Open an account in an offshore bank: a service for Ukrainian and offshore companies
Registering a company offshore is only half the battle. For the full functioning of the company, you will need a bank account, and opening one is difficult.
To open an account in a European bank or in a payment system for an offshore company, you need to find an experienced assistant. And Lawrange law firm is ready to become such assistants for business representatives.
Among our advantages are 10 years of experience in the market of legal services for international business, cooperation with many reputable financial institutions in Europe, constant monitoring of the rules and requirements for bank customers in different jurisdictions. At your request, we will open an account: 1) for a classic offshore business or 2) for a Ukrainian company in an offshore bank.
Classic offshore account
Our company works with a classic offshore business registered in island jurisdictions, as well as zones with a zero tax burden. These are Seychelles, BVI (British Virgin Islands, British Virgin Islands), Belize, Panama and ect.
Opening an account for an offshore company – basic information
Over the last few years, it has become much more difficult for classic offshore companies to open corporate accounts in European banks. The reason is the introduction of a number of rules, restrictions and requirements. However, it is possible to open, as well as keep safe and sound, a non-resident account for offshore companies in European countries. Some banks do not lose interest in the inflow of funds, even if from high-risk sources. The main thing is to identify banking institutions that are ready for a dialogue, and then efficiently conduct it. Representatives of Lawrange law firm will provide all this for their clients.
What are the terms for issuing an account in Europe? From 2 weeks to several months.
Can I go through the procedure for obtaining an account and IBAN remotely? Yes.
Is confirmation of substance required to open an account? Often yes.
Where can I open an account for an offshore company?
Options for opening an account are constantly changing. We are constantly monitoring the conditions of banks and payment systems in order to offer our customers the best solutions. The following factors are taken into account when choosing a partner bank:
- offshore company jurisdiction,
- activities,
- information about the beneficiary,
- history of the company since its inception.
Among the current jurisdictions for opening an account are Switzerland, Portugal, Czech Republic, Montenegro, Kazakhstan, Macedonia. Alternatively, payment systems can be used. For more information, please contact our manager, who will be happy to answer questions and provide clarifications.
***Notice: If you plan to open an account in Switzerland, be prepared to make a significant initial deposit and keep a minimum balance, which in some banks is 1-3,000,000 USD. But as an example in Kazakhstan, bankers cover the risks of opening an account for offshore companies by setting increased tariffs for banking services.
Criteria for checking offshore clients by banks
Banking institutions today are forced to follow two trends:
- a set of measures Anti Money Laundering (AML) – combating money laundering;
- the Know Your Customer (KYC) rule.
Compliance departments of banks strictly check clients and individual transactions for compliance with national and international banking legislation. Due to the wide exchange of information at the international level, hiding money from taxation is becoming less and less realistic. Although there are still a sufficient number of legal tools for optimizing the tax burden.
For the information! The process of acceptance and further adaptation of new customers by banks is tightly controlled. In the future, it is also impossible to 100% exclude the possibility of closing or temporarily blocking an account in connection with the identification of a suspicious transaction.
When analyzing an applicant for opening an account, the following is taken into account:
- Application form for opening an account: correctness and completeness of filling, reliability of the information provided.
- The origin of the funds for the initial deposit and, in general, the origin of the capital of the company’s beneficiaries.
- The purpose of opening a bank account: where will payments come from and where will they go, who are the company’s counterparties, which countries are involved in the business.
- Presence or absence of politically exposed persons (PEPs) among the beneficiaries: if such persons are present among the owners or shareholders, the bank more carefully checks information about the origin of capital and the purpose of opening an account.
- Risks for the bank: reputational, from the side of the regulator, and so on.
Notice! Reasons for rejecting an applicant include:
- failure to prove the origin of the assets of the beneficiaries;
- the presence of negative information or lack of information about the company in Google and other search engines;
- coincidence of the name of the applicant with the name of a well-known politician or public figure, the inclusion of a person in sanctions and other “black” lists;
- complete absence of any history of the company.
Preparation of documents and description of the company’s business model for opening an account
To open a corporate account, the bank first requests a standard list of documents (it can be seen on the website of the banking institution). The package includes:
- charter and memorandum of association of the company, protocol on the appointment of officials;
- Certificate of Incorporation;
- Share certificate;
- Good condition certificate;
- official information about managers and owners (passports, proof of residence addresses).
