European bank account

The rules of the game in the international business arena are changing rapidly. Now the registration of a company in a low-tax jurisdiction does not automatically ensure the achievement of the desired result – reducing business costs to a minimum. Among the factors that should be considered when registering a company abroad is the solution to the issue of opening a corporate bank account.

 

Opening an account in one of the EU countries is now much more difficult than a few years ago. But it is possible! Lawrange law firm is ready to provide expert support in opening an account for a foreign (offshore or onshore) company in a European bank.

 

Important! Changes in the banking sector are happening extremely fast. Banks with which it was possible to establish cooperation last year may not be the best option at the moment. But in the course of monitoring and thanks to extensive business contacts, we constantly find new proposals. If you are faced with the task of opening an account in a bank in Europe, we recommend that you first consult with us!

 

 

How to open a European bank account: general information

European Union legislation and internal regulations of European banking institutions allow opening accounts for non-residents. Having an account with a European bank provides a number of advantages for the company:

 

  1. guarantee of secure storage of funds without the risk of currency depreciation;
  2. Reducing costs when working with European counterparties by performing transactions in SEPA (Single Euro Payment Zone), which is faster and cheaper than through SWIFT (approximate the cost of a payment order in SWIFT from € 20, in SEPA € 5, and sometimes – free);
  3. plus the status and reputation of the company;
  4. diversification of business risks, in particular – loss of assets due to raider takeovers, seizure of accounts, confiscations, etc.

 

For your information! To successfully open an account with a European bank new policies and regulations need to be considered related to the trend towards deoffshorization and the fight against money laundering worldwide.

 

  • Firstly, with the introduction of CRS-exchange – automatic exchange of financial data between fiscal services of most countries of the world, the era of confidentiality and anonymity of information about the owners of foreign companies coming to an end.
  • Secondly, EU banks are forced to follow a strict AML policy (Anti Money Laundering). For each potential client, Due Diligence is carried out, checking for the legality of the sources of funds. Banks are fining hundreds of millions of dollars for inadequate customer due diligence.
  • Thirdly, the KYC policy – “Know Your Client”, which concerns disclosing the origin of capital, has become mandatory for banks. If we are talking about a corporate account, then the beneficiaries of the company are checked according to a number of criteria.
  • Fourth, many banks are now requesting confirmation of the substance, the real economic presence of the company in the state of registration. The concept of “substance” may include the company’s website in the official language of the state of registration and in the corresponding domain zone, the presence of a rented office and hired employees.
  • Fifth, the extraterritorial activities of FinCEN (the US Treasury Department’s Financial Crimes Agency) influence banking institutions around the world.

 

A turning point in the activities of European banking institutions was the scandal with Latvian banks in 2017–2018. This event resulted in the blocking of thousands of non-resident accounts and the liquidation of a number of European banks. From now on, banks limit the share of non-resident clients from the post-Soviet space.

Each bank has policies and regulations to support the full implementation of general anti-money laundering trends. Business relationships with high-risk clients are only established after extensive due diligence by compliance officers.

 

 

Subtotal:

Opening a European bank account today is a difficult task. Under any circumstances, it will take a lot of time and bureaucratic red tape. To achieve the desired result, it is advisable to enlist the support of experts with experience. Success factors include “correct” communication with bankers, readiness to immediately respond to inquiries, and after opening an account – actions strictly within the framework of the rules, timely notification of bank employees about any atypical transaction in order to avoid blocking the account.

 

Is it possible to open an account with an EU bank remotely, without a personal visit? Yes.

What are the terms for issuing an invoice in Europe? From 2 weeks to several months.

Can you provide an up-to-date list of banks for a specific business? Yes.

 

 

How to open an account in a European bank for a foreign company?

The first step is to select a banking institution where the application will be submitted. Alternatively, you can apply and open accounts in two or more banks in different financial jurisdictions at once, which ensures diversification of cash flows and mitigation of risks in case of blocking of one company account.

 

After receiving a request for consultation, Lawrange experts find out the specifics of the client’s activities, the company’s business model. In some cases, we provide a complex of services for the registration of a company abroad with the subsequent opening of an account in a European bank.

