Why do businesses and individuals seek to open an account in Europe? Let's highlight a few points:
- Trust in the European banking system is higher than in the Russian, Ukrainian, Belarusian and others;
- Having an account in Europe is a plus for your reputation;
- An account in Europe allows you to reduce costs when working with European clients and partners;
- It is easier for individuals to buy real estate and other property;
- Access to cheaper loans;
- In the EU, there is insurance for deposits up to EUR 100,000;
- Direct access to currency.
The account is opened with a personal visit and remotely. Remote discovery is required when there is no time for a personal visit. Or when borders are closed, as in the case of the coronavirus.
How to open a European account remotely: ways to open an account
There are two main ways to open an account remotely:
- Through a branch of a foreign bank in your country - you need to open an account not in a branch, but abroad. You need to ask employees about this separately.
- Through the Internet, in most cases with the help of experts who provide such services - both recommending a new client to the bank and professional assistance in preparing documents and submitting an application work here.
The third method, which has not become more widespread among banks, but is quite available in payment systems, is to open an account directly through the institution's website.
Types of accounts abroad
When opening an account abroad, you should remember that there are at least three types of them:
- Current account for standing transactions;
- Savings or deposit accounts - for medium and long-term savings;
- Investment account - for the purchase of various assets and investments in general (except for the deposit).
Also, accounts can have specific tasks, for example, a transaction account - they are opened for specific tasks and usually do not exist for long.
Differences between the European account for individuals and legal entities
Both individuals and legal entities can open an account abroad, including in Europe. Moreover, you can open an account for any purpose: for settlements, investments or savings.
The main difference is that many more transactions can go through the company's current account. Individuals in most cases cannot use their foreign account for commercial activities. A large number of transactions will raise suspicion, especially if the bank has not been warned about it in advance.
The next difference is documents.
Individuals are required to provide:
- A certified copy of your passport;
- Proof of residential address (utility bill);
- Proof of the legality of the origin of funds (tax declaration, property purchase and sale agreements, etc.);
- In some cases, banks ask for recommendations from other banks, from professionals, a resume of the applicant.
Companies can open an account if they provide:
- Statutory documents (memorandum, charter, etc.);
- Personal documents of the owners and directors of the company;
- Business plan and reporting (if any);
- Description of the company's activities;
- The presence of local clients and contractors - in some countries, it is generally impossible to open an account without this;
- Documentary confirmation of the presence in the country of registration (substens) - many European banks require a lease agreement, agreements with employees, etc.;
- Information about future activity on the account: turnover, average trade size; also interested in major partners, contractors and large clients.
In both cases, the documents must be translated into English or into the language of the country in which you open the account. In principle, the English translation is sufficient, and it is universal. Some documents need to be certified and / or apostilled.
Both corporate (business) and personal accounts can be opened remotely or with a personal visit. This largely depends on the bank you choose.
For example, there are banks that are ready to open accounts remotely only for companies. And there are those who are ready to work remotely with everyone - after a thorough check, of course.
When opening an account remotely in Europe, you need to understand: it will not be easy to open an account and the more complex the income structure and the higher the risks, the higher the chance of refusal.
The number of banks that are ready to open accounts for non-residents remotely is falling. Unless the coronavirus epidemic reversed this process somewhat: some banks agreed to accept customers if additional documentary requirements were met. For example, put an apostille on almost everything that you send to the bank for consideration.
But this depends on the specific financial institution.
There are payment systems and we will talk about their differences a little below.
Pre-approval for opening accounts in Europe
The risk of refusal when opening an account in Europe is quite high. Especially if we are talking about a remote procedure. Verifiers can “catch on” for any typo, inconsistency and, instead of trying to figure it out, simply refuse to open an account.
To reduce the risk (as well as the cost of sending documents and processing new ones that have expired while you were waiting for a decision), we use the pre-approval service.
The bottom line is that you first send documents in electronic form (photographs, scanned copies), a bank specialist checks them and gives a preliminary decision. Usually, documents are considered in a relatively short time: from a couple of days to a couple of weeks. The cost of the service is several times lower than for an application for opening an account.
As a result, if a refusal, you saved time and applied to the next bank. If the answer is yes, then you send the originals and continue working. The risk of refusal still remains, but after pre-approval it drops several times (in our experience, after a positive pre-approval, they may refuse due to the unpredictable behavior of the client and obvious errors in the documents).
Pre-approval is also used to open an account with a personal visit: before going to the bank, you receive a preliminary response from the bank, recommendations for additional documents, and already set off with a complete set.
Professional intermediaries also provide a pre-approval service: they communicate with the bank, check your documents, find out all inaccuracies and help correct them during the preparation stage. Plus, they can immediately apply to two or three banks to increase the chance of success.
Foreign Account Notice
According to the existing rules, Russian citizens are required to notify the tax office of opening a foreign account within 30 days. Otherwise, you will have to pay a fine: 1500-4000 rubles for the first violation and 2500-20,000 rubles for the second one.
Also, annually before June 1, it is required to submit a statement of the movement of funds on the account. Since 2020, new rules are in effect and now you do NOT need to report if the following conditions are met:
- The account is located in a country that is part of the OECD or FATF;
- Savings abroad do not exceed 600,000 rubles;
- (CRS).
As mentioned earlier, it is possible to open an account in a European bank remotely, but the choice is limited and the process is not easy. Payment systems are much more loyal to foreign persons.
Payment systems are financial services that offer banking services: account opening, transfers, currency conversion, and the like. These are fintech projects with special licenses.
Such systems allow you to get practically the same service as in banks, but faster and at more affordable prices.
