Offshore vs. Offshore-Offshore Banking

Offshore and offshore-offshore banking sound similar, but according to Stefan Neuss, founder of WERA Capital Partners, they are very different. He explains the history and the main differences.

From the 1950s, the City of London built what Neuss calls a "second British Empire": a network of offshore financial centres in places such as Bermuda, the British Virgin Islands, the Cayman Islands, Gibraltar, the Turks and Caicos Islands and, until 1997, Hong Kong. The system became extremely powerful. Neuss estimates that around 40 per cent of global lending has come from these centres.

The turning point came in 2016 with the Panama Papers. Afterwards, the offshore territories were pressured to give up banking secrecy. Offshore companies are still perfectly legal today. But, Neuss explains, when their owners bank with local offshore banks, transaction details are shared with the local central bank and other authorities. Many processes are also handled by automated systems.

Offshore-offshore banking is available in fewer than a handful of jurisdictions. According to Neuss, there is no data exchange agreement in these places, so account activity remains private. Combined with an offshore company, he calls it "a match made in heaven".

He also points to the style of service. Offshore-offshore banking works like traditional German or Swiss private banking: transactions are handled by people, not by automated bots.

This kind of banking is by invitation only, and clients must qualify and be accepted. They also remain responsible for the tax and reporting rules of their home country. WERA Capital Partners offers six to nine-figure business owners a 1h private conversation over zoom to explore whether it could benefit their business.