Personal bank account/private banking in non CRS / CRS countries for Canadian/European resident

[boy20hki]

I would like to ask this question for myself, as for this stage I am planning to move to Canada. But this could be reliable for any EU tax residents I guess, not just Canada. To clarify, I am non-US non-EU citizen.

So for a Canadian resident A who
+needs to stay in Canada most time of the year aka more than 183 days therefore has to be Canadian tax resident for at least 4-6 years (cannot relocate to Dubai during this time, for personal reason)
AND
+can incorporate either a US LLC or a UAE company, and want to keep most of profit in company account (local brick mortar UAE/US bank account and EMI) while paying small amount for salary/dividend to personal bank account of owner A held in a Canadian bank

1. What is the implication of setting up personal bank account in CRS/non-CRS countries? The goal is to reduce taxable income as Canadian tax resident and hide money in foreign accounts

-If A sets up personal accounts in CRS countries (private banking options like banks in SG, UAE, CH, UK): will the Canadian tax office automatically be notified of the account UBO + balance information due to CRS, and know that this is undeclared personal income from foreign souce and A could get in trouble? or will the tax office ignore the account if it is small (less than 1M-2M, for example)? as th

-If A sets up personal accounts in non- CRS countries as non-residents: this is safest way to avoid Canadian government's scrutiny, right? Currently there are 8 non-CRS countries that seem to be whitelisted and possible to open personal bank account (Group 1: Egypt, North Macedonia, Paraguay, Puerto Rico...Group 2: Cambodia, Mongolia, Nepal, Philippines.....Armenia & Georgia joins CRS recently so not possible with them). The possible issue with this is when bank asks for source of fund or personal tax return. For the 1st opening deposit, its okay to just show them the personal Canadian tax return (reasonable wage/salary) & bank statement of the US LLC/UAE company and say that This is a company I own and I use this personal account to receive dividend/salary from the company account? Not sure about subsequence deposits, as the local bank may see that the personal tax return shows smaller salary/income while the incoming deposit is much larger and suspect of undeclared income?

2. Between the US LLC & UAE company owned by Canadian tax resident

For UAE, it is white hat way to remit small dividend/slary to owner while keeping most of money in UAE company account but as UAE joins CRS and shares data to Canada this does not really work for the goal above. For US LLC, all profit pass through as owner personal income and get taxed as personal income in Canada so if doing white hat way, have to pay a lot more tax in Canada but it is easier to hide the money from Canadian tax office than a UAE company. It is easier to fly under radar with US LLC because US does not join CRS and does not share bank account data to Canada under FATCA.

So my assumption is Canadian tax resident + US LLC + personal account in those 8 non-CRS countries is the best option?

 

[Mssquirrel]

Most non CRS countries won't open accounts to non-residents anymore. You can get a fast residency in Paraguay but banking is not great, maybe you can get the ID and open some banks like Xapo or Dukascopy as Paraguayan resident and then they would report you there.
Anyways is sort of a fraud and if they find out you will be fucked probably.
I think Montenegro is still non CRS and you can get accounts and residency easy there.
Anyways probably would be better jus move to another country and avoid fraud.

 

[boy20hki]

Most non CRS countries won't open accounts to non-residents anymore. You can get a fast residency in Paraguay but banking is not great, maybe you can get the ID and open some banks like Xapo or Dukascopy as Paraguayan resident and then they would report you there.
Anyways is sort of a fraud and if they find out you will be fucked probably.
I think Montenegro is still non CRS and you can get accounts and residency easy there.
Anyways probably would be better jus move to another country and avoid fraud.

Thanks for your input. Yes I know its much easier to just move my a*s to UAE, but still I have other goals too to do, not just tax opimtization

Here is the CaRs country list and scheduled exchange date (April 2023)

https://www.oecd.org/tax/automatic-exchange/commitment-and-monitoring-process/AEOI-commitments.pdf

-Montenegro is listed in the report, to report in 2023 so I think it's already in CRS?
-Paraguay: Thanks for your input, do you know the requirements to get the fast residency? (which type of residency, cost, duration of stay, required documents)?

Below are some suggestions from older threads about possobiel banking options for non-residents, I am not sure if they are still working as you said most do not work, but I post here anyway to get some input from other people

+Cambodia: ANZ Royal and Ababank
+North Macedonia: Silk Road Bank, Halkbank, ProCrdit
+Egypt: ?
+Mongolia: ?
+Nepal: ?
+Philippines: ?
+Puerto Rico: ?

+Belarus, Cuba, Serbia: Quite some mentions of them in other threads, but they seem to be gray listed and have trouble with transaction with clean countries' banks so not best option

I am citizen of one of those SEA countries listed in the last part of the PDF file above that have not committed to set out a date to report info (DEVELOPING COUNTRIES NOT ASKED TO COMMIT AND THAT HAVE NOT YET SET A DATE FOR THE FIRST YEAR OF EXCHANGES (44)). Can always come back home and open a bank account there, but not sure if that's good idea.

 

[Sols]

I would like to ask this question for myself, as for this stage I am planning to move to Canada.

Don't live in Canada if you don't like Canadian tax law. With enough wealth and connections, you have the whole world to choose from. Why choose to live in a country whose tax laws you don't like?

1. What is the implication of setting up personal bank account in CRS/non-CRS countries? The goal is to reduce taxable income as Canadian tax resident and hide money in foreign accounts

The implication is that you have to manually report any income received on that bank account to the Canadian tax authority, since you cannot rely on the convenience of CRS.

Or, worst case, risk having your visa revoked if/when they find out about your bank account and your tax evasion (unless they jail you first).

-If A sets up personal accounts in CRS countries (private banking options like banks in SG, UAE, CH, UK): will the Canadian tax office automatically be notified of the account UBO + balance information due to CRS, and know that this is undeclared personal income from foreign souce and A could get in trouble? or will the tax office ignore the account if it is small (less than 1M-2M, for example)?

Canada will be automatically notified.

Small amounts may be ignored for now but don't learn from history. Things are changing quickly. Automatic tools are being deployed that will make busting a tax evader a mere click of a button (or fully automated).

-If A sets up personal accounts in non- CRS countries as non-residents: this is safest way to avoid Canadian government's scrutiny, right?

Even without CRS, you still need to be mindful of data leaks. Prosecutors and tax authorities often receive or buy data from whistleblowers and other sources of data leaks.

The best way to avoid being scrutinized by the Canadian tax authority is to be completely transparent. Then they'll leave you alone.

Thanks for your input. Yes I know its much easier to just move my a*s to UAE, but still I have other goals too to do, not just tax opimtization

You're in 2023 looking for 2003 type solutions.

-Montenegro is listed in the report, to report in 2023 so I think it's already in CRS?

Yes.

+Cambodia: ANZ Royal and Ababank

IIRC, relatively easy to open an account, but you usually need to show up in person.

+North Macedonia: Silk Road Bank, Halkbank, ProCrdit

Relatively easy to open an account if you have some local connection (company, property), or if you know the right people.

+Egypt: ?

IIRC, @MiddleEuroAsia might be able to shed some light here. I'm not impressed by what I've seen but can't deny there seem to be opportunities.

+Mongolia: ?

Not really practical. The non-resident banking done there is mostly high interest rate savings account in the local currency. Quite useless for anything else.

+Nepal: ?

Don't waste your time.

+Philippines: ?

Can be done for non-residents but it's been getting more difficult lately. If you get some sort of residence permit, it's easy.

+Puerto Rico: ?

A lot of banks and quasi banks there. Easy to open an account remotely. Lax regulation and unreliable regulator (see the EuroPacific Bank fallout).

+Belarus, Cuba, Serbia: Quite some mentions of them in other threads, but they seem to be gray listed and have trouble with transaction with clean countries' banks so not best option

A lot of things are possible in Belarus, but with the recent slew of sanctions it's not that attractive anymore if you transact with western countries.

Cuba is practically impossible to bank in.

Serbia is comparable to Macedonia. A lot of things can be arranged through unofficial channels with the right contacts. Otherwise, you'll need to demonstrate a connection to Serbia or deposit an amount of money in Serbia that makes no sense (if you have millions, you don't put them in Serbia).

