Banks tend to be heavily regulated, and the rules are getting tougher all the time. Banks now want to be sure the clients they take on are reputable and not likely to result in fines from their regulator. It is essential to select which bank best fits your business and prepare your application carefully before submitting it. To use an old adage, 'Measure twice cut once'.
Do you need to visit your chosen bank?
Banks do prefer a personal visit where this is possible, but the majority now accept that this is not practical in most cases.
Important. Banks do change their account opening criteria frequently and without notice. We, therefore, recommend that you submit documents without delay.
First, what is an 'e-wallet' or 'digital wallet'? As defined by Investopedia 'Digital wallets are financial accounts that allow users to store funds, make transactions, and track payment histories by computer.'
e-Wallets, by comparison, are lately regulated although the safeguards are fewer. By way of illustration, PayPal was probably the first e-wallet, but in the last 5 years, many more have come on to the market. Some e-Wallets specialise in specific areas, e.g. very cheap international transfers or credit card processing.
As with banks, it is crucial to know:
• what you want
• whether your business will be accepted and
• to have all the documents necessary to submit when requested.
This often several days after the account has been nominally approved. In most cases, e-Wallets need to prove who you are and will need some documents regarding the company you plan to use.
Please be aware that it is not uncommon for e-wallet companies to periodically request more information about what your company is doing etc.
Digital wallets do not require a personal visit as account opening procedures are entirely online.
e-Wallets, by comparison, are considerably easy to open provided that you fit their criteria. Very often an account can be created within a day or two, although it is likely you will be asked for a follow-up information at a later stage.
We offer traditional bank account opening service together with an introduction to appropriate e-wallet providers. We work with many banks and e-wallets in Singapore, Hong Kong, USA, Lithuania, Cyprus, Ireