Opening a foreign bank account: what you need to know

Gabriela Peratello

If you’re considering moving overseas to live, work or study — or if you simply want ways to hold your money in different currencies for saving or investments, you may be wondering: can I open a foreign bank account?

Opening a foreign bank account can be handy in several different situations — and depending on exactly what you need an account for, you’ll probably find a foreign bank account product that will suit you if you shop around. This guide covers all you need to know.

If you want a flexible multiple currency account and card, you might like Wise. Wise is a financial technology company and licensed Money Transmitter, which lets you hold 40+ currencies, send payments to 80+ countries, receive money in 9 different currencies with local bank details and spend on your Wise card in 160+ countries.

Learn more about Wise

What is a foreign bank account?

A foreign bank account is a bank account held in any country outside your country of citizenship or residence. Usually this will be used to hold one or more foreign currencies, although some foreign bank accounts can also hold USD.

Foreign bank accounts are also sometimes called offshore bank accounts. All that means is that they’re accounts held in a country other than the one you live in.

How do foreign bank accounts work?

You might need a foreign bank account in a couple of different common scenarios:

  • You’re living overseas, or planning a move abroad, and need a local account wherever you’re headed

  • You want to hold foreign currencies for saving or investment

  • You want to hold money in a range of currencies which you can access easily for day to day spending with a debit card or check

All of these options are possible — so if you’re headed overseas and wondering: can I open a bank account with a foreign passport — you can rest easy.

Generally foreign or offshore bank accounts will split into different account types, depending on customer needs. If you’re a legal resident overseas with a valid visa and local address you’ll usually be able to open the same selection of accounts anyone else would in your new country.

If you’re looking for a non-resident account or offshore account your options may be a little more limited — and often they come with a focus on high wealth individuals looking to hold funds abroad to diversify investments. That can mean high minimum balance requirements or fees — although there are lower cost options out there too, if you shop around.

Can you open a foreign bank account as an American?

US citizens can open foreign bank accounts with no legal barriers. However, banks themselves decide who they’re willing to offer services to — and not all will serve US customers.

This is largely due to reporting standards required of banks working with US persons, such as FATCA¹, which requires banks serving US persons to report foreign currency holding and withhold tax if necessary. Rather than develop the systems to comply with these rules, some banks have pulled out of the market serving US customers.

That said, there are still many banks which do offer foreign bank accounts for US customers. Choose a big global brand like HSBC®² for example, and you’ll be able to instantly see if you’re eligible to open an account as a US person, in the country you want to bank in.

Can you open a foreign bank account online (in another country)?

Generally if you want to open a non-resident account online, you’ll need to pick a specialist product which may not come with all the perks a resident account would.

Many global banks offer specific expat or international services you can access online from a selection of countries, with digital application and onboarding processes. However, as these are often premium services, fees can be high.


Benefits and drawbacks of opening a foreign bank account

✅ Pros❌ Cons
  • Diversify your saving and investment

  • Get easy access to foreign currency holding

  • Many expat and international accounts come with extra perks like wealth advice and personal service

  • Fees and minimum balance amounts can be high

  • You’ll need to thoroughly consider the safety of the bank and location you select

  • There are likely to be tax implications at home and in the country you open an account;

Opening a foreign bank account isn’t right for everyone. If you’re living in another country full time, it’ll probably be necessary to open a foreign bank account — but as long as you have legal residency and all your documents in order, this shouldn’t be too tricky to do.

If you’re looking for a non-resident or offshore account, you may have fewer options, with stricter eligibility requirements. This doesn’t make it impossible to open a foreign bank account by any means — but it does make it important to shop around to find the right one for you.

You’ll also need to make sure you do proper due diligence about the bank’s security and how offshore banking may change your tax obligations.

How to open a foreign bank account: step by step

If you’re opening a foreign bank account as a full time resident in another country, the process of opening an account is likely to be more or less the same as it would be in the US.

Ask local friends for advice and support to complete the application process — particularly if your language skills aren’t up to scratch.

If you’re opening an offshore account — so you’re a resident of the US but opening an account in another country — the process may be a little different. Here’s how you open a foreign bank account step by step:

Step 1. Research thoroughly and choose the bank and account that suits you

Step 2. Check your eligibility and gather the documents you need to apply

Step 3. Head to the bank’s desktop site and select ‘Apply now’

Step 4. You may be able to start your application online and upload images of your documents, or you may need to register and await a call back from the bank to continue

Step 5. You’ll be mailed any paperwork or card once your account is verified and you can start transacting

What documents will you need to open a foreign bank account?

Many of the documents needed to open a foreign bank account will be similar to opening an account in the US.

However, the exact requirements depend on the bank, the country, and your residence situation.

That said, to open a foreign bank account you’ll pretty much always need:

  • Proof of ID — usually your passport
  • Proof of address — often official correspondence or utility bills in your name
  • Tax information

If you’re opening an offshore account from the US, you may also be asked for:

  • Proof of source of funds
  • Proof of income
  • References from your US bank
  • Details about how you’ll use your account

Don’t forget also, documents may need to be translated, verified or notarized, which can push up the costs of applying for your foreign bank account.

