Opening a bank account abroad is a solution that is in definitive demand among both private and corporate clients. In this review, we consider in detail all aspects of opening an account abroad – what are the existing solutions, which one to choose for your specific tasks and why, what procedure and specifics of opening an account, what documents should be prepared and what is important to know in order not to make mistakes when opening an account abroad or further work with it.
What an account in a foreign bank is for?
Sometimes entrepreneurs and individuals face the requirement of opening an account in a foreign bank, for example, to conduct their business in another country, open a merchant account for an online store, or simply a foreign bank offers more favorable conditions for a deposits. In addition, the presence of such an account will give a certain degree of confidentiality, because banks with good business reputation value their customers and will not talk about your banking operations. So, let's figure out how to open an account in a foreign bank. It will be the best to use the help of specialists in this matter.
Specialists of our company will help you easily and quickly (in a few weeks) to open an account in a foreign bank. With our help opening accounts in foreign banks will be simple and understandable.
As a rule, foreign banks, before opening an account for a foreigner, will want to receive all necessary information about this client, the "Know Your Client" principle is applied here. In practice, this means that, before opening an account, the bank will conduct a check – it will check the documents you provided to the bank.
It is necessary to understand that a bank wants to know with whom it works, what is the source of your income (its legal background is checked), what pattern the potential client will work with the bank, and also the bank products and services that client can use.
So, what is the due diligence procedure for opening an account abroad?
Previously, the list of documents required to open an account with a foreign bank was shorter than the one used now, and in the recent years the procedure has become much tougher. Not so long ago, in order to open an account abroad in a foreign bank it was enough to show your passport, or documents of a legal entity, but now this is not sufficient for any bank.
So, here is an standard list of documents that you will be asked to present by a foreign bank when opening an account abroad (for legal entities):
- Copy of the director's passport and copies of the beneficiary's passports;
- Copies of corporate documents;
- In order to confirm that you are resident, the bank would ask you to provide the last utility payment;
- Bank recommendations;
Also, a bank will require the personal presence of a person opening the account (at least in order to sign in person the relevant documents that are required to open an account in a foreign bank). As a result, the whole process of opening accounts in foreign banks takes several weeks, if all the documents submitted are in order.
It is important to note that if you need to conduct business, a personal account for these tasks is not appropriate. Personal accounts abroad require significantly fewer documents, but cannot be used for business.
Banks of the Baltic countries, Cypriot banks, banks of EU countries and banks in the UAE are among the popular foreign banks. And if banks in the Baltic States and Cyprus periodically cause a sense of uncertainty, and banks in Europe have tough requirements for minimum account balances, banks in the UAE are the combination of reliability and suitable requirements for minimum account balances.
Often large businesses are choosing to open an account in foreign banks in European countries. But here it is important to consider the following fact: before opening an account with a foreign bank in one of the EU countries you will need to collect a large package of necessary documents, in addition, it will take quite a long time. Here, banks aim to get as much information from you as possible when opening an account, and therefore, you may be required to present the various additional package of documents:
- Documents confirming the legal status of source of income, as well as the nature of the company's activities
- Full information about the beneficiary. In addition, to the fact that banks ask about sources of origin of funds, the questions in the interview can be very different, often quite unexpected.
- You will also be asked to explain the reason you have to open an account with a foreign bank, the planned turnover of the account, counterparties, possible contracts, and other information.
European banks rarely open accounts for companies operating in the Forex market, and companies that pose a risk (according to their opinion). Remember that the European bank will take into account all the information provided by you: the country of incorporation of the company, citizenship, sources of income, etc. And if something seems risky or questionable to them, you will surely be denied, and thus you will lose your time before reaching the result. If you consider the option of opening an account in the UAE as an alternative to European banks, this jurisdiction, as already noted, offers the favorable balance of bank reliability and acceptable conditions for opening an account.
The choice of the country in which you are going to open an account abroad is affected mainly by your goal. Remember that European banks are not inclined to open accounts for active business operations, and therefore opening an account for these purposes is not a good idea. It is better to open an account with one of the banks of the UAE to do this. As for banks in Southeast Asia (Hong Kong and Singapore), foreign investors are welcome here, but only with a significant amount of deposit. The Swiss bank is a good solution for those who want to save capital; they are not very good for servicing international trade transactions. Also, choosing the country in which you want to open an account, you need to take into account the political and economic situation in the future (possible risks), of course in a stable country with a stable economy, money will be kept more protected. Opening an account abroad is a reliable way to store funds. One of the advantages of opening an account abroad is access to foreign banking products, moreover, conducting operations in a local bank will help to avoid unnecessary currency conversions.
What are the advantages of opening accounts in foreign banks?
There is a number of advantages, because of which people prefer to open accounts in foreign banks, and not to use the services of those in the country of residence.
Here are the main ones:
- New perspectives for business. Having an account in a foreign bank opens up new opportunities for business, especially in the country in which this account is opened.
- Confidentiality. As a rule, banks in developed countries are very sensitive to bank secrecy, and confidential information on the movement of funds on depositor’s account is disclosed only in exceptional cases.
- High reliability of capital safekeeping. This is often especially the concern for the residents of countries with not very stable home economy and banking system.
- Preferential loans in the bank which has opened the account. Almost all banks provide some benefits to those customers who already have a current account, deposit, or savings account.
Opening accounts in foreign banks in the UAE and other jurisdictions require knowledge of what purposes a particular bank is suitable for and its special requirements. One way or another, the process of opening accounts in foreign banks will take quite a long time. Besides, you will need to collect a number of documents. But the potential benefits provided make it worth to spend your time and efforts. At the same time, you can open an account abroad with the help of our consultants simply and as quickly as possible.