 

[princeofprofits]

As a resident of Kanuckistan the simple answer is do not move here! There isn't really a good way to use a personal account and minimize tax liability.

I cannot post links yet but look into a "controlled foreign affiliate" vs "foreign affiliate" when structuring the shareholder division of your Canadian enterprise. Doing business in Canada with effective tax minimization requires multiple corporations in multiple jurisdictions and minority control by the Canadian Tax Resident. You need shareholders who are non-residents.

I am a complete novice but that is what I gathered so far. Also reliable banking is far more difficult to achieve than residency or opening corporate entities in havens. Keep that in mind and heed the advice in this thread... very helpful by the way!

 

[boy20hki]

The implication is that you have to manually report any income received on that bank account to the Canadian tax authority, since you cannot rely on the convenience of CRS.

Thanks for your useful reply.
it is undeclared income that has not been taxed and stored in offshore account - so there is always a risk the authority finds out, yes.
If it is declared, taxed, and sent to offshore account then absolutely no problem.

Don't live in Canada if you don't like Canadian tax law. With enough wealth and connections, you have the whole world to choose from. Why choose to live in a country whose tax laws you don't like?

I plan to live there for only couple of years, but eventually will leave to major tax heaven anyway. Still Canadian passport is very useful for me personally and professionally in a lot of ways, so have to compromise for a while.

So my assumption is Canadian tax resident + US LLC + personal account in those 8 non-CRS countries is the best option?

What would you think about this? From the information you shared, it is possible to do personal account in a few non-CRS countries. Technically speaking, this combo could work, right? Again, I understand I should be wary, stay under radar, socially and online, and not draw attention.

Below is my little summary note from other thread + this thread for anyone interested:

Non CRS Countries

Easiest
+Belarus: A lof of things are possible but sanctions make banking hard if you transact to/from western nations. Bank accounts can be opened by non-residents
+Puerto Rico: Easy to open account remotely. A lot banks and quasi banks there. Lax regulation and unreliable regulator (see the EuroPacific Bank fallout)
+Egypt: Business friendly banking, not blacklisted/greylisted, cash friendly. Personal accounts are guaranteed. Corporate accounts, they will accept you, sometimes you may have to have a local nominee director.
+Cambodia: ANZ Royal, Ababank. Can be opened in person relatively easily, but need to show up in person


Moderately difficult
+Serbia: Postal Bank, Halk bank, MTS. It's on the edge of EU gray/blacklistings for its weak AML laws. Expect a lot of questions for moving money in and out of Serbia. Bank accounts can be opened by non-residents but you have to arrange through unofficial channels with the right contacts. Otherwise you have to prove some connection to Serbia OR deposit a large amount of money
+North Macedonia: Silk Road Bank, Halkbank, ProCrdit bank. Relatively easy to open account if you know the right people OR have some local connection (company, property)
+Philippines: possible to open accounts for non-residents but it has been getting more difficult lately. If you can get some sort of residence permit, it’s easy.
+Paraguay: possible to open in person, may need lawyer help. Can get a fast residency in Paraguay but banking is not great - maybe can get the ID and open some banks like Xapo or Dukascopy as Paraguayan resident and then they would report you there.


Difficult
+Nepal: Difficult
+Mongolia: Not really practical. The non-resident banking done there is mostly high interest rate savings account in the local currency (long term deposit(

I cannot post links yet but look into a "controlled foreign affiliate" vs "foreign affiliate" when structuring the shareholder division of your Canadian enterprise. Doing business in Canada with effective tax minimization requires multiple corporations in multiple jurisdictions and minority control by the Canadian Tax Resident. You need shareholders who are non-residents.

I do not plan to register any CA company at all, but thank you for your information.

 

[Forester]

I agree completely with all that @Sols have posted, underlining that things are rapidly changing worse in Canada (I know what I'm speaking about). Playing hide and seek with taxmen there you are playing with fire.

So my assumption is Canadian tax resident + US LLC + personal account in those 8 non-CRS countries is the best option?


