For whom is it easier to open a bank account abroad: a startup or an existing business?

Opening a corporate account abroad is a real test for any company. It is necessary to choose a country and a bank according to the goals and specifics of the business, allocate a sufficient amount of time for collecting and submitting documents, and, most importantly, give the correct answers in the questionnaire, which will have a direct impact on the bank's decision to open an account for you, as well as on its operation in the future.

Which companies are easier to open an account - startups with zero business history or existing businesses? And what steps need to be taken to ensure that the bank has a positive perception of your company's profile, regardless of previous history? Let's explore these questions with Antwort Law.

Bank or payment - what's the difference?

To begin with, let's define the term "bank". We mean both traditional banks and bank payment systems. Many entrepreneurs need to know the difference between these financial institutions, although it is quite significant. The main difference is not the presence of physical branches, as many think, but the range of services provided and guarantees.

Classic banks, having the appropriate license, carry out financial transactions and offer deposits, deposits, loans, investments, and other financial products in various currencies. In addition, they provide clients with certain legal guarantees for the safety of their funds. Payment systems under a different license type only conduct exchanges and payments, operating with a limited list of currencies and not providing such guarantees as traditional banks. Despite the limitations, payment systems are popular even among large international companies due to their flexibility and efficiency in exchanging and transferring funds.

... Often, businesses don't choose between banks and payment systems – they open accounts with both, or at least strive to do so.

There are several reasons for this. Payment systems often offer more favorable rates for conducting transactions and require fewer formalities. Banks provide a broader range of financial services and enhanced reliability.

By utilizing both types of accounts, businesses gain advantages from both. ...

Vladyslav Makarenko, Managing Partner, Antwort Law


Solutions for startups

For startups, unlike traditional banks, we recommend applying to payment systems that are more flexible towards newcomers not burdened by history and the lack of established clients and partners. Opening a corporate account is easier, faster, and more economical in such systems. However, in traditional banks, you also have a chance, subject to important requirements: having a non-mass address, a physical office, a local director and employees, and a local telephone number. It is also important that your scope of activity is clear and predictable, for example, if you are involved in trade, export, or information technology rather than innovation or crypto products. Even if you cannot demonstrate the above, a standard bank is still close to you. You have to accumulate a positive history, turnover of the enterprise and establish strong client and partner connections before contacting them.

What should companies with history do?

If your company already has a history, then be prepared to study it carefully to understand what the bank might be wary of. For example, unwanted, high-risk, or sanctioned clients and partners will most likely be reflected in your bank statement for the last 3-6 months, which banks typically request from companies. Such information may be grounds for a refusal to open an account, even if you have already completed cooperation with a particular company or country considered "toxic" by banks.

Thus, if the background of your business is not always transparent and includes connections with high-risk structures, problems with taxes, or negative mentions in the media, it may also be more advisable for you to open an account with a payment system for making payments, which the latter handle well. Even experienced businesses, as noted above, use "payments" for these purposes, and to save and increase funds through deposits and investment programs, they turn to traditional banks, which remain attractive for business thanks to such products.

So, no matter whether your company is new to the market or already has an impressive history, in both cases, opening a corporate account abroad comes with its advantages and nuances. However, the key point is the right choice of a legal partner who can find the best way to open a foreign corporate account and provide the necessary support at every stage.

Lidia Ivanova

International Lawyer
Antwort Law

Where is it better for a startup to open an account?
We recommend startups to consider payment systems that are less demanding than traditional banks. However, traditional banks are also an option if certain requirements are met, such as having a physical address, office, and a local phone number. Regardless of where you apply, it's important to carefully prepare your application: even payment systems that are friendly to new companies may refuse to open an account if the documents are incorrectly or incompletely filled out.
What distinguishes traditional banks from payment systems, and how to make the right choice?
The main difference lies not in physical branches but in the range of services and guarantees. Traditional banks offer a wide spectrum of financial services and guarantees, whereas payment systems are limited to exchanges and payments. To make the right choice, we recommend basing your decision on your goals and the characteristics of your company.
What to do if companies refuse to open an account with a foreign bank?
If a company or its owners, directors, top management, key subcontractors, or clients are considered high-risk by a bank, for example, due to negative mentions in the media, we recommend paying attention to payment systems to ensure smooth transactions. Generally, payment systems are less demanding and cautious compared to traditional banks.
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