Private bank requesting tax residence certificate

[Sols]

But isn't it bank's task to prove in court I am not genuine resident in Bahrain (in case they decided to put limits)?

No, it's up to the bank to be able to prove to a regulator that they have taken all reasonable steps to understand where you are resident. If they can't prove that, the bank risks fines far exceeding the revenue they earn from you.

While for CRS I have provided Bahraini residence visa / ID card / Utility bills, don't you think a that point I shall have effective position to oppose bank in court and unfreeze and, later, close the account?

Maybe, but I'm glad it's not me trying to take a bank to court over KYC. You might win such a case, but the court would be likely to side with the bank and its rights and obligations to obtain satisfactory proof that you are tax resident where you claim to be.

Look at it from the bank's perspective. If a request for TRC or equivalent is triggered, that's for a reason defined in the bank's policies and procedures. They aren't going to back down until they have it. If the account holder starts refusing, a simple routine check has turned into a suspicious activity. A genuine full-time resident in Bahrain should have no problem obtaining a COR. A genuine tax resident in UAE should have no problem obtaining a TRC. Their other clients resident in UAE and Bahrain are able to produce those documents.

But it may never come to it. Your residence may end up never being questioned.

 

[hortm]

No, it's up to the bank to be able to prove to a regulator that they have taken all reasonable steps to understand where you are resident. If they can't prove that, the bank risks fines far exceeding the revenue they earn from you.


Maybe, but I'm glad it's not me trying to take a bank to court over KYC. You might win such a case, but the court would be likely to side with the bank and its rights and obligations to obtain satisfactory proof that you are tax resident where you claim to be.

Look at it from the bank's perspective. If a request for TRC or equivalent is triggered, that's for a reason defined in the bank's policies and procedures. They aren't going to back down until they have it. If the account holder starts refusing, a simple routine check has turned into a suspicious activity. A genuine full-time resident in Bahrain should have no problem obtaining a COR. A genuine tax resident in UAE should have no problem obtaining a TRC. Their other clients resident in UAE and Bahrain are able to produce those documents.

But it may never come to it. Your residence may end up never being questioned.

What if one spends about 100 days / year in Bahrain and, therefore, can not get COR and he did not spend more time at any other country. He has - plane tickets, title deed, utility bills with usage, card statement... Don't you think it is ok for bank's compliance/crs to proceed without COR?

 

[meze99]

Have you considered obtaining Monaco residence and banking there and in Switzerland if you think UAE banks are not good/safe enough?
Also citizenship by investment maybe an option, but then you are stuck with Caribbean banks

 

[Sols]

What if one spends about 100 days / year in Bahrain and, therefore, can not get COR and he did not spend more time at any other country. He has - plane tickets, title deed, utility bills with usage, card statement... Don't you think it is ok for bank's compliance/crs to proceed without COR?

You're essentially just asking the same question over and over with slightly different wording. But the root is the same: you don't meet the normal standards of tax residence, so things will be complicated for you. Absent specific ruling (like Bahrain lacking personal tax residence rules), a prudent bank will look to the strictest international standards which are typically 183 days of residence per year.

What it comes down to is that if a bank asks for COR and you an't provide COR equivalent proof that you spend 183 days the previous year in Bahrain, the bank will likely not accept your hotchpotch of documents. Bank compliance departments need things that fit into their forms and procedures. You have to be a very valuable, important client to the bank for them to bother going through your travel itinerary and match that against tax residence rules of your destinations, to make sure you (probably) didn't accidentally become tax resident somewhere else.

 

[Mike Forman]

But isn't it bank's task to prove in court I am not genuine resident in Bahrain (in case they decided to put limits)? While for CRS I have provided Bahraini residence visa / ID card / Utility bills, don't you think a that point I shall have effective position to oppose bank in court and unfreeze and, later, close the account?


Did UAE provided info asked in those letters?

This seems to be a never ending discussion and the questions asked can and will never have a one fit all answer. It is also a bit too simplified assuming that a bank needs to provide proof you don't reside in a country.

Each bank has their own KYC and risk assement procedure, not because they want to but because they are regulated and have to. Once something looks to risky beyond their appetite they have the right t question you and ask any proof they deem necessary. Sometimes just showing your residence card is sufficient, others want to see a utility bill and/or rental contract.

Banks don't need to prove anything and it's at their discretion to open or close an account. Sure you can try to sue them, a legal battle for years you will lose anyway.

Take one step back away and use some common sense. What is the meaning of a resident? You reside in that country and have ties to this country. Only a paper document and local TIN can suffice to open an account, but as mentioned by others if your country of residence is known for offering residence documents without the need of living there banks can and will question that. Dubai is on the black list.

