Opening a Foreign Bank Account for Your Company

Most national governments allow their citizens to open bank accounts in foreign countries. The permission is advantageous indeed, because you can expand your business to foreign lands or relocate your company to a foreign country.

At the same time, opening a foreign bank account can be a challenging task. Many banks are reluctant to set up accounts for non-residents of the country. This sad fact is not attributable to lack of desire to take new clients onboard on the part of the banks. Rather, it is attributable to tough requirements on the part of the national regulating authorities. 

Nevertheless, setting up a foreign bank account for your company is still possible. We are going to assume that you have already registered a company in a foreign country and discuss the steps that you have to take in order to open a corporate bank account there.

Why would you need a foreign bank account for your company?

A corporate bank account in a foreign country allows engaging in various business operations in that country and in the rest of the world. A foreign bank account can be an especially handy instrument in the following cases:

• Your business is scaling up and going global, which requires new financial solutions;

• Your business partners and suppliers are in a foreign country and a bank account in that country would be the only payment instrument available to you;

• Your company is engaged in investment activities on the global scale;

• You want to keep your financial information confidential while it is hardly possible to do so at home;

• Your potential business partners would not cooperate with a bank located in your home country.

The problem is, however, that many banks are tightening the screws and making it difficult for foreigners to set up accounts with them.

Preferences that foreign banks have

You stand a better chance to open a foreign bank account if you can demonstrate the qualities that we describe below.

1.  The money that you are planning to put into your bank account has to come from legal sources and you have to be able to prove that. Please read more about the capital legality issue at the International Wealth web portal.

2.      Banks prefer companies that have economic substance in the country where the banks are located.

3.      Banks in some jurisdictions are cautious about offering services to offshore-registered companies. Shell companies are also not welcome.

4.  Banks prefer ‘transparent’ clients. Bank managers have to be able to understand the company’s business model: it has to be clear for them who the company UBOs are, where the money comes from, where it goes, and so on.

5.  Banks prefer a company with a history of operations. A startup may have a lot of trouble trying to open a foreign bank account. Startups are often qualified as high-risk companies and the same goes for crypto, gambling, Forex, and some other types of companies.

6.  Banks are restricted by international sanctions. If one of the company owners comes from a sanctioned country, or if he/ she is on the list of sanctioned individuals, chances for opening a foreign bank account for the company are slim.

Requirements to meet when setting up a foreign bank account

You have to submit a package of application documents in any case. The list of documents can be longer or shorter. You have to inquire about the application documents with each particular bank that you are considering. Personal presence of an authorized individual is required to open a corporate bank account in a foreign country even though there may be exceptions from this rule.

The procedure of opening a corporate bank account in a foreign country

You have to take the following steps to set up a foreign bank account for your company:

1. Choose the bank that works with non-residents.

2. Collect the application document package.

3. Fill out the application form.

4. Apply for banking services.

5. Wait for an answer from the bank.

Application processing can take a few days or it can take a few months. Even though several months have passed since you filed an application, there is no guarantee that the bank will agree to provide services to you. If your application is approved, you will gain access to your corporate bank account.

A blunder in the application documents can be the reason for service denial. Mistakes can be corrected, however, so you can try applying again. At the same time, if you supply false information about the origins of the capital, the company UBOs, or its counteragents, banking services will be denied to you in all likelihood. And this cannot be corrected.

What is due diligence and KYC procedures?

Today, every bank has a Compliance Department that performs the following tasks:

1. Scrutinizes the application documents that a potential customer has submitted. If the Compliance officer sees that some information is missing, he/ she may request additional information.

2. Collects the information about the applicant from external sources available to the bank.

The goal of the bank’s Compliance Department is to combat legalizing money obtained from criminal sources.

Where could you open a foreign bank account?

If you want to set up a corporate bank account in a foreign country, you have a wide choice of options.

European banks

European banks boast the following characteristics:

• Work with all major currencies, open multicurrency accounts, and issue bank cards;

• Take offshore-registered companies onboard;

• Do not practice currency control;

• Give account holders 24/7 access to their accounts;

• Offer remote account management opportunities;

• Use the SEPA transaction system and open IBAN accounts.

Banks in Cyprus and Malta (both EU member states) are especially loyal to non-resident clients. British banks, on the contrary, make it difficult for foreigners to open accounts with them. At the same time, there are electronic payment systems in Great Britain that welcome foreign customers.

Asian banks

Some banks in Hong Kong provide services to non-resident customers. If you would like to have a corporate bank account in Hong Kong, your company has to have an office in the jurisdiction. Personal presence is required.

A larger number of Singaporean banks will work with foreign customers. A bank account in Singapore would let you make transactions with the USA, China, Europe, and other parts of the world. A company office in Singapore is required to set up a corporate bank account there.

Banks in the UAE

The banking system is well-developed in the United Arab Emirates. An additional reason to open a bank account in the UAE is enhanced confidentiality of the account holders’ information.

Offshore banks

You could also consider the opportunity to open a corporate bank account in such jurisdictions as Belize, Grenada, St Lucia, Mauritius, Seychelles, and other offshores. Today, all offshore jurisdictions require that the company have economic substance on their territories. In some instances, the requirements are not too tough.

To conclude, opening a corporate bank account in a foreign country is possible even though the task can be rather challenging.