What would you think about this? From the information you shared, it is possible to do personal account in a few non-CRS countries. Technically speaking, this combo could work, right? Again, I understand I should be wary, stay under radar, socially and online, and not draw attention.

Definitely not recommendable. Possible consequences differ with respect to whether you have a Canadian passport (=citizenship) or a residence permit only – I must admit I did not get what is your case; but in any case you can face a court trial for tax evasion very easily and spend some time in jail, too. (I presume you will not be an influential politician in Canada, it would of course change the game )
(Putting aside such details that banking in some of countries you have listed is not much reliable due to general instability there, transfers to and from Serbia to Western world can be complicated, etc.)

 

[MiddleEuroAsia]

So my assumption is Canadian tax resident + US LLC + personal account in those 8 non-CRS countries is the best option?

Hello,

Based on your goals, I think your best options might be:

1. Setting up a UAE Free Zone Company (FZCO) alongside an EID (Emirates ID). This way, from the bank's perspective, you'd be considered a UAE resident and there would be no reporting for now. You could have regular transaction bank accounts for both you and your company ( a company account might take some time ~ 2-3 weeks).
2. Opening both personal and business bank accounts in Egypt. Many UAE banks have local branches in Egypt, and opening accounts there could be easier in some cases than in the UAE. Egypt is a cash-based society with money flowing in and out without major issues, but sometimes you might need to be creative with how things get done. HSBC is also an option, where you can get premier status for just $24k, compared to HSBC Singapore, where you'd need to maintain a balance of $200k+ for the same status, but you need the right connection whether in Egypt or the UAE, as the reality on the ground can differ significantly from what is stated in the laws. so keep that in mind.

In summary, a UAE FZCO coupled with a couple of Egyptian banks (an off-the-beaten-track place to keep some money hidden) should set you up nicely.

Good luck!

 

[Sols]

So my assumption is Canadian tax resident + US LLC + personal account in those 8 non-CRS countries is the best option?

What would you think about this? From the information you shared, it is possible to do personal account in a few non-CRS countries. Technically speaking, this combo could work, right?

Is it technically possible to commit tax evasion? Yes. And if you're willing to accept the potential repercussions that follow if you're caught, no one is stopping you.

Again, I understand I should be wary, stay under radar, socially and online, and not draw attention.

As I mentioned, even without CRS, you still need to be mindful of data leaks. Prosecutors and tax authorities often receive or buy data from whistleblowers and other sources of data leaks.

 

[Mssquirrel]

Thanks for your useful reply.
it is undeclared income that has not been taxed and stored in offshore account - so there is always a risk the authority finds out, yes.
If it is declared, taxed, and sent to offshore account then absolutely no problem.



I plan to live there for only couple of years, but eventually will leave to major tax heaven anyway. Still Canadian passport is very useful for me personally and professionally in a lot of ways, so have to compromise for a while.



What would you think about this? From the information you shared, it is possible to do personal account in a few non-CRS countries. Technically speaking, this combo could work, right? Again, I understand I should be wary, stay under radar, socially and online, and not draw attention.

Below is my little summary note from other thread + this thread for anyone interested:



I do not plan to register any CA company at all, but thank you for your information.

The problem is the more time past the more likely in the future they will make it harder to lose the tax residency. Also every year new countries are joining CRS is not much time left.
I don't know how efficient is the taxman there or if you can go to jail for tax evasion but I would manage my risk, is not the same evade tax in idk Latin America than in a first world country with more resources.

Thanks for your input. Yes I know its much easier to just move my a*s to UAE, but still I have other goals too to do, not just tax opimtization

Here is the CaRs country list and scheduled exchange date (April 2023)

https://www.oecd.org/tax/automatic-exchange/commitment-and-monitoring-process/AEOI-commitments.pdf

-Montenegro is listed in the report, to report in 2023 so I think it's already in CRS?
-Paraguay: Thanks for your input, do you know the requirements to get the fast residency? (which type of residency, cost, duration of stay, required documents)?

