6 Tips In Opening A Corporate Bank Account Abroad

Opening a corporate bank account abroad could make your foreign financial transaction more manageable. In addition, it lets you enjoy flexible account management and multicurrency banking transactions. Apart from this, it saves you the trouble given by fluctuating exchange rates that could be a hassle if you’re paying from the account where you’re located. 

Suppose you’re running a business in a foreign country or planning to spend months in it. In that case, you may consider knowing some tips for opening a corporate bank account in foreign countries. For this purpose, here’s an article to guide you. So, read on!

1. Research The Foreign Country’s Banking System

First and foremost, you need to research how foreign banking works in your chosen country. Different countries have different banking jurisdictions you may want to compare to determine which policies suit you. You may also think about the ease of opening a foreign bank account and the fees that come with it. 

For instance, if you’re planning to open a bank account in Australia, you may be surprised by how quickly an ex-pat can create a new account online or in a physical bank. Honestly, you could open yours in a matter of minutes. Because of this, many non-residents decided to open an Australian bank account while investing or taking a vacation in the country. 

Apart from these, you may also need to know about the bank secrecy laws. In Switzerland, for example, if you’re the depositor, you may enjoy the law since banks aren’t allowed to share information about your account without your consent. In that way, you could deposit your desired amount without worrying about leaked information.

2. Prepare The Documents Early

Generally, you can access the requirements for opening a corporate bank account on your chosen bank’s website. You may also get them from the bank should you decide to drop by it. To make your bank opening smooth, you may need to prepare the requisites days or weeks before the application date. This way, your account opening may start right after submitting the requirements. 

In most cases, banks will ask for valid identification cards, such as passports, driver’s licenses, and utility bills. Apart from this, you may also submit government-issued identification cards if they contain the account opener’s complete name, address, citizenship, and birthdate. 

Banks primarily use these IDs to verify your personal information and financial history. In some cases, banks may ask you to authenticate your documents. You may be prompted to notarize them for that purpose. Some countries may even ask for apostilles stamps—a unique certification mark to authenticate some documents. 

Apart from the IDs, banks may also require you to submit a bank reference, a residence or non-residence permit, and an employment contract. Preparing your documents early may give you enough time to look for alternatives if your submitted ones aren’t accepted. This way, you could maximize your application and waiting time.

3. Check The Banking Fees

Generally, the banking fees refer to the amount the bank charges on their account set-up and future transactions. In terms of corporate bank account opening, these fees may include the amount paid for international money transfers from your bank in the origin country to your destination bank. 

For example, if you’re sending money from the United States to Australia, you may spend USD$5 per USD$500. Investments may have higher payments. It could be even higher for amounts more than USD$100,000. The SEPA (Single Euro Payments Area) allows you to have the exact charges for every member country in the European Union. 

Outside the EU, the costs may be higher, and transfer fees may include a higher commission and exchange rate. For better decisions on transfer fees, you may consider getting the services of a foreign exchange broker. Apart from the transfer fees, other costs you may need to check are withdrawal fees, service costs, out-of-network expenses, and excessive transactions fees.

4. Consider The Bank’s History

Apart from the bank’s mechanism for keeping your personal information confidential, you may also consider your chosen bank’s history. It may include how it takes and keeps your financial reference documents from your current bank. 

You may read reviews about the bank or seek the opinion of your fellow ex-pats on the strengths and weaknesses of your chosen bank’s offers. Collectively, these will help you decide whether to stick with your selected bank or move to another choice.

5. Understand The Verification Process

If you’ve already chosen a bank, you may now first get verified before proceeding to the final steps of corporate bank account opening. Banks may check your average balances, deposit and withdrawal frequency, and your customer-bank relationship in the verification process. 

In addition, some banks may be intrusive and repeatedly ask about your fund sources. Based on your records, they may also require you to explain the nature of transactions, especially if they seem incongruent with what you can afford to spend.

6. Think About Your Tax Residency

Tax residency differs from country to country. And for example, in Australia, you may only be considered a resident for tax purposes if you’ve continuously lived in the country for six months or more. In Singapore, you’d need an entire 183 days staying or working in the country before the government grants you tax residency. 

This tax residency has something to do with your bank account ownership, as many countries only allow tax residents to open a corporate bank account. In addition, your tax residency status may prompt you to declare it in your host country, depending on your foreign and native country’s banking and taxing protocols.

Final Thoughts

Opening a corporate bank account overseas may be challenging depending on the foreign country’s general banking rules. Suppose you’re planning to invest abroad or transact internationally. In that case, you may consider referring to the tips provided in this article. 

Every country has different foreign banking policies you need to abide by. Yet, following the tips in this article will help you minimize the risks and hassle in creating your first-ever foreign bank account. Furthermore, it’ll help make your transactions abroad smooth sailing.