Opportunities for Non-Resident Banking

October 26, 2023

While previously banks used to fight for clients by offering the best service conditions and the clients were able to choose the banks, things are reversed today. Now banks choose ‘proper’ clients taking various factors into consideration. The factors include the jurisdiction where the prospective client comes from, the legality of his/ her sources of income, the reputation, and personal history of the client, and so on. Under pressure from national and international financial regulators, banks have been tightening the screws on customers.

Nevertheless, a bank account in a foreign country is a necessity if you have a company registered in that country or if you are planning to expand your business operations abroad. Below we discuss some non-resident banking opportunities available at the moment.

Who may need a foreign bank account?

You need a corporate bank account in a foreign country to accept payments from your foreign clients and to make payments to your suppliers. Besides, you can use it to pay salaries to your employees working in the foreign country, add debit cards to the account, and so on. It’s good to have a bank account in the country where your company operates even though it is not an absolute necessity.

In some countries, you have to report opening a foreign bank account to the country’s authorities if you open it for a home-based company. If you are setting up a corporate bank account in a foreign country for your company that is registered in a foreign country, reporting the fact is often not required.

As far as a personal account with a foreign bank is concerned, you will certainly need one if you find a job in a foreign country or obtain a legal residence permit and relocate to the foreign country. Besides, you may simply have more trust in a foreign bank than in the banks in your home country. In this case, you can use a personal bank account abroad to securely keep and grow your personal or your family capital.

Types of foreign bank accounts

In most cases, people set up current and savings accounts in foreign banks.

A current account allows making regular transactions – to and from the account. A company needs a current bank account to function: to buy raw materials and to accept payments for the processed goods, for example. Other types of bank accounts can also be used for regular transactions but there are normally no requirements as to the security balance if what you have is a current bank account.

Saving and investment accounts are opened for the purposes that their names suggest: the accumulate money or to invest money. An interest is normally paid on your money in a savings account and an investment account can help you earn even a higher interest but more risks are involved in the second case. If you have a fixed-term account and withdraw the money before the due date, you will lose the interest on the money.

How to go about choosing a foreign bank

Currently, opening a bank account for a foreign company (let alone an offshore-registered company) is a challenging task indeed. Much depends on the company ownership structure and types of its business activities as well as the policies of the local financial regulator.

Below we cite only some of the questions that you need to clarify when choosing a foreign bank to set up an account there

  • Does the bank that you are considering provide services to foreign companies and non-resident individuals? Does it provide services to offshore companies?
  • Can you set up a current account (one that you will often use for transactions) with the bank?
  • Is the bank going to be happy with the company’s business activities, the company’s beneficiaries, its partners, and payment destinations?
  • In what currencies will you be able to make and receive payments? Does the bank have correspondent banks in foreign countries that allow making payments in foreign currencies?
  • What are the bank’s tariffs?
  • What are the ratings, the reputation, the financial indicators, and the growth perspectives of the bank that you are considering?
  • … and many other questions.

For these reasons, you have to seek assistance from reliable experts who keep track of the (ever-changing!) situation in the banking industry if you want to set up a non-resident bank account, be it a personal account or a corporate one. You can click the link and request professional assistance in the matter from International Wealth experts.

What country should you choose to open a non-resident bank account?

If you would like to set up a corporate bank account in a foreign country, you can choose Europe, Asia, or offshore jurisdictions for this purpose.

European banks

Banks in the EU countries have to follow the requirements that the European Central Banks puts forward. Banks in such countries as Switzerland, Liechtenstein, or Montenegro, for example do not have to follow these requirements but they have national regulators anyway. We suggest that you should consider the following European banks first of all:

· Baltic banks (Latvia, Lithuania, Estonia);

· Banks of Cyprus;

· Central European banks (Poland, Hungary, Czech Republic, etc.);

· Western European banks (Austria, Liechtenstein, Luxembourg, Switzerland);

· Other banks (Montenegro, etc.)

Banks located in these countries are popular with owners of foreign companies opening accounts there.

You have to realize, however, that all banks including European banks now take a longer time to process applications for services. They often request additional information from foreign applicants. In addition, bank tariffs are high, especially in Western Europe. We also have to note that most banks in the countries specified above will refuse to provide services to offshore-registered companies.

At the same time, some banks in Europe will work with offshore companies if the cooperation is highly profitable to the banks. If an offshore company buys many banking products and leaves a large security deposit, it might be able to set up a bank account in Europe.

Asian banks

Two jurisdictions are especially good for non-resident banking in Asia: Hong Kong and Singapore. Please bear in mind that Asian banks cooperate willingly only with foreign companies that have some business interests in the region – they have subsidiaries, partners, or customers in Asia.

Due diligence procedures are strict in both jurisdictions. To set up a bank account in Hong Kong, for instance, you have to have a personal interview with a bank manager in Hong Kong. You will have to speak English or Chinese because you are not allowed to use translation services during the interview.

Offshore banks

You can also open an offshore bank account in St Lucia, Mauritius, Seychelles, and other offshore jurisdictions.

Offshore banks have traditionally specialized in servicing non-resident clients. However, opening an account with an offshore bank can be as difficult as opening one with an onshore bank. Due diligence procedures are in place in offshore zones too and the tariffs in some offshore banks are comparable to the tariffs in onshore banks.

There is no denying that opening a foreign bank account is a demanding task these days but it remains performable anyway. Just apply for professional assistance and prepare for a long fight. Eventually, you will get there!



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