Well Montenegro changed then, Paraguay is an easy residency you will need passport, birth certificate (apostilled) clean police record (apostilled) and you need to fly there. As I told you banking system is not great I mean sure you can open an account once you get your ID card but is not easy to receive international transfers they will ask for proof or receipts to know where is the money coming from some banks will ask even for a 500$ transfer. I am personally living here for a while but not using the banking bc can't be bothered to deal with that bs.

 

[GlobalConsult]

Try in North-Korea !

What a stupid request.

 

[johnwickert]

Setting up a personal bank account in a non-CRS country could potentially be safer in terms of avoiding scrutiny from the Canadian government. A US LLC may be easier to hide money from the Canadian government, but it also comes with higher taxes in Canada.

 

[RexS9999]

Has anyone read about Canada Revenue Agency taking action against anyone as a result of CRA? What amount of money would one have to have before they took action? The Canadian government is very inefficient. I read a lot of people mentioning "going to jail". Not in Canada. You can do almost anyting and not go to jail.

 

[Forester]

Paraguay is an easy residency you will need passport, birth certificate (apostilled) clean police record (apostilled) and you need to fly there.

Don't you need also the certificate of education (apostilled)? Also, per my current knowledge, it lasts at least several months to obtain a residency (while you can stay in PY until decision without obstacles); can you comment, as a local guy with own experience?
(I am aware that there are some guys here around the forum who can help with a PY residence; but I do not know how fast.)

Has anyone read about Canada Revenue Agency taking action against anyone as a result of CRA?

Yes, I am aware of it.

What amount of money would one have to have before they took action?

This is the question that probably cannot be truthfully answered by anyone.

The Canadian government is very inefficient.

Yes, it is; and it is IMO getting worse. But it concerns the service; not the prosecution. Recall e.g. Freedom Convoy case.

I read a lot of people mentioning "going to jail". Not in Canada. You can do almost anyting and not go to jail.

Is this your personal experience or do you have it confirmed by some other way?

 

[Mssquirrel]

Don't you need also the certificate of education (apostilled)? Also, per my current knowledge, it lasts at least several months to obtain a residency (while you can stay in PY until decision without obstacles); can you comment, as a local guy with own experience?
(I am aware that there are some guys here around the forum who can help with a PY residence; but I do not know how fast.)

I did it 6 months ago after the law change you don't the education neither the deposit anymore. I got my residency with the cedula in like 5-6 weeks. Then got my tax ID and a DL. It's all easy to get if you have a bit of money, but again the banking system sucks.

 

[RexS9999]

Forester I was involved in this sort of thing as it pertained to criminal matters. In Canada you can do almost anything and not go to jail.

 

[Sols]

It's correct that prison time is rare for just tax crimes. It's usually just a matter of paying taxes owed (work out a payment plan) and maybe some penalties.

However, that's not to say prison time doesn't happen. The leap from tax crime to money laundering, fraud, and other financial crimes is small (and shrinking). If your tax evasion has turned into money laundering, the risk of prison time goes up.

 

[Forester]

I did it 6 months ago after the law change you don't the education neither the deposit anymore. I got my residency with the cedula in like 5-6 weeks. Then got my tax ID and a DL.

Fine. Thanks for sharing.

It's all easy to get if you have a bit of money,

Could you share what amount (just roughly) is needed to do it right? (Because I guess that's the key point. I can PM you if you do not consider proper to share it publicly.)

but again the banking system sucks.

Yes, I am aware of it.

Forester I was involved in this sort of thing as it pertained to criminal matters. In Canada you can do almost anything and not go to jail.

Well – good for you (I cannot judge whether just you are lucky man or the people that I have in mind just had a bad luck ) Nevetheless, congrats

 

[Mssquirrel]

Could you share what amount (just roughly) is needed to do it right? (Because I guess that's the key point. I can PM you if you do not consider proper to share it publicly.)

Not much really everything probably less than 4 k, you can do it yourself and save but I didn't want to do it myself.

 

[Forester]

Not much really everything probably less than 4 k, you can do it yourself and save but I didn't want to do it myself.

Fully understandable. Thanks for sharing...