• Do you seek more privacy, freedom, and security with your banking? If so, you might want to consider opening a foreign bank account. While American laws certainly apply to offshore accounts, and all income must still be reported to the IRS, banking regulations in some overseas countries are more lax than those in the United States. If you seek secrecy, or if you travel often and would like access to a local bank on your journeys, a foreign account may be a good choice for you.

• There are several perks that come from having a foreign account. Some of these are:

1. Convenience while traveling.
2. More privacy than with domestic banks.
3. Possible lower taxation.
4. Fewer regulations, resulting in easier access to deposits
5. Insulation from domestic financial (or political) instability.

• Exercise caution when attempting to open a foreign account, as there can be negative repercussions. Foreign banks have been associated with organized crime. Banks in remote locations may be difficult to access. Also, claims by many offshore banks are often exaggerated, and they may not actually provide the same protection that they advertise.

• Every bank has different policies and regulations. You should do plenty of research before making a final decision on which institution to patronize. Here are some important factors to consider:

1. Banking fees.
2. Currency conversion fees.
3. How well will your money be protected?
4. Foreign and domestic laws.
5. Banking policies.
6. Minimum balance/initial deposit.

• This is certainly easier said than done, and may require a fair amount of work. Every country, and every bank within that country, has different criteria for opening an account. Some may require a lot of documentation and request detailed information about you and your money. There are several methods to go about starting a foreign account.

1. Appear in person.
2. Open an account remotely.
3. Go through a liaison, either a service or a friend who lives in the area.
4. Hire a lawyer.

• Once you have your account, be sure to abide by all U.S. laws. Pay your taxes, and use your account responsibly. You may feel like American laws no longer apply, but you are never immune from prosecution if you abuse the privilege of a foreign account.

• Below are some countries where Americans commonly choose to open accounts. Each has its own unique rules and regulations. If you are considering a foreign bank account, carefully weigh the pros and cons of these nations' banking practices

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• Securing a numbered account will require a trip to Switzerland and a minimum deposit of around $100,000. This is only a viable option for the wealthy. Even with a regular account, which may be opened for far less, hefty fees may apply.

• As previously stated, you must be present to open a numbered account. Other accounts, however, may be opened from your own home via fax, snail mail or sometimes the Internet.

• Banks have sprung up all over island nations such as the Bahamas, Virgin Islands and Cayman Islands. They are now international hot spots for offshore accounts.

• Banks in island nations are often operated with privacy in mind, and your information should be safe from everyone except American authorities. Also, you can expect to earn surprisingly high interest rates. Some banks offer a return of over 10 percent annually.

• There is a good chance that you will be doing business with some shady characters, and your fellow bankers will likely be less-than-upstanding citizens. These nations are favorites of questionable businesses and seedy individuals. Anyone who discovers your banking choice may become suspicious of your legitimacy.

• Each bank will have its own requirements, but be prepared to show plenty of ID, as well as a presentable reason for wanting to open your offshore account. It may be easiest to hire a liaison to help you wade through your numerous options, although they will charge a fee for their services.

• This Chinese territory has long been a financial hub for bankers all over the world.

• It is relatively easy to open an account in Hong Kong. Banks here are well-regulated, and your money should be secure. Some Hong Kong banks offer what are known as "chop accounts." These are similar to Swiss numbered accounts, and attach a unique symbol to the account rather than a name, for extra privacy. No matter what type of account you open, Hong Kong banks will not subject you to capital gains taxes, or investment tax or estate duty. Internet and telephone banking are also available.

• You will have to travel to the bank in order to open a chop account, and you will need to start out with a hefty deposit and pay plenty of fees. No matter what type of account you open, it may be difficult to keep track of both Chinese and American regulations.

• Bank accounts in Hong Kong may be opened in person, over the internet, by fax, or by snail mail.

1. CNNMoney.com's How to Open a Swiss Bank Account
2. Wikipedia's Banking in Switzerland
3. Guide to Cayman Island Banks
4. HSBC Worldwide Assistance