Additionally the following may be requested:
- information about the day-to-day financial operations of the company;
- certificates from a bank that already has an account;
- information about investments, real estate transactions that are a source of income.
***Note: Some banks have launched passport verification applications. The check is carried out on a photo that is taken on a smartphone. For personal identification, video communication with representatives of the bank in the messenger is also used. Along with this current option for confirming the authenticity of documents, notarization remains.
In some cases, along with the documentation package, a description of the company’s business model is submitted, including the following data:
- company name, information about the jurisdiction of registration;
- information about the parent company, if any;
- target market sector, activities;
- description of goods, services or services of the company, commercial operations that are planned to be carried out;
- data on persons to whom profit, dividends will be transferred;
- sources of funds to the account;
- a list of clients, suppliers, partners (with company names, web addresses, a brief description of activities);
- resumes of the owners of the company, including details of business management experience.
Important! Until the final decision regarding the opening of an account by the bank has been made, it is very important to be in constant contact with bank representatives, answer any clarifying questions, and demonstrate openness and readiness for dialogue. It is necessary to calmly accept the fact that the process of opening an offshore account can take several months.
Ways of insurance when opening an offshore account
Based on experience, Lawrange law firm’s attorneys and lawyers offer two universal ways to reduce risks when opening an account for an offshore company
Opening two or more accounts at once
This is an effective diversification tool. Even if one account is blocked due to any changes in the non-resident customer service policy, the impact on the business is minimized by the presence of other accounts.
Pre-approval procedure – obtaining preliminary approval
Applications can be sent at once to several banking institutions that meet the selection criteria. Although prior approval does not guarantee 100% bank approval of the applicant with a deeper check, the probability of such approval increases many times over.
Opening an account for an offshore company in the payment system
As a fallback option, there is always the possibility of opening an account in one of the payment systems that work, among other things, with High-Risk activities.
Notice! Payment systems or Electronic Money Institution (EMI) have a number of differences from traditional banks. Often, customer identification requirements are more loyal. Payment systems do not provide services such as letters of credit, loans, deposits, which minimizes the cost of customer service. Moreover, EMI does not maintain large offices with numerous staff, which also has a positive effect on the cost of services. The cost of payment through EMI is always lower than in a traditional bank.
Upon request, you can get information from Lawrange law firm about which payment system is best suited for your business. We constantly update information about the offers of payment systems, successfully work with old ones, and select new partners.
Among the features and benefits of opening an account in the payment system:
- the ability to do without personal presence at the opening;
- a wide network of correspondent banks, which allows you to quickly make international payments;
- account management personally by the director or by proxy;
- convenient Internet banking 24/7;
- two-factor authentication via SMS and mobile app – the highest level of protection, but without hardware passwords;
- provision of the IBAN number of a multi-currency account;
- tested by numerous users convenience.
Open an offshore bank account for a Ukrainian company
The term “offshore bank” is used in two meanings: 1) it is any bank in a foreign jurisdiction where an account is opened for a company; 2) a bank in an offshore zone, that is, in one of the states that are commonly called offshores or classic offshores.
For your information! Since 2019, after the Law “On Currency and Currency Operations” comes into force in Ukraine, legal entities can open accounts abroad freely, without obtaining a special license from the NBU. From this moment on, the procedure for opening a foreign corporate account is entirely regulated by the laws of the country of registration of the bank. At the same time, in order to successfully open an offshore bank account for a Ukrainian company, one should take into account many nuances of offshore banking. We will briefly cover the main points. However, this does not eliminate the need for an experienced assistant when opening an account.
Lawrange experts recommend issuing a foreign account as a solution for receiving payment for work performed or services rendered. With such accounting, it is convenient to cover the company’s expenses arising abroad. In the case of receiving payments, the benefit is on the face – since the money does not enter Ukraine, then the rules for the sale of currency do not apply to these funds.
Important! For all its merits, the solution with opening a foreign account for a Ukrainian company is not ideal for all business areas. In particular, for export-import operations, the law provides for the mandatory transfer of proceeds to Ukraine – during the period of martial law, the deadline for this is 180 days. At the same time, the requirement to comply with this period does not apply to computer programming services and a number of other areas. Therefore, the issue with a foreign account should be addressed individually, depending on the specifics of the business. As an alternative scheme, we recommend that clients open a company abroad + open an account already for it.
Open an account for a Ukrainian company offshore: choice of jurisdiction
Many entrepreneurs wish to open an account in Europe (EU). And although this is a task of a high level of complexity, since it is difficult for beneficiaries from Ukraine to go through bank checks, we have developed algorithms to successfully achieve the desired result. In addition, for certain lines of business, it remains relevant to issue accounts in classic offshore jurisdictions, such as the Seychelles, BVI (British Virgin Islands, British Virgin Islands), Belize, Panama, Mauritius, and so on.
If representatives of AK Lawrange take up the matter, then with great care, both the selection and verification of the reliability of a banking institution for the client, and the preparation of documents directly for opening an account are carried out.
For your information! When choosing a bank to open an offshore account, our team analyzes:
- indicators of liquidity (as far as the bank is able to ensure the fulfillment of its obligations) and capitalization (whether the bank directs enough profit to increase its own capital and reserve);
- reputation in the market, customer reviews, opinions about transparency in work;
- financial statements published on the official website of the institution;
- the composition of the owners, in particular – a good sign is the presence of the state or foreign citizens among them.
Pass bank verification: what you need to know
Classical offshore companies have undergone great changes in recent years. Even if we are talking about Belize, the Caymans or Vanuatu, these are not the tax havens we are used to. Offshore jurisdictions have been forced to take the path of reforming their legislation in line with anti-money laundering and tax evasion trends.
The changes affected both the procedure for registering a business by non-residents and opening accounts in banking institutions. No one will automatically open an account with a minimum of documents. In most cases, you will need a voluminous package of documents and conducting a dialogue with bankers in the right way.
Business model of the company and preparation of documents for opening an account
To successfully open an account, you must be willing to provide the bank with the following information about the Ukrainian business and its owners:
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- areas of commercial activity – even offshore, now not all banks agree to work with High-Risk businesses (Forex, Gambling, Dating, Casino, ICO, Adult, and so on);
- annual money turnover;
- who are the beneficiaries;
- for what purposes the company opens an account;
- expected activity – the estimated number of transactions per month and per year.
Banks, based on their approaches, analyze the business model of a potential client, requesting additional data as needed. Each banking institution is different in its requirements and standards. Often, when registering an account, information about the origin of funds is requested. And then, in the process of working with the account, you need to be ready to report both on the reasons for receiving funds and on the reasons for sending them.
Important! The package of documents for opening a corporate account in offshore often includes:
- registration document for the company;
- constituent documents (charter, minutes of the general meeting, and so on);
- personal documents of owners and directors (copies of international passports and proof of residential address);
- completed bank forms.
All documents are notarized before submission. The above list is not exhaustive. The bank may and often does request additional documents.
Ways of insurance when opening an account for a Ukrainian company
It is very important for our clients to quickly and fully start using an offshore account. Due to the considerable probability of refusal to open it by the bank, we use a number of methods to increase the chance of achieving the desired result. For example:
- members of our team personally accompany the entire procedure for collecting and processing documents, fill out forms and communicate with representatives of banking institutions;
- applications are sent not to one, but to several banks at once, including those in different jurisdictions;
- we request pre-approval, with little additional time and cost, this method provides more room for maneuver;
- as a backup option, accounts are opened in online banks and payment systems.
Opening multiple accounts at once
A Ukrainian company can open abroad for its needs, both one and several accounts at once – two, three or even four. However, if these accounts are opened in different financial jurisdictions, then you will have to carefully analyze the tax laws of each of them.
In order to weigh all the pros and cons of such a decision, you should consult Lawrange’s experts. We keep abreast of changes in taxation in all jurisdictions of the world that are promising for foreign business. Our team also cooperates with local partners, which allows us to establish trusting relationships with representatives of banking institutions.
Lawrange law firm is a consistently reliable assistant in resolving registration and banking issues for international business. We will help you too!
