Moving money out of spain

foxyruby

Dear Moneysavers

Can any of you offer me some advice? I have a couple of Spanish friends who are really worried about the economic situation in Spain. They want to transfer some of their savings to a UK bank that is covered by the £85,000 compensation scheme. They don't want to dodge tax, they're happy to declare what they have, they've just lost trust in the Spanish banks (not that many of ours have a great reputation at the mo! But at least we have a compensation scheme

My local branch of the Co-op said that non-UK residents can't open a savings account here. They gave me the number of their Guernsey offshore office, but the woman I spoke to in Guernsey - who works in the account opening department - said they can't open an account there either. They did say that my friends could open a joint account here with a UK national, such as me. Although we're great friends, I wouldn't want to take on that responsibility, and in any case I'm sure it would affect my tax position. So do any of you know what else they could do? I've thought about maybe opening a UK company but wouldn't that be expensive in terms of filing fees and other charges each year?

This also made me wonder what all we Brits could do if we got really worried about our UK banks. Are we the only country to stop foreign nationals from opening savings accounts on our shores? What if we wanted to move some of our savings out of the UK and into a foreign bank where we're not resident. Has anyone done this? If we're happy to declare it for tax and can prove where it came from, what's the problem?

Anyway, any advice you can give me would be greatly appreciated.

SliAbhaile

They're only thinking of moving their money now?

Porcupine

UK banks aren't alone in making it difficult for non-residents to open accounts - many other EU countries are similar. There's no particular reason for this - there's no ban or anything - it's just that non-residents present more hassle and banks don't see a market in it (ie can't be bothered). Those countries with an expat community sometimes do though.

They don't happen to have any UK account at the moment? Generally, if you've opened a UK account and gone abroad you can keep it, and possibly open new accounts at that bank. So something to be said for opening accounts everywhere before you go abroad.

Personally I have an account at KeyTrade Belgium that was easy to open as a non-resident. Many Irish banks are friendly to non-residents (though Ireland isn't any better than Spain at the moment). There's an account in Germany mentioned in this thread. Some French banks are friendly to expats too, but often you have to visit in person to discuss it.

All of these are under the EU's EUR100,000 protection scheme. Guernsey, Jersey, Isle of Man are not - they have their own weaker schemes. Switzerland is also non-EU but seen by many as a safe haven - non-resident accounts exist but I don't know how many hoops need to be jumped through (that there are websites offering to do it for a fee suggests there might be).

Don't forget the currency risk of changing euros in pounds or another currency!

gagahouse

Porcupine wrote: »

UK banks aren't alone in making it difficult for non-residents to open accounts - many other EU countries are similar. There's no particular reason for this - there's no ban or anything - it's just that non-residents present more hassle and banks don't see a market in it (ie can't be bothered). Those countries with an expat community sometimes do though.

They don't happen to have any UK account at the moment? Generally, if you've opened a UK account and gone abroad you can keep it, and possibly open new accounts at that bank. So something to be said for opening accounts everywhere before you go abroad.

Personally I have an account at KeyTrade Belgium that was easy to open as a non-resident. Many Irish banks are friendly to non-residents (though Ireland isn't any better than Spain at the moment). There's an account in Germany mentioned in this thread. Some French banks are friendly to expats too, but often you have to visit in person to discuss it.

All of these are under the EU's EUR100,000 protection scheme. Guernsey, Jersey, Isle of Man are not - they have their own weaker schemes. Switzerland is also non-EU but seen by many as a safe haven - non-resident accounts exist but I don't know how many hoops need to be jumped through (that there are websites offering to do it for a fee suggests there might be).

Don't forget the currency risk of changing euros in pounds or another currency!

Switzerland is a realistic option for them - not too many hoops to jump through, you just have to turn up in person with ID to open the account and transfer the money. The address the bank uses for correspondence can be their Spanish home address no problem.

Depositor insurance is up to 100K CHF and you can open multiple currency accounts. They do not pay interest on USD or GBP accounts but will on CHF and Euro. Having a bank account is not free though, typically they will pay around 100-200 CHF a year to run the account. Interest rates are very low as well, you park your money in Switzerland if you are seeking safety, not yield.

I would recommend though that they avoid UBS or CS and go for either the Cantonal banks or state institutions like Postfinance, they're much safer.

gkerr4

why do they think that the british taxpayer should protect them?

I'm glad they can't.

joonwatch

try romania

missile

The level of guarantee offered to protect spanish bank account holders is higher than offered to UK bank account holders.

" The monetary amount guaranteed is limited up to a maximum of 100,000 Euros per depositor in each credit institution.

When an account has more than one holder, the sum shall be divided between the holders according to the terms of the contract of deposit, or in equal parts otherwise. Each holder is guaranteed up to the maximum limit."

http://www.fgd.es/en/info_regulacion_dinero1.html

In these troubled times it might be reasonable to ask what might happen if Spain went broke, i.e. would ECB honour the guarantee? One could ask what might happen if UK went broke.

Your friends could open a foreign currency account in spain with one of the international banks, e.g. Barclays.es

Foreign Currency Accounts

If you would rather have your current account in US Dollars, Japanese Yen, Pounds Sterling or any other major currency different from the Euro, you may apply for a Foreign Currency Account, which offers you the following advantages:

missile

They gave me the number of their Guernsey offshore office, but the woman I spoke to in Guernsey - who works in the account opening department - said they can't open an account there either.

I find that very strange. This is a quote from Coop Offshore Banking website

For customers living outside Guernsey, a letter from a director or officer of a reputable overseas employer which confirms residence at a stated overseas address

Offshore accounts are not exclusive to those with UK address. There are many other banks who would welcome the business. Your friends can open an account by phone or online. They will need to provide an address in Spain and satisfy money laundering regulations. See here

http://www.lloydstsb-offshore.com/

The benefits of offshore banking with Barclays

At Barclays, we understand that there may be a number of reasons why you might consider banking offshore.

• You may have distinct financial needs that your local bank may not be able to meet
• You might live in a country facing economic or political uncertainty or instability
• You’re interested in taking advantage of potential financial planning opportunities

Whatever your reasons, our offshore banking products and services are designed to help you manage, protect and grow your wealth. And by choosing Barclays, you’ll benefit from the expertise that we've gained from many years of meeting the offshore banking needs of clients around the world.

missile

They did say that my friends could open a joint account here with a UK national, such as me.

I would advise you against letting friends use your UK address.

noh

missile wrote: »

The level of guarantee offered to protect spanish bank account holders is higher than offered to UK bank account holders.................

No the guarantee is lower in the Eurozone because of the current exchange rate.

100,000 Euros is around £78000 at todays rate.
The UK guaranteed level is £85000 (around 109000 Euro).

http://uk.finance.yahoo.com/currencies/converter/#from=GBP;to=EUR;amt=85000

antrobus

For Spanish residents seeking somewhere else to park their hard earned Euros I'd have thought that Gibraltar was the obvious choice.