Multi Currency Banking Abroad

by | Mar 10, 2009 | Multi Currency Investing

Multi currency banking abroad grows in difficulty.

A multi currency reader pointed this out  recently when he wrote:

Hi Gary, I was wondering if your portfolio is with Jyske bank.  I have been in contact with them about trying to set up something similar with my account and have been told that they are not able to invest in foreign bonds at this time for US investors.  I enjoy my relationship with them but feel constrained with these restrictions and will likely terminate my account with them.  Any insights you have would be greatly appreciated.  Thanks,

Here was my reply:  I mainly use two bankers abroad, one in London and Jyske and have most of my portfolios with Jyske.   Due to my residence outside the US there are special advantages.  I provide details in my next message.

Here are the details.

First let’s understand why banks abroad are so reluctant to accept small investors.

The global know you client rules are no s strict that my London broker told me that it takes five hours of executive time to open a new account.  With inflation think about what this costs the bank. They have to be able to charge enough to recover this expense plus service the customer.

Second most banks live in fear of US extra territorial jurisdiction.  Once the Feds get on a bank’s (or country’s) case, the cost and difficulty can be immense.

A recent New York Times article (I lost the date and writer) said:

The Swiss government said Sunday it will not attend a U.S. Senate hearing on tax havens — an apparent protest against a U.S. lawsuit aimed at forcing banking giant UBS AG to hand over data on tens of thousands of American customers.

Switzerland declined an invitation to the March 4 hearing by the Permanent Subcommittee on Investigations, Finance Ministry spokesman Roland Meier said.

The Internal Revenue Service is seeking to force UBS to turn over records for an estimated 52,000 U.S. customers who allegedly violated American tax laws by concealing Swiss accounts worth at least $14.8 billion.

The IRS lawsuit filed in Miami came only hours after UBS agreed Wednesday to pay $780 million and disclose up to 300 UBS account holders suspected of tax fraud, in a deal with the U.S. Justice Department.

“Switzerland notes that despite the agreement, U.S. authorities have launched a civil lawsuit against UBS,” Meier said. “Switzerland regrets that the Department of Justice has threatened UBS with unilateral measures, despite cooperation of UBS and Swiss authorities with the U.S. authorities.”

This also reminds us never to hide money abroad… anywhere…. any time.

The are wonderful investing and asset protection benefits from overseas bank accounts but no direct tax benefits.

This potential cost forces banks to shy away from US investors… but this is not unique to just US investors.

There are three problems for all investors who wish to invest globally and hold assets in a country other than where they reside.

The first problem is being a non resident. Many banks outside the US will not accept US investors.  Even those that do have restrictions.

For example at Jyske Global Asset Management, US investors who live within the US cannot buy foreign bonds and we are looking for alternatives.  They have some other restrictions also and cannot buy shares unless they are listed on a US exchange or are registered some way in the US.

However it is becoming increasingly difficult for all investors to bank in other countries.  Many US banks will no longer accept non US clients.

Ecuador banks will not open checking accounts for non Ecuadorian residents, etc.

Second, transferring money is harder. Even if you have a bank account in two countries overseas, and even if you know your bankers well, you will usually have to explain why you are receiving or sending money now.

For example I was buying a condo in Ecuador. I transferred funds (by wire) to pay for the condo. I had to explain to Jyske Bank why I was wiring the funds and had to prove to the Ecuadorian bank that the money came from legitimate sources… whatever that means.

Third, a lot of your simple documentation has to be notarized now. Banks are no longer able to just accept a copy of a drivers license or electric bill to prove residence. They have to see the original or even worse have the original notarized.  For example… recently one bank i used could not find the documentation of a corporate account I had with that bank for more than a decade.   This was their fault.  I certainly had not opened that account without corporate documents.   Now they wanted all the corporate documents…articles of association. minutes etc… legalized as well.   It was easier to just close the account.

However, be careful before you totally shut down all your account. With all the new restrictions, it is very hard to find any bank that will accept any US investors.  I have not been able to find a practical, safe overseas option for US investors so be sure you find an alternative before you switch if you wish to continue banking abroad.

However the frustrations and limitations of banking abroad must now make us ask… is it worth it?

Here are the three benefits of being abroad.   Each person must decide if they are worth the added work.

Overseas accounts can provide privacy, diversification and asset protection. Many people in many countries feel they need this now.

One Canadian subscriber just sent me this note.

