How to pass bank compliance when opening a foreign account?
Before registering a foreign company, it is worth asking the question: "Will banks open an account for such a company?". And here there are many nuances. In which jurisdiction will your company be registered? What kind of residency will the founder have? Will the company have a website? What kind of employees will there be? Many factors matter. In the current realities, it can be relatively easy to register a foreign company, but opening an account for a foreign company can turn into an impossible task.
Banking rules are constantly becoming more complicated. When opening an account of a foreign company, banks carry out a capacious and complex compliance procedure, in other words, they check the company wishing to open an account for compliance with the requirements of the bank and the financial regulator. Compliance or the KYC (know your client) procedure prevents money laundering, ensures transparency of business processes and protects business owners from legal, regulatory and strategic risks. Compliance is carried out not only by banks, but also by other financial institutions, for example, payment systems and brokers.
In this article we will tell you how to successfully pass the compliance procedure when opening a foreign account and get a corporate account for your foreign company without long expectations and stress.
Features of the KYC procedure in the bank when opening a foreign account
First of all, the bank checks all corporate documents and the legal capacity of your company. For banks, companies with a history that have turnover and verified counterparties are preferable.
However, this is not a panacea for strict compliance requirements. It is necessary to study each case individually. If you had a company with a history and a good reputation, and then you suddenly closed an account in one of the banks, then it will not be so easy to open an account in another. But nothing is impossible! Antwort Law company has many years of experience in opening, maintaining and unblocking bank accounts and will save you from unnecessary headaches.
Banks always pay attention to the country of business registration. If you have registered a company in a classic offshore, then the path to world banks is closed to you. Before you incorporate a company, choose your jurisdiction wisely!
The next important step of compliance when opening a foreign bank account will be the identification of the director and the founder. The figure of the director and founder is very carefully controlled by the bank. These persons must have an impeccable reputation. We are talking about the absence of debts, criminal and administrative violations, as well as compromising information of any kind on the Internet.
Let's digress to one interesting real case. The client was the founder of a large Asian company, he had accounts in three top banks in the world. One day, the media took him "on a pencil" and wrote a scandalous article about how he was flying from another business trip and had a row on board. After that, just a week later, two banks closed the account of our client's company, and soon a third followed them. Unfortunately, banks can be ruthless. Opening an account is not a problem, it is much more difficult to keep this account.
The founder or shareholder of the company must have a confirmed source of income and show the bank where he got the money to open and promote his business. In this case, the bank verifies the integrity of the owner of the company and its financial component. You need to be ready to provide statements from personal accounts, show the presence of real estate or securities that bring income.
If you have successfully passed the previous two points, then we can assume that the account is practically "in your pocket". After a complete audit of the identity of the officials and all the documents of the company, the bank proceeds to study your business plan and the availability of partners for subsequent business.
Bankers do not want to open accounts to dummy companies. Reliable and money companies are their main criteria.
An important point that many do not pay due attention to is the provision of a description of the company's activities. The correct and appropriate presentation of the company — is the key to a trouble-free account opening. Here you need to know the practice of a particular bank. There are banks that take on the service of many trading companies. As an example, CIM bank can be cited. Their priority is trading corporations and IT companies. The well-known Asian bank OCBC prefers clients from industry and trade. We always advise our clients which bank is best suited for their activities.
Some banks require confirmation of substance (real economic presence) to rent an office, hire a qualified employee, compliance officer) in the country of business registration, or invest significant funds in banking instruments (for example, to put a large deposit to open an account).
We want to warn you that the requirements of banks are changing and tightening daily. You need to be fully prepared and be sure to have a backup option to avoid stopping all business processes.
Antwort Law specialists will select a premium segment bank for you and open an account without any problems. Do not risk your funds, sort out the whole procedure of opening an account step by step by contacting professionals. Our company's specialists will go through the entire compliance procedure in the bank together with you!
Antwort lawyers have experience working with more than 180 banks around the world. We have more than 2,000 open accounts under our belt. We not only know the system of work of premium banks, but also have partnerships with most of them. Entrust the future of your business to professionals!