 

In the list of EU banks with which Lawrange works:

  • Switzerland : MBAER Bank, CIM Bank
  • Liechtenstein : Bank Alpinum
  • Luxembourg : East-West United Bank SA
  • Portugal : Santander, Novo Banco, Millennium BPC, Abanca, Banco Montepio, Caixa Geral de Depositos
  • Poland: BNP Paribas Bank, PKO Bank, Santander Bank, Millenium Bank
  • Cyprus: Bank of Cyprus Public Company Ltd, Hellenic Bank Public Company Ltd, Alpha Bank Cyprus Limited, Central Cooperative Bank PLC, Eurobank Cyprus LtThe Cyprus Development Bank Public Company Ltd, Housing Finance Corporation, Societe Generale Bank – Cyprus Ltd
  • Malta: Sparkasse Bank Malta, Banif bank, Lombard Bank, Bank of Valletta,
  • Latvia: AS LPB Bank
  • Lithuania: Swedbank

 

Under certain conditions are also considered:

  • Montenegro : Adriatic Bank
  • Serbia : API Bank
  • Turkey : Ziraat Bank, Akbank, Garanti, Yapı Kredi BankING Bank, TEB

 

To open an account in a European bank for a foreign company , you need to prepare a package documents including:

  1. Corporate documents:
    1. Certificate of Incorporation – confirmation of company registration;
    2. Memorandum & amp; Articles – Memorandum and Articles of Association;
    3. Minutes of Subscribers Meeting, Appointment of Director or Secretary – minutes of the meeting of members of the society, appointing a director or secretary.
  2. Certificate of Good Stading or Certifcate of Incumbency – Certificate of Good Condition or Certificate of Authority (documents confirming the current status of the company).
  3. Tax Residence Certificate – tax number of the country of incorporation.
  4. Annual return – annual financial report (for the last year) / Self-Assessment or the Tax return – tax return or annual balance sheet.
  5. PSC, register of members – register of beneficiaries.
  6. Bank statements of other banks.
  7. Confirmation of the origin of funds.
  8. Members and directors documents:
    1. copies of passports;
    2. confirmation of permanent residence (often receipts for utility bills for the last months);
    3. questionnaires and resumes for all physical persons related to the account (beneficiaries, company executives, shareholders, account managers).
  9. Business model or business plan:
    1. purpose of account opening;
    2. description of the economic activity that will bring funds to the account;
    3. sources of funds, senders and countries;
    4. expected volume of transactions in monetary and quantity terms;
    5. information about contractors.
  10. Recommendations from business partners and other banks where the client has an account.

 

*** Note: In some financial jurisdictions, it is possible to open an account for a non-resident only if conducting business in this country, in particular – if there are local customers and contractors . Appropriate confirmations are added to the package of documents.

 

Collected documents should be translated into the official language of the country in which the account is opened, or into English. A number of documents require notarization and / or apostille affixing.

 

Important! Some documents have expiration dates. For example, bank statements and proof of permanent residence must be no older than 3 months.

 

Very important! Firstly, at any stage of consideration of a potential client’s candidacy, the bank reserves the right to request additional documents and intelligence. Such requests should be answered promptly and as accurately as possible. Secondly, any incorrect or inaccurate data specified in the questionnaire, other documents increase the threat of refusal at times. Compliance departments of banks rarely miss such details. At the same time, neither the client’s status, nor the possible income that is missed do not matter.

 

 

Open an account in a European bank for a Ukrainian company

 

A company from Ukraine may need to open an account in the EU if numerous settlements with European counterparties are planned. However, in addition to the convenience of conducting transactions with customers and suppliers in euros, having an account with a European bank is proof of a good reputation and reliability of the business. That is, we are talking about the possibility of strengthening loyal relations with existing counterparties and gaining the trust of new ones.

 

Important! In order to open an account in a European bank for a Ukrainian company, one must go through strict and multilateral compliance. But then, in the eyes of partners, the successful completion of a bank audit will be one of the important arguments in favor of establishing cooperation. Based on practical experience, Lawrange experts concluded that an account with a European bank opens up good prospects for such areas of Ukrainian business as IT, export-import, and so on.

 

However, attempts to independently open European accounts for Ukrainian companies in most cases end in failure. Any errors and inaccuracies when filling out bank forms may result in a refusal and termination of the possibility of any further dialogue with bankers. Unlike banks in Ukraine, which almost always open accounts for business, in Europe any customers, and especially non-residents, are treated with extreme caution. To win over European bankers, you need a certain experience and maximum attention to detail.

 

At the same time, we can tell our Ukrainian clients two good news:

  • Firstly, you will not have to report to our tax service about opening an account abroad – the current legislation of Ukraine does not oblige companies to do this.
  • Secondly, you can open an account in a European bank online – without a trip abroad.

