How to open a foreign account?
How to open a foreign account?
Any company planning to expand outside one country requires an open foreign account. It is necessary for convenient settlement of accounts with partners, accumulation of funds, payment of taxes, salaries and other payments. Let’s consider in the article, how to open an account in a foreign bank , what is needed for this and what problems you may encounter.
Why does a legal entity need a foreign account
There are many reasons why you may need a bank account in another country, but the main ones are:
- Entering a new market where a separate account is required for settlements with suppliers and customers.
- Diversification of risks by keeping money in foreign currency deposits.
- Gaining access to investment sites.
- Desire to work with a foreign organization that is not ready to cooperate directly with Russian banks and asks to open an account in a more familiar jurisdiction.
Regardless of the goals and reasons for registering a new account, you must understand the essence of the procedure. Next, we will analyze in detail how to quickly and easily open an account abroad.
Selecting an institution to open an account
The account registration process should start with the selection of a country and a specific financial institution. In this matter, first of all, you need to be guided by personal goals and interests.
If you plan to enter the market of a specific region, then it is logical and advisable to register a bank account there.
In the case of a legal entity carrying out a specific activity (for example, investing), it is important to first make sure that the chosen institution is ready for cooperation. For example, in a number of countries, some banks have a negative attitude towards income related to cryptocurrency.
Also, one should not forget about additional services and service tariffs, however, these factors are already of secondary importance.
It can be difficult to figure out all the features on your own and choose the right country and institution. Lawrange has extensive experience in this matter and is ready to help with the selection and registration of a bank account abroad.
Basic requirements for opening an account with foreign banks
Intending to become a client of a foreign bank, you need to understand that not all of them are ready to cooperate with non-residents. A relatively small number of institutions provide services to foreign companies. At the same time, they pay great attention to the verification of documents and compliance with various requirements. There is no shortage of clients among banks, therefore, at the slightest suspicion, it is easier for them to refuse a risky applicant.
If ordinary foreign citizens – individuals are checked only by a small number of factors, then it is much more difficult for organizations with this.
Banks require information on the purposes of registration, study information about both the company itself and its management, look at business partners and look for unfavorable connections.
The key factor is the bank’s clarity of the activities carried out by the legal entity, as well as its legality in accordance with local legal regulations.
Each bank has its own requirements, therefore it is important to study them before applying and after that make a decision on the expediency of filing an application.
The opening process depends on the chosen country, bank and the specifics of the company’s business. However, in general terms, the entire procedure can be represented as follows:
- Selection of a financial institution suitable for the terms of service and tariffs.
- Preparing the necessary documents.
- Filling out bank forms according to the established template and providing a ready-made package of documents.
- Client identification.
- Waiting for a decision to open an account and performing additional actions at the request of the bank.
- Completion of registration.
Failure to comply with the basic rules and requirements at any of the stages can lead to a refusal, therefore, we will consider in more detail the key points of the procedure.
What documents are required to open an account in a foreign bank?
Regardless of the institution chosen, in order to register a foreign account for a non-resident, it is necessary to collect and submit the following package of documents:
- an application in the prescribed form indicating the purposes of opening a foreign current account;
- statutory documents of a legal entity;
- basic identification information about the applicant, director, other beneficiaries;
- help from other banks where the organization is served;
- description of the main activity of the company;
- recent financial statements;
- details of external funding sources;
- a rough business development plan;
- contracts with foreign partners, if any.
The presented list is approximate and can change up or down depending on the specifics of the activities carried out by the organization and the conditions of the selected bank.
Preparation of documents is the most important stage of the entire procedure. Failure to comply with the requirements for their collection and execution can not only increase the overall processing time, but also lead to a refusal. Lawrange can help you with this guarantee.
As a rule, you will not be able to quickly open a foreign account. This is a lengthy procedure that requires repeated various checks, including KYC and their financial capabilities.
On average, the whole process takes from 1 month to six months. But it is important to understand that the deadlines are not fixed and may increase in the event of unforeseen situations.
Remote discovery is faster and usually takes about a month. The fastest option is to register an account with a payment system.
How is customer identification done?
Before completing the entire procedure, the bank is obliged to identify the client. Therefore, in order to open a bank account abroad, as a rule, you need to personally visit the office at least once.
During identification, the bank checks:
- the fact of the creation of a legal entity, as well as the reliability of information about the activities carried out by it;
- information about the founders of the organization;
- a representative of the organization authorized to handle the registration procedure.
Recently, an increasing number of institutions are offering an alternative identification procedure via video communication. In such cases, it will be enough to pass a short online interview.
A bank account in a foreign country is required for any company whose activities go beyond the borders of one country. It is needed to interact with suppliers and customers, conclude contracts with new partners and make various payments. Recently, however, the procedure has become more complicated and banks have begun to approach more thoroughly the verification of non-resident organizations. To avoid problems and to be guaranteed to register a foreign current account, you can contact Lawrange for help.