To open an account, essentially the same set of documents is required, often scans are enough. The client is studied using the same algorithms. Therefore, they can refuse to open an account, as in a bank.
Payment systems are of different profiles: some are aimed at a wide range of clients, while others prefer to work with IT projects or only with trading companies. There are even those who are ready to cooperate with offshore companies.
Choosing the right system (as well as a bank) will allow you to open an account faster and keep it in the long term - at least because the institution will understand your business and your transactions.
Opening an account in payment systems takes from 1 day for individuals to a couple of weeks for legal entities. Sometimes it takes 10 working days, sometimes less, but in general, the terms are much more predictable than those of banks, which can consider an application for 2-4-6 months and even after sending additional documents, they can refuse.
By the way, it is for this reason that they resort to the services of professionals - they help to remove 90% of standard errors and find the remaining 10% that prevent opening an account in Europe - both in a bank and in a payment system.
European account for an offshore company?
Account for an offshore company has been a difficult issue in the past few years. It is often impossible to open an account for offshore in Europe: the bank at the entrance warns that it does not work with offshore companies or can open an account only for a certain one currency.
However, there are some banks, for example, in Macedonia or Luxembourg, which are ready to cooperate. In some cases, an account in Europe can be opened if the first deposit to the account is 100,000 euros or more. But in general, banking in Europe is a difficult task for offshore companies.
Here the mentioned payment systems come to the rescue. Again, not all of them accept tax haven companies, but there are those that are willing to consider applications from risky clients.
If you are interested in banking specifically, then we recommend that you study the Caribbean banks. Firstly, it is possible to open a company and an account in one country and this will remove a large amount of headache. Secondly, they have a lot of experience with this type of company. A little later, when you have a payment history, reporting and trust, you can try and open an account in Europe. Perhaps even remotely.
In the Caribbean, an account can definitely be opened remotely.
Where to open a European account remotely?
Despite all the difficulties, it is possible to open an account in Europe. Below are a few countries with a brief explanation.
Open a European account in Latvia
It has been easy to open bank accounts in Latvia since the early 90s. It could even be done directly over the Internet. However, since 2018, it has become much more difficult to open an account for non-residents, in particular for immigrants and owners of foreign companies from the CIS. They are considered risky clients.
Way out? Large deposits, painstaking preparation, as well as opening a local company or representative office - this simplifies the issue of opening an account in any country.
Open a European account in Cyprus
Cyprus is another popular jurisdiction for opening accounts. And again, until recently. After the audit by American specialists, the banks of Cyprus began to actively close existing accounts and make it difficult to open new ones.
Cyprus has interesting payment systems for IT projects, but in general it is worth opening an account here if you are focused on a local business (company).
Open a European account in the UK
Opening a UK bank account for a foreign company that does not plan to operate in the UK is difficult. But there are good, reliable and highly demanded payment systems. Accounts are opened quite quickly, they work stably.
Open a European account in Portugal
If you want to open an account and work in peace, then you should think about Portugal. The account opening procedure may seem overwhelming, but after that you can focus on your business.
At the same time, there is an opportunity to open an account for offshore companies, although the main contingent of companies from the EU and those that plan to work in one way or another in Portugal.
Open a European account in Serbia
Serbia is not part of the EU, but it offers deposit insurance, and so far there is no CRS exchange, developed banking and the ability to open accounts remotely for local companies and branches. A particularly interesting structure with branches: you can open it for a foreign, including offshore company, open an account for a branch, and all this will take from a couple of weeks with proper preparation.
Open a European account in the Czech Republic
In the Czech Republic, they do not like to open accounts remotely, even local companies must have a local director so that there are no questions. But again, payment systems come to the rescue - they work with companies around the world and offer quality service.
Open a European account in Switzerland
Switzerland is a primordial banking jurisdiction. Neutrality, quality service and banking secrecy have created an unshakable reputation. Today, there are some changes, in particular, tax services received access to bank data within the framework of automatic exchange. However, the service remained the same.
It is possible to open an account in Switzerland remotely, roughly speaking, in two cases: if a particular bank supports remote opening of an account (and there are not many of them, in fact, there is only one) and if you plan to invest large amounts - from 500,000 euros. Then there is a chance that the banker will come to visit you himself. If the border is not closed.
But only companies that have a physical presence in the country of registration and keep reporting can apply for opening an account in Switzerland.
In general, Switzerland is an extremely interesting destination for opening an account, at least because of the vast experience, as well as access to a wide range of services and opportunities.
Open a European account in Luxembourg
This jurisdiction, which is popular primarily among wealthy individuals. Here you can open an account for personal and corporate purposes. It is more expensive than elsewhere, but the quality of service, privacy protection and banking expertise are gaining the attention of wealth holders around the world.
Open a European account in Liechtenstein
And one more European country where you can open a corporate account. Companies from the UK, Gibraltar and other jurisdictions can count on the opportunity to open an account here, taking into account that, as in other European banks, the provision of documentary presence in the country of registration is required.
Of course, careful preparation will be required, but at least local banks do not immediately say no.
So how to open an account with Europe remotely?
To open an account in the EU, you need to consider:
- Where is your business located, what it does, what is its turnover;
- Choose a bank or payment system that, in principle, open accounts remotely and that suit your tasks. You can search for them yourself or immediately contact a specialist;
- Preparing documents is the most important stage. Any mistakes here can instantly lead to failure;
- Actively cooperate with a financial institution, answer questions;
- After gaining access, act within the framework of the rules and, if something in your business changes or an atypical transaction is planned, warn about this in advance so that the account is not frozen and closed.
Have you opened accounts in Europe? Which banks meet non-resident business? What difficulties did you face? Write in the comments