Hi Gary, I have been reading your posts for quite some time now & am hoping to fly to Ecuador. I thought you might enjoy my take on the present situation in Canada & my reasons for wanting to get out.

As you may know Canada is touted as one of the best places in the world to live. Certainly the propaganda put out leads people to believe this is the land of opportunity & freedom. The reality though is that we are a Taxed to Death society that pays more taxes per capital than just about any other Western Country. This wouldn’t be so bad if we got good value for our money, Politicians that actually earned their wages, services & security that we pay for & could actually utilize when needed.

Many, many immigrants from developing countries come here with University Degrees, high expectations & the desire to improve their lot in life. Most I’m afraid end up working as Taxi Drivers or at Wal-Mart or other menial jobs that offer very little in wages or job satisfaction. I know of many people from Asian & Middle Eastern countries that give up after a few years because the jobs just aren’t here or they are discriminated against because of their origin. Not a good start for someone who spent 5-7 years at Uni to have a good secure future.

The Canadian Government though makes sure that they profit from this process. Boy, Do they profit! $2000. per person wishing to immigrate here. Multiply that cost x the 200,000 annual applicants & you start to get an idea of why the propaganda is at work here.

Income Tax – Studies have indicated that anyone in Canada that is earning less than $28,000. per year is living at the poverty level. The majority of working people in this country earn around $15. – $18. per hour ( Not including Professionals) So after Taxes & Deductions of around 35% that leaves approximately $23,000.. Already about half the population is living in poverty.

Monthly shelter costs in major cities cost around $1200./mth plus utilities of about $200. Food & necessities for 2 -3 people run about $500. Car Insurance costs $125./mth, Fuel costs about $150./mth. & I haven’t even started on the Provincial fees, taxes & up charges. It seems every time you turn around they have dreamed up yet another fee or tax. – $50. when you buy a new TV, $35. Premium Tax for your Car Insurance.

God Forbid if you have Natural gas to heat your home or Hydro for your lighting. They have dreamed up all kinds of fees for those services. Storage fee, Delivery fee, Transmission fee, system access fee.

Oh & don’t even think about flying out of a Canadian Airport. The fees for that are around $300. per person. Same with buying a new or used car- the Car Dealers like to tack on a Paperwork Fee of $300. When these same fees are paid across the Border in the U.S. their rates of $50, seem like a bargain to us.

Even the price of Gasoline at about 1/3 less than we are paying because of the taxes draws many Canadians over for the day to fill up their tanks.

Medical – Much has been said about how we are so lucky to have a universal health care system. Well to some degree I agree. However having to pay a monthly premium of $100. for my family rate & then having to pay for Chiropractors, Eyeglasses, Dental, Medicines & Xrays & copius amounts of other services that aren’t covered suddenly it makes me wonder why? In case you need to make an appointment with a Doctor be prepared to go to a walk in clinic & never see the same Doctor twice. Doctors with their own practices never take on any new patients. Need to see a specialist? Be prepared to wait at least 6 months. So much for our High Standards.

Politicians – We have this unique system where our politicians are not really accountable to the people they are supposed to be serving. It is a maze of bureaucracy that will daunt anyone that tries to get answers. Yet they still manage to give themselves $100,000 raises! This is not their salary, this is the amount of their raise. Many earn $300,000 per year + benefits & a Pension after 10 years of service for the rest of their life.

Municipal Fees – One of the perks from our Government is that if you are ambitious & start your own Business because you can’t find a job they will at least offer you reasonable deductions from your home as Business expenses BUT! It is a mandatory requirement for anyone having sales of $30,000. per year or more to collect, calculate, remit, pay for processing & mailing fees of our 5% G.S.T. (Federal tax.) Should you start being reasonably successful & busy & need to hire someone to help with the business as an employee you then have to pay income tax for the privilege of having someone collect the G.S.T. on behalf of the Government. This is mandatory. I think another term is slavery. Running my own show is what I did years ago after I discovered just how much we were being milked by the Government. Now running my own show opens up another avenue for Municipal Governments to get on the Gravy Train. Vancouver, BC near where I live is the main commercial center for Businesses on the West Coast. This region consists of about 16 Municipalities each with their own sets of rules & fees. Should you cross the line into an adjoining Municipality for Business purpose they expect a fee usually in the form of a Business License which costs $150. Making a Delivery of Goods? You got it – $150.

If I were to pay for a Business License for each & every line drawn in the sand by some mickey mouse politicians that are trying to jump on the Gravy Train I would be working for no one but the Municipalities.

So much for the land of the Free! I refuse. If nothing else on Principle. Take me to court. Either I have the right to work in this country or I don’t. There isn’t anything that’s free in Canada including taking someone to court which the Municipalities won’t do anymore because they frequently lose. So instead they threaten to ruin my Good Credit rating. Does this sound like extortion? It does to me.

So I have had it!

I’ve sold my Business. I am mortgage free & I am ready to find a new way of living.  If I show up at your door at 10pm. Don’t be alarmed I’m not really crazy – Just a little whacked out at the stupidity of it all.

I am not picking on Canada by the way. I get letters like this from Americans all the time. Plus we have a growing number of  Australians and New Zealanders joining us here.  The pont I am making is that diversification and privacy is in growing demand.

The point is that if you have cncern about the way your nation is evolving , a bot of diversification  is good. Not everyone can pack up and leave but if you feel a system is becoming corrupt, you can at least feel safer knowing you have some funds beyond the systems reach.

You can also gain safety.  Today, banking systems, as well as currencies, everywhere are suspect.

Diversifying into Denmark for example offers added safety.

Excerpts from A Feb. 25, 2009 Times article “Denmark’s Wind of Change”
by Bryan Walsh/ Samso explains why when it says:

If you want to know why Denmark is the world’s leader in wind power, start with a three-hour car trip from the capital Copenhagen — mind the bicyclists — to the small town of Lem on the far west coast of Jutland. You’ll feel it as you cross the 4.2 mile-long (6.8 km) Great Belt Bridge: Denmark’s bountiful wind, so fierce even on a calm summer’s day that it threatens to shove your car into the waves below. But wind itself is only part of the reason. In Lem, workers in factories the size of aircraft hangars build the wind turbines sold by Vestas, the Danish company that has emerged as the industry’s top manufacturer around the globe. The work is both gross and fine; employees weld together massive curved sheets of steel to make central shafts as tall as a 14-story building, and assemble engine housings that hold some 18,000 separate parts. Most impressive are the turbine’s blades, which scoop the wind with each sweeping revolution. As smooth as an Olympic swimsuit and honed to aerodynamic perfection, each blade weighs in at 15,400 lbs. (7,000 kg), and they’re what help make Vestas’ turbines the best in the world. “The blade is where the secret is,” says Erik Therkelsen, a Vestas executive. “If we can make [a turbine], it’s sold.”

But technology, like the wind itself, is just one more part of the reason for Denmark’s dominance. In the end, it happened because Denmark had the political and public will to decide that it wanted to be a leader — and to follow through.

As a result, wind turbines now dot Denmark, the country gets more than 19% of its electricity from the breeze (Spain and Portugal, the next highest countries, get about 10%) and Danish companies control a whopping one-third of the global wind market, earning billions in exports and creating a national champion from scratch.

Plus using an overseas investment bank provides you with services and experience you may not get at home.

For example, we saw in a recent lesson that four currencies with fundamental strength are the Danish kroner,  Canadian dollar, Japanese yen and Swiss franc.  See that lesson here.

Can you local bank invest in these markets?

In some instances the answer is now yes…via exchange traded funds and ADRs (American depository receipts).

So is the privacy.. the asset protection… the added overseas experiecne worth the trouble?

If you are a non American, you can have an advisory or  managed account at Jyske.  There you can invest in just about anything.  Contact Rene Mathys at

If you are an American you can be served by Jyske Global Asset Management (JGAM).

JGAM offers managed and advisory accounts.

If you have a managed account, Jyske can invest in anything for you.  They however have to make the decisions on what is invested.

If you have a managed account your activity is determined by where you live. If you live outside the US, you can invest in most investments.  If you live in the US,  then you are limited to investments that are traded under US regulations.

You can get more information on this from Thomas Fischer at

Until next message good global investing


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May 29-31  JGAM Global Asset Strategy Seminar.  Ecuador Living subscribers can attend this $499 course free. Save $499 or $750.

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June 12-14 Shamanic Mingo Tour
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July 3-6 Ecuador Import Export Expedition
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July 24-26 IBEZ North Carolina

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Oct. 9-11 IBEZ North Carolina

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Nov. 6-8 IBEZ Ecuador
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