 

To successfully open an account with the support of a Lawrange Law firm, it is necessary to prepare certain information about the legal entity, its owners and management.

 

Information and documents on the founders (shareholders), beneficiaries and directors:

  1. copies of internal passports, foreign passports and TIN translated into English;
  2. confirmation of residential addresses – often receipts for utility bills are suitable for this purpose, but it can also be certificates from condominiums, copies of rental agreements, and so on;
  3. information about education and professional experience – translated into English copies of the university diploma and work book (with records of tenure in a certain position), copies of reporting to the tax office in case of activity as an individual entrepreneur;
  4. letters of recommendation – in particular, from a previous place of work, from a Ukrainian bank where an account is already opened, from a lawyer.

 

Information and documents on the legal entity:

  1. constituent documents and data from the USR;
  2. description of the business structure, company activities, market experience, confirmation of competence in this area;
  3. contracts and certificates of work performed signed by contractors;
  4. financial statements of the company translated into English;
  5. bank statement of account balances.

 

For your information! The chances of successfully opening an account increase if:

  • the company successfully develops in the Ukrainian market in its direction, makes a profit and pays taxes;
  • the company has a working office in Ukraine – with real employees and permanent activities (European bankers are aware of the widespread tendency in the country to use mass registration addresses);
  • the owners and the director have an ideal business reputation;
  • the director has a higher profile education and experience in the relevant business area.

 

Bank representatives often conduct interviews with potential business clients. A trip to the bank branch is not always required – in many cases, it is possible to arrange an interview via video link. At the same time, the head of a Ukrainian company should prepare for an interview very seriously. Specialists of Lawrange Law firm often allocate a separate consultation for this. In addition to business-related issues, sometimes you have to disclose some information about yourself, your family, for example, about your hobbies. Such unexpected questions are within the normal range and should not cause confusion.

 

In general, now we can talk about a fairly large positive experience of opening accounts in the EU for Ukrainian business. Most of the possible complications can be responded to in advance, so clients can expect the desired result.

 

 

How to open an account in a European bank for an offshore company?

Until recently, the classic offshore was an efficient financial instrument that simultaneously provided a low or zero tax rate and high confidentiality. But now doing business offshore is accompanied by a number of difficulties, including the solution of the issue of opening an account in a reliable European bank.

 

When it comes to companies registered in tax-free jurisdictions, many EU banks refuse immediately, without even accepting documents for consideration. Trying to submit documents to all banks in a row on your own is a bad idea. It is better to immediately shorten the list with the help of experts, and focus your efforts where it really gives results.

 

To successfully open an offshore European bank account , attorneys and lawyers JSC Lawrange must take into account the type of activity of the client and the specifics of a particular financial jurisdiction. For example:

 

  • In Lithuania, Latvia and in Cyprus require full substance (a real office with local employees, a website hosted by a local provider and a national domain, although would be one account in a local bank, tax residency, the presence of significant documentation and office equipment in the office).
  • In Malta banks only work with local companies.
  • In Switzerland the question of opening an account will be considered only if an impressive activation deposit has been made and the account has at least an impressive minimum balance.

 

For your information! Based on the experience of AK Lawrange specialists, open an account in a European bank for an offshore company with the lowest risk and cost, you can use the pre-approval procedure. This is a request for preliminary approval of a potential client by the bank.

 

For this, digital documents are sent to the banking institution. The bank officer examines them and makes a preliminary decision. The pre-approval procedure usually takes from two days to several weeks. The cost of such a service is several times lower than the final consideration of the client’s application.

 

Among the advantages of using the pre-approval procedure when opening an offshore account:

  1. several times decrease in the risk of getting a bank refusal when submitting an application (although this risk remains, in practice, refusal after a positive pre-approval happens very rarely );
  2. the ability to submit documents for preliminary approval to several banks at once – then you can continue working on the bank from which you managed to get a positive response;
  3. sending documents online – you can plan a personal visit only if the client’s candidacy has been pre-approved and recommendations for collecting additional documents have been received.
  4. saving time and money – you don’t have to wait for a long time and pay big money, and then, having been refused, start from scratch with the same costs time and money (some documents will have to be processed again, since the validity of a number of documents is limited to several months).

 

 

How to open an account in a European bank for a company resident in Ukraine?

On February 7, 2019, the Law of Ukraine No. 2473 “On Currency and Foreign Exchange Transactions” of 07/07/2018 came into force, which canceled the obligation for residents of the country to obtain permission to open an account in the European bank in the National Bank or tax service. From that moment on, foreign financial instruments became more accessible for representatives of Ukrainian business.

