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Rachel Eleza
Rachel Eleza

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4 Steps to Opening a Foreign Bank Account For Your Start-Up Business

The world is slowly turning into a global village, and having a foreign account is becoming a necessity for businesses that are focused on leveraging the growing connectivity. You would need a foreign account for your startup to facilitate transactions with your customers or partners in a certain foreign country. You can easily appeal to foreign customers and partners when you have a bank account in your target country. In addition, bank accounts where your customers reside enable faster funds transfer with considerably reduced fees. A foreign bank account can also make it easier for your startup to take investment opportunities to take your business forward. If you are looking to open a foreign bank account for your startup, here are 4 steps to take.

  1.  Find the best bank
    

    Each bank is different in what it offers in terms of fees, rates, and options. It is important to choose the bank that is going to benefit your business the most. Make sure that you compare several banks in your target country before making your decision. For instance, if you want to open a bank account in Hong Kong, going through a list of banks in Hong Kong can unlock valuable insights that can be instrumental in choosing the best bank for your startup. Besides considering the lowest fees and rates, you also need a bank in Hong Kong that guarantees safe and successful bank transactions. In addition, you need to consider the following among others:
    The bank’s ranking, financial results, and reputation
    The currencies available
    The type of accounts offered
    Interest rates for credit lines
    Minimum balance and transactions require

  2.  Gather the required documents
    

    With terrorism financing and anti-money laundering regulations, foreign banks are keen on doing their due diligence before allowing foreign clients into their banks. For this reason, it is important to submit all the documents and information that the bank asks of you and your business. Most foreign banks will seek to know the legality of your business, the source of the funds that will be transacted in the account, the type of transactions that you deal with, and the beneficiary owners of the business among others. To prove this, you might be required to submit the following documents among others:
    Business registration documents
    Proof of business legal address
    Proof of business transactions such as business plan, invoices, contracts, bank statements, and the like
    List of company owners and ownership structure
    Proof of beneficiary’s source of income (bank statements, salary certificate, tax declaration)
    Identification documents for the owner or power of attorney if a representative is the applicant
    Recommendation letters from your home country bank, partners, suppliers

  3.  Fill in the application
    

    After gathering all the required documents, the third step would be to fill in the application form. Some banks have the option to apply online and then attach the required documents. Others would require you to send the certified copies of the original documents via courier. Some other banks would require you to visit the bank personally to fill in a manual form. Whichever, the requirement, ensure that you fill in the application correctly. Be careful not to leave any spaces blank and ensure that you provide the right information. Some banks will deny your application at the first sign of incorrect information. Besides this, no bank will open an account with incomplete application forms. To avoid the back and forth and expedite your account opening, ensure you have done it the right way.

  4.  Start operating
    

    After you send in your application, you have to wait for the bank to confirm their decision. At this stage, some banks might ask you to make a deposit to ‘show the money’ before the final decision. You can do a transfer from your account or from your business account to another bank. A transfer from a partner or contractor can also be accepted. However, you will need to provide documents such as a contract or invoice for additional checks.

Conclusion
Opening a foreign business account can be a bit complicated as compared to opening one in your home country. However, it can be easy for you when you follow the right process and provide all the required documents and information. You also need to be prepared to provide additional confirmations to some transactions once your account becomes functional to avoid incidents such as the bank freezing your funds for lack of clarity.

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