Citizens of most countries are allowed to open foreign bank accounts but the task can be rather challenging. Every foreign country will have its own requirements for non-resident bank customers as every foreign bank will have its own procedures of setting up accounts for foreign clients. Below we discuss the stages in the process of opening a corporate bank account in a foreign country and make some suggestions along the way.
Who needs a foreign bank account?
You definitely need a foreign bank account if you perform business operations abroad and/ or you have a company registered in a foreign country. However, a corporate bank account in a foreign country can also serve as a powerful instrument of asset protection. If your assets are written in the name of your foreign company and the company has a bank account outside your home country, your assets will be much safer.
Besides, you can open a merchant account in a foreign bank, which will allow you to engage in an Internet business making and receiving payments online. In addition, you can find a bank in a foreign country that pays a higher interest on fixed-term deposits than your home country’s banks do. If you opt to set up a bank account in a Western European country, you should realize that ‘banking privacy’ is not a senseless phrase in that part of the world: European bankers will protect your personal information from any unauthorized third parties.
Stages in the process of opening a corporate bank account in a foreign country
The process is complicated indeed, especially in view of the latest changes that have been taking place in the banking industry recently. You will need professional assistance in the endeavor in any case. You can request it if you visit the International Wealth web portal that belongs to Offshore Pro Group.
Please note that your home country’s legislation may make it mandatory for you to report opening a foreign bank account.
Stage 1: Choose the country
The choice of country will depend on what major goals you pursue when opening a foreign bank account. You have to realize that every country will have its advantages and disadvantages as far as banking there is concerned. For instance, Western European banks are prestigious but many of them will be reluctant to take non-resident clients on board. Banks in Baltic countries (Latvia, Lithuania, and Estonia) are more open to foreign customers but they are not so prestigious.
Banks in Georgia (one more former Soviet Republic) pay interests at high rates but the national currency exchange rate can be rather unstable. Banks in Singapore and Hong Kong will be happy to take foreign clients onboard but only if they perform some business operations in Southeast Asia. Besides, they will happily process your payments but they will be reluctant to accept a deposit from you unless it is extremely large. Switzerland is the number one banking jurisdiction but most banks in the country will want you to leave a large security deposit (there are exceptions, however).
In any case, you have to assess the overall political and economic situation in the foreign country that you are considering for banking. Naturally, the more stable the situation is, the better.
Stage 2: Register or purchase a foreign company
To be able to set up a corporate bank account abroad, you have to have a corporation – a company registered in a foreign country. An offshore-registered company can be used for active business operations as well as for holding your foreign assets. In some jurisdictions, you can still buy a shelf company even though the number of such jurisdictions is growing smaller.
Anyway, it does not have to be a blacklisted jurisdiction: you can buy a shelf company in Hong Kong, for example. What makes this option attractive is that the company is going to cost you a couple thousand dollars only and you can become a foreign company owner within one or two days.
Another thing that you can do is register a new LLC in an offshore jurisdiction. This option is especially worth considering if you are planning to engage in active business operations abroad. Your foreign company will be covered by the laws of the jurisdiction where it is domiciled and offshore countries try to protect company owners very well. Why would foreigners register offshore companies otherwise?
Stage 3: Choose the bank
We would like to draw your attention to Baltic banks. They may not be considered the top banks of the world but:
- they welcome foreign customers,
- their services are less expensive than the services of the banks in Western Europe,
- they welcome foreign customers,
- the quality of their services has become sufficiently high.
Banking in Switzerland is also an attractive opportunity but you have to have at least a million dollars/euros/Swiss francs to put in a Swiss bank. If you have 10 million, you will have a much wider choice of financial institutions in Switzerland.
There are other countries in Europe that are good for banking such as Austria, Germany, Denmark or the Netherlands. Besides, you can bank in offshore jurisdictions such as Nevis or Mauritius, for example.
Stage 4: Apply for bank account opening
You have to submit a set of application documents if you want to open a corporate bank account in a foreign country. Please note that many banks will want to know as much as they can about the company’s beneficial owners, its directors, and the account signers. The standard application document set has to contain the following documents:
- Completed and signed application form for account opening.
- Notarized passport copy.
- Original or certified copy of a utility bill or bank statement (as proof of current residential address, not more than three months old).
- Original or certified copy of a letter of recommendation from the bank where you already have an account.
- Personal resume. This document should describe your work experience, qualifications, education, and current position
- A complete apostilled package of corporate documents:
- Certificate of Incorporation;
- List of company directors and shareholders;
- Share certificates
- Copy of the Declaration of Trust from nominee shareholders;
- Information on beneficial company owners;
- Certificate of Good Standing (if the company has been in existence for 12 months or more).
Normally, a company representative has to pay a personal visit to the bank head office to set up a corporate account there. However, some financial institutions are prepared to meet non-resident clients halfway: you may have to visit a representative office of the bank located in proximity to you.
The timeframes of application processing can vary depending on the country and the particular bank. Sometimes it takes a day or two while at other times, you’ll have to wait for a month or even a few months. The general tendency is quite clear: now banks take a longer time to process applications for services than they used to do before.
Non-resident banking opportunities exist but making use of them has become a challenging task. With professional assistance, however, you can open a corporate account in a foreign country.