 

Opening an account with a European bank for a company resident in Ukraine is now possible on a general basis, which is determined by financial jurisdictions and the banking institutions themselves. The main difficulties are associated with the passage of compliance control, namely, with the provision of evidence of the legality of the origin of funds.

 

Important! Successful opening of an account in a bank in Europe directly depends on the correct execution of the documents that are submitted with the application, and on correct communication with bankers. Lawyers and lawyers of Lawrange have accumulated sufficient experience in solving both the first and second questions. We have all the necessary legal tools to open an account for you in one of the reputable European banks with a minimum amount of time.

 

 

How to open a European bank account remotely?

Remotely, without visiting a banking institution, it is more difficult to open an account than if a potential client visits the bank personally. At the same time, banks in Europe have a general rule: the more complex the income structure, and the more risky a potential client is engaged in, the higher the probability of refusal.

 

Important! Despite the difficulties, you can open an account completely remotely, without leaving your country of residence and without a personal meeting with the banker .

 

The remote account opening service is not available in all European banks. The choice of banks subject to remote account opening is limited. But Lawrange specialists cooperate with banks that provide such a service. You should prepare yourself: firstly, for a very thorough check of documents by the bank’s compliance department, and secondly, for making a certain deposit. Depending on the bank, the size of the minimum deposit varies from several thousand to several million euros.

 

When opening an account for a legal entity remotely, banks usually request a set of company registration documents, as well as personal documents of the owner and account manager. To open an account in a European bank remotely , you should promptly respond to clarifying questions from bankers. Often such questions relate to the origin of funds and the biography of the company’s beneficiary, his business reputation, involvement in politics and social activities, experience in the development of business projects.

 

In some cases, the procedure for remote account opening involves an interview with a potential client in the messenger. Online identification of a potential client via video communication through a special application is being implemented in Switzerland thanks to a circular from the Swiss financial regulator FINMA. Alternatively, representatives of Lawrange AK provide services for opening an account by power of attorney.

 

 

How to open an account with an EU bank: summary

Subject to a number of conditions, opening a bank account in one of the EU countries is a difficult, but solvable task. The level of difficulty increases in cases where the company is registered offshore or conducts a high-risk type of activity (Forex, Gambling, Dating, Casino, ICO, Adult).

 

For your information! Many representatives of banking institutions are biased towards potential clients from the post-Soviet space, including from Ukraine. Correctly structured communication and impeccably prepared documents help to resolve this problem in some cases.

 

Representatives of AK Lawrange have experience in solving various problems of opening accounts in Europe. If you are just at the start of a business, we recommend that you first analyze your activities in order to register a company in the most profitable jurisdiction. This approach will make it possible to minimize problems with opening an account in an EU bank.

 

Approximately the procedure for opening an account with a bank in Europe is as follows:

 

Step 1. Select a bank.

Among the criteria for making this choice:

  • type of activity, goals and plans of the client;
  • bank requirements for the client, features and complexity of the client verification procedure;
  • compliance of the bank profile with the specifics of the planned operations;
  • reputation of the banking institution;
  • service rates.

 

Step 2. Passing pre-approval (optional).

Sending preliminary requests and obtaining preliminary approvals for opening an account (recommended when the company is registered offshore or conducts a high-risk type of activity).

 

Step 3. Collecting documents for submission to the bank along with the application.

The documents must be drawn up strictly in accordance with the requirements of the bank. Any inaccuracy or mistake can lead to a refusal to open an account. Dates, signatures, notarization are important.

 

Step 4. Filling out bank questionnaires.

Banks provide Self-assessment Forms. Correctness and accuracy are just as important here as in documents.

 

Step 5. Interviewing a potential client with a bank representative.

Banks approach this issue differently. Sometimes only a personal visit to the head office is required. In some cases, it is allowed to organize a meeting in Kiev. Some banks support remote identification using video.

 

Step 6. Consideration of the submitted documents by the bank.

The decision making process can take from two weeks or more. At this time, a potential client may receive requests for additional information, which increases the overall time for the bank to make a decision regarding the client.

 

Step 7. Accessing your account and Internet banking.

Banks now provide a wide range of tools for Internet banking and remote account management. An account in a European bank immediately becomes a factor in increasing the respectability of your business.

 

If you have any questions about the procedure and nuances of opening an account, please contact us! Consultation from the experts of AK Lawrange will help you dot the “i’s”.

 

 

 

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