Multi-currency made easy: get a Wise Account

Looking for an alternative to banking to keep your money without a minimum balance? Wise has you covered.

The Wise Account lets you:
  • Get local details to receive money in 9 different currencies

  • Spend like a local in over 150 countries with the Wise card

  • Send money across currencies with the mid-market exchange rate

  • Hold and convert money in 40+ currencies

  • Manage your money online with the Wise app or website

  • Opt in to earn APY on your USD balance (subject to change, certain limitations apply — see Program Agreement for more information)

Get a Wise Account
in minutes!

Please see Terms of Use for your region or visit Wise Fees & Pricing for the most up to date pricing and fee information

Foreign bank account fees and costs

The costs of opening and maintaining a foreign bank account can be very different to the costs involved in holding an account with a US bank.

Exactly what you pay will vary a lot depending on the account type and where it’s based. If you choose an expat account, you’ll usually find high minimum balance requirements with significant fall below fees if you fail to meet this requirement.

Higher fees may also apply compared to standard account types.

Make sure you read the fee schedule for any account you’re considering very thoroughly, to avoid surprises later.

Look out in particular for:
  • Maintenance and fall below fees

  • Annual card fees

  • Checking fees

  • ATM withdrawal fees

  • Foreign transaction fees

  • Interest or overdraft charges

  • Wire transfer fees

  • Account close or dormancy fees

Things to consider before opening a foreign bank account

Whether or not a local bank account is right for you depends a lot on your situation and the type of transactions you want to make. Take professional advice if you’re not sure — and in the meantime, here are a few other things to consider.

What are the tax implications of having a foreign bank account?

Holding money offshore in a foreign bank account can mean you have different — and additional — tax obligations, both in the US and in the country the account is based in. It’s important to take professional advice to understand the rules and how they impact you personally.

One important consideration sits around IRS filing requirements. Many people with offshore assets must file a Report of Foreign Bank and Financial Accounts³ (FBAR), detailing their overseas assets.

Some overseas assets may still be taxable in the US. Make sure you’re up to date with your legal and tax duties to avoid issues down the line.

Legal considerations when holding funds offshore

Holding funds in foreign currencies with a bank outside the US is perfectly legal, as long as you’re mindful of tax implications both at home and in the country where the account is based.

However it’s important to know that banking offshore doesn’t mean you can conduct activities that would be deemed illegal in the US — such as evading tax.

Offshore banking has a bad reputation because it’s been used by criminals in the past for money laundering, tax evasion and to fund organized crime — this remains just as illegal offshore as it would be at home, and can lead to criminal proceedings.

How safe is my money in a foreign bank?

Most reputable US banks are FDIC⁴ insured, meaning your deposits are protected to an agreed maximum cap — at the time of writing, 250,000 USD per depositor. This protection is for US banks only, and so does not extend to offshore accounts.

In many jurisdictions there are equivalent programs to the FDIC deposit insurance, but the insured amount can vary widely. Your funds — if protected at all — may not have the same level of cover they would in the US.

It’s important to understand the local banking system wherever you open an offshore account to make sure you understand deposit insurance in the country, and to make sure the bank you select is reputable and trusted.

Are there any risks in opening a foreign bank account?

Aside from the risks of your offshore bank failing — which is an unusual occurrence, luckily — there are other potential challenges with using a foreign bank account.

Potential risks can include large macro economic or political problems — if the economy in the country that your deposit is held collapses, or if there are sweeping political changes which mean laws regarding banking alter, for example.

However, most offshore banking hubs globally are pretty well established and trusted due to their relative stability.

The more common risk is around the unforeseen costs you may run into when using a foreign bank account, such as fees for converting your funds back to dollars, or losses due to fluctuations in the exchange rate when holding your money in a foreign currency.

Make sure you’re clear on all the risks and how they may impact your personal situation before you open a foreign bank account — professional advice can offer peace of mind if you’re unsure if it’s the right thing for you.

Opening a foreign bank account can make it easier to hold and exchange foreign currencies, for day to day spending or to invest and save.

However, foreign and offshore bank accounts can come with very different costs and fees compared to US account options — and they’re not entirely risk free either.

Make sure you’ve thought through all the implications of opening a foreign bank account, and shopped around to find the right one for you, before you get started.

  1. IRS - FATCA
  2. HSBC International
  3. IRS - FBAR
  4. FDIC Deposit insurance

Sources checked on 07.18.2023

This publication is provided for general information purposes only and is not intended to cover every aspect of the topics with which it deals. It is not intended to amount to advice on which you should rely. You must obtain professional or specialist advice before taking, or refraining from, any action on the basis of the content in this publication. The information in this publication does not constitute legal, tax or other professional advice from Wise Payments Limited or its affiliates. Prior results do not guarantee a similar outcome. We make no representations, warranties or guarantees, whether express or implied, that the content in the publication is accurate, complete or up to date.

Money for here, there and everywhere

Find out more

Tips, news and updates for your location