Just try to get your certificate, if you want to increase your chances (and money) you can hire a lawyer who claims he can. Highlikely you won't get and it and if you do it will be valid for 6 months. A bank may request some new KYC proof and at that time perhaps you can't obtain this certificate.

Anyway I personally have never encountered any bank requesting such a document. A residence proof (card, visa,..), utility bill and / or rental contract with a local TIN number should be sufficient for a bank.

For claiming tax residence with tax authorities that want to challenge you, you will need to provide much more and show you actually lived there over 180 days

 

[hortm]

No, it's up to the bank to be able to prove to a regulator that they have taken all reasonable steps to understand where you are resident. If they can't prove that, the bank risks fines far exceeding the revenue they earn from you.


Maybe, but I'm glad it's not me trying to take a bank to court over KYC. You might win such a case, but the court would be likely to side with the bank and its rights and obligations to obtain satisfactory proof that you are tax resident where you claim to be.

Look at it from the bank's perspective. If a request for TRC or equivalent is triggered, that's for a reason defined in the bank's policies and procedures. They aren't going to back down until they have it. If the account holder starts refusing, a simple routine check has turned into a suspicious activity. A genuine full-time resident in Bahrain should have no problem obtaining a COR. A genuine tax resident in UAE should have no problem obtaining a TRC. Their other clients resident in UAE and Bahrain are able to produce those documents.

But it may never come to it. Your residence may end up never being questioned.

Thanks.

If it does not matter in terms of lifestyle where you think it is safer to be tax resident (spend 90-100 days year) in UAE or Bahrain? (For UBO of bank accounts in Switzerland, Cayman, Bahamas, US). Do I understand correctly that Bahrain is better because UAE may fall from gray list to blacklist at FATF and then such UBO may expect freezes at banks?

As for current black list with EU & Gray list at FATF I am not concerned because it was same in about 2017 and those banks accounts were totally fine with UBO's residence in UAE.

 

[Sols]

If it does not matter in terms of lifestyle where you think it is safer to be tax resident (spend 90-100 days year) in UAE or Bahrain?

Safer in what sense? Safe from what exactly?

Do I understand correctly that Bahrain is better because UAE may fall from gray list to blacklist at FATF and then such UBO may expect freezes at banks?

It's not clear whether Bahrain has avoided the same kind of gray listings as UAE because Bahrain is fundamentally better at AML/CFT compliance or if it's simply not been looked into yet due to being smaller and less important than UAE. You don't see Bahrain promoting itself or being promoted the same way as UAE.

As for current black list with EU & Gray list at FATF I am not concerned because it was same in about 2017 and those banks accounts were totally fine with UBO's residence in UAE.

It depends on how you use the account. Gray lists of 2017 are different from gray lists of 2023. Expect things to be stricter this time. That doesn't mean account closure or frozen funds, but rather more questions asked about transactions.

 

[hortm]

In term

Safer in what sense? Safe from what exactly?


It's not clear whether Bahrain has avoided the same kind of gray listings as UAE because Bahrain is fundamentally better at AML/CFT compliance or if it's simply not been looked into yet due to being smaller and less important than UAE. You don't see Bahrain promoting itself or being promoted the same way as UAE.


It depends on how you use the account. Gray lists of 2017 are different from gray lists of 2023. Expect things to be stricter this time. That doesn't mean account closure or frozen funds, but rather more questions asked about transactions.

Safer in terms of triggering unnecessary compliance or straightforward account freeze (Passive NFFE entity in my case - almost no transfers. And no transfers to UAE at all now).

 

[Sols]

Safer in terms of triggering unnecessary compliance or straightforward account freeze (Passive NFFE entity in my case - almost no transfers. And no transfers to UAE at all now).

All in all and looking at it long-term, no meaningful difference. UAE is more familiar but currently considered high risk due to the various gray lists. Bahrain is unfamiliar. This puts them on roughly equal grounds.

 

[jafo]

In term

Safer in terms of triggering unnecessary compliance or straightforward account freeze (Passive NFFE entity in my case - almost no transfers. And no transfers to UAE at all now).

Did you ever solve this? Any updates?

 

[hortm]

Did you ever solve this? Any updates?

seems Bahrain is ok. just procedures are not streamlined.

 

[bonox]

Well Switzerland, Germany, Gibraltar banks all ask for the tax resident certificate if you are a non EU citizen.

 

[hortm]

Well Switzerland, Germany, Gibraltar banks all ask for the tax resident certificate if you are a non EU citizen.

Switzerland is not asking for sure.

 

[uranium]

Switzerland is not asking for sure.

Anyone else can confirm this ?

 

[hortm]

Anyone else can confirm this ?

clarification.
maybe retail banks do. private - don't.