In a recent post we wrote about the importance of the Common Reporting Standard (CRS) for Digital Nomads. If you haven’t had a read of that post yet then I recommend you first read it here.
The CRS is a global reporting standard that forces banks and financial institutions to provide tax authorities with information about their customers. The system includes over 100 countries.
CRS has completely changed the lives of Digital Nomads or perpetual travellers who aren’t tax residents anywhere basically, making it near to impossible not to be a tax resident of anywhere.
That’s why we highly recommend you make sure that your offshore strategy is legal and transparent. This means that it might be worth it to establish a tax residence in a country that offers tax residency in exchange for an investment.
However, if you insist on living the perpetual traveller life and refuse to establish tax residency anywhere than there might be another solution for you.
The solution is called “Online Alternative Bank Solution”.
ONLINE ALTERNATIVE BANK SOLUTIONS
Lately, there has been a rising trend of online banking solutions. Most of these online banking solutions are set up as a private company and even though they hold a license as an Electronic Money Institution they don’t have to comply with CRS standards yet.
These alternative online banking solutions are still evaluating the impact of CRS to their businesses and how they should adopt the new requirements. However, at this time they are not reporting any information to tax authorities yet.
Please note that for all of the below-mentioned banking alternative solutions you can receive money from e-commerce payment gateways such as Stripe, PayPal or Amazon.
TransferWise is an online account that lets you send money, get paid, and spend money internationally. With a TransferWise account, you can send money abroad, get paid in other currencies, and spend abroad on the TransferWise debit Mastercard.
It’s free to create an account with TransferWise and your recipients don’t need to use TransferWise for you to send money to them.
TransferWise uses the real mid-market exchange rate (the one you’d find on independent Google).
The most attractive product that TransferWise offers is a Borderless Account.
A Borderless Account is a bit like having local accounts all over the world.
It’s a multi-currency account that lets you keep money in 40+ currencies and convert between them at the real exchange rate whenever you need.
You also get personal account numbers and bank details for GBP, EUR, AUD, NZD, and USD (with more currencies on the way). You can share these details to your friends, companies or customers in order to receive money from around the world.
Sign up with my link and get a free TransferWise card for awesome exchange rates abroad.
Revolut offers a range of digital banking services in a mobile app which include transferring money abroad in 29 currencies, a pre-paid debit card that enables cash machine withdrawals in 120 countries, a crypto-currency exchange allowing users to convert currencies into cryptocurrencies, Vaults for budgeting and saving money, mobile phone and overseas medical insurance.
With the standard package users get a free euro IBAN account or wherever they would like to have an account. Revolut is currently available in Europe, Australia, Canada, Singapore, Switzerland and the United States. But the firm has plans to expand worldwide soon.
The coolest feature about Revolut is that they truly support that traveller lifestyle. Revolut currently charges no fees for the majority of its services.
They don’t believe in financial borders, so they let you spend abroad in over 150 currencies with the interbank exchange rate, with a small 0.5% fee for anything above £5,000 each month and a flat mark-up on weekends on certain currencies.
Revolut also gives you £200 a month in international ATM withdrawals for free in 29 currencies.
And lastly, Revolut offers a travel insurance from as little as £1.00 per day to cover you and the things you love worldwide.
Sign up with my link and get a free Revolut card for awesome exchange rates abroad.
Send is particularly interesting for people who are both sending and receiving AUD into and out of Australia.
Send assists their clients to save money when:
- Transferring money between international bank accounts
- Relocating and migrating overseas
- Buying or selling real estate
- Paying foreign currency invoices
- Transfer of an inheritance or estate
Send will provide you with better exchange rates than the banks, quicker transfer times, fee-free transactions and a dedicated account manager.
Every transaction you make with Send is fee-free, so it doesn’t cost you anything to transfer money internationally with them.
Their strength is their customer service support system as they can add massive value around the timing of the transfer by assisting to achieve the best exchange rate. They monitor the markets, and will be proactive in calling clients to advise of a spike in their favour to take advantage of higher exchange rates.
They will also keep clients fully informed if rates are moving against them, and have the potential to fall further, and try and manage their risk to avoid large losses. They even go as far as holding the rate for clients.
Send is planning on releasing their Send Visa Card soon which will come with lots of rewards opportunities for its members.
Sign up with my link and get a free Send account for awesome exchange rates to and from Australia.
PayPal has been around for more than a decade and is mostly known for its payment processing capacity. Paypal allows buyers to send money to sellers virtually. It is a safe tool and widely accepted when paying for items online.
When you create a PayPal account you are able to:
- Transfer money from your bank account to your PayPal account
- Get a cash advance from your credit card and deposit the amount in your PayPal account
- Transfer money from your own PayPal account to another member’s PayPal account
- Transfer money from your PayPal account to your checking or savings account
- Have a check mailed to you for the balance of your PayPal account
- Get a PayPal debit card that you can use to make real-world purchases from your PayPal account
Sign up for free with PayPal.
Stripe is PayPal’s biggest competitor and many people swear that Stripe has much better fees than PayPal, meaning you’ll potentially save a lot of money.
Stripe is a payment processor which supports the electronic transfer of money from a customer’s bank into a merchant’s bank as payment for goods or services bought with a credit card.
You can create multiple Stripe accounts for your products or businesses. Each account has its own payments, dashboard, and authorized users. Stripe also converts the money into your account’s currency when you collect payments in other currencies. You can also transfer the money from your Stripe account to your bank.
Sign up for free with Stripe.
Holvi is a digital current account with a complete set of tools to manage your business easily. Holvi is built specifically for entrepreneurs and freelancers. They operate in Finland, Austria and Germany and in Estonia through its e-Residency program worldwide.
To put it simply, if you own an Estonian company (which many Digital Nomads do) then you don’t have to travel to Estonia to set up a physical bank account but you can manage your business bank account through Holvi which functions as an alternative business bank solution.
Holvi also offers a Business Mastercard and a bookkeeping and expenses management tool on their platform. Their package offerings start from €0 and go up to €98/month.
Sign up here with Holvi.
Neat is an online service that serves as an alternative to a traditional corporate bank account. Neat’s Business service lets companies register for a Hong Kong bank account without needing to go to a physical branch and thus avoiding the high deposit fees that are usually linked to setting up a physical Hong Kong business bank account.
The most important features of Neat Business are:
- Fully online account opening, from anywhere in the world
- Dedicated payment instructions in HKD, EUR & GBP to receive payments from customers around the world without hidden fees, as well as disbursements from e-commerce platforms (we support Stripe, PayPal, Amazon and more).
- Transfer money to bank accounts from your Neat Business account
- Corporate MasterCards for you and your team
Neat has also the option to open up a personal account with the ability to spend online or offline around the world. This personal account may also serve you very well if you need to get paid by an employer, clients or friends around the world.
Sign up here with Neat.
We hope you have enjoyed this article. If you have any further questions please leave us a message below and we’ll get back to you as soon as we can.
NOTICE: The content of this article is not to be considered as a legal opinion or tax advice. Wanderers Wealth does not hold itself out as a legal or tax advisor. If you want to receive a legal opinion or tax advice on the matter in this article please contact us directly and we will refer you to a legal practitioner.