAR, China
• North Macedonia
• Oman
• Qatar
• Republic of Moldova
• Saudi Arabia
• Sri Lanka
• Vietnam

We’re launching in other places around the globe soon, so stay tuned!"

The key is to register as an Italian/EEA citizen with an Italian/EEA address. Then they still accept you as a client even if you go and become tax resident in an odd country. Guess they don't want to lose clients, and count on EEA citizens to sooner or later move back to the EEA, which they statistically do. And regulations usually dont require banks to close accounts for citizens of developed countries that go and live abroad.

Excellent, I'll do a comparison for her of Revolut vs Zenus ... appreciate the info! This community is great!

 

[Cloudbanck]

Excellent, I'll do a comparison for her of Revolut vs Zenus ... appreciate the info! This community is great!

I'd recommend to open accounts at a few EMIs, so you dont depend on a single one, and have backups if any one gets closed down.

 

[Forester]

Excellent, I'll do a comparison for her of Revolut vs Zenus ... appreciate the info! This community is great!

You are welcome.
But forget about Revolut for this purpose. Revolut is problematic in general (if you like to learn, search here) and for this use-case it is really an unwise option.

The key is to register as an Italian/EEA citizen with an Italian/EEA address. Then they still accept you as a client even if you go and become tax resident in an odd country.

Unfortunately, it is not true anymore (in general, incidental exceptions may exist).

I'd recommend to open accounts at a few EMIs, so you dont depend on a single one, and have backups if any one gets closed down.

I agree at 100%.
In addition to Zenus, which is a good choice, I recommend checking Verifo, Paysera, Interpolitan Money and perhaps Zen.com. They all could be fine with Ecuadorial residency (not sure about Zen, though).
And yes, if @OCT2023 's friend is able and willing to deposit a reasonable amount (but not such a big like e.g. with CH private banks), banks at Channel Islands and Singapore are a valid and good option.

 

[Cloudbanck]

Unfortunately, it is not true anymore (in general, incidental exceptions may exist).

How do you know? Since when? And what if you keep the EEA address but just change the tax residency? That's what most people seem to be doing actually. Maybe there is a higher risk of closing if you also change the address.

My personal experience is from West Africa. I know tons of Europeans living here that still use Revolut, and havent heard a single one that had an account closed.

And there is this reddit thread where people report living in UAE and changing tax residency in Revolut to UAE, and it still working fine.

https://www.reddit.com/r/dubai/comments/10e8it2/revolut_account_from_uk_uae

Revolut itself writes:

"Why is my country not visible on the list of tax residencies?​

There should be nothing to worry about. If your country is not in the list, it's likely it's not a part of the OECD countries and doesn't require declaration."

Seems like they are quite ok with tax residencies in odd countries.

 

[Forester]

How do you know? Since when?

Personal experiences of a remarkable number of people in the last 1-1.5 years.
Do not overlook that for EU citizens, Revolut is a bank nowadays and acts accordingly.

And what if you keep the EEA address but just change the tax residency? That's what most people seem to be doing actually. Maybe there is a higher risk of closing if you also change the address.

Well. In general, my personal opinion re: Revolut (and Wise too, BTW) is I think well known here. Just quoting: If Wise is going to close accounts and is not the best, how diversify the money?
Hence, in such a situation I definitely would not recommend trying any tricky scenarios like above. The risk level is simply too high.
And when another, more safe solution exists, as in the case of @OCT2023 's friend, I simply would not dare to recommend Revolut...

 

[Kirito]

Ecuador will not tax her foreign income, as long as she works remotely (which trading falls into).

Where did she get that idea?

Ecuador has universal taxation, no matter where yours income comes from, you must pay for it. After 183 days of living in Ecuador, you become a tax resident and you must pay for your worldwide income (there are additional conditions that make you tax resident too).

Using a non ecuadorian bank helps to avoid government looking at your source of income, but she must fly low (live with less than 15k a year) to avoid questions.

But I don't recommend that because the current president is pushing against the tax evasion.

 

[OCT2023]

Where did she get that idea?

Ecuador has universal taxation, no matter where yours income comes from, you must pay for it. After 183 days of living in Ecuador, you become a tax resident and you must pay for your worldwide income (there are additional conditions that make you tax resident too).

Using a non ecuadorian bank helps to avoid government looking at your source of income, but she must fly low (live with less than 15k a year) to avoid questions.

But I don't recommend that because the current president is pushing against the tax evasion.

Unfortunately it was told to her by an Ecuadorian Accountant. I'll ask her to find a 2nd and 3rd opinion.

 

[Kirito]

Unfortunately it was told to her by an Ecuadorian Accountant. I'll ask her to find a 2nd and 3rd opinion.

Most accountants know nothing about international income

She needs to check with many ones to get the correct answer.

However, no matter who she consults to, she must pay taxes. The consults will help her to optimize the payment.

 

[OCT2023]

Most accountants know nothing about international income

She needs to check with many ones to get the correct answer.

However, no matter who she consults to, she must pay taxes. The consults will help her to optimize the payment.

Sounds like it might be better for her to look into starting an offshore company to do trading and pay herself <$11,902 to her Ecuadorian Bank to avoid taxation in Ecuador. Will need to consult the brokers about how this can be feasible. More research ... thank you for the heads up.

 

[Kirito]

Sounds like it might be better for her to look into starting an offshore company to do trading and pay herself <$11,902 to her Ecuadorian Bank

Yes and no

12K is a regular live in Ecuador, with 24K, you can have a good mid-class life.

You just need to take advantage of deductions, so you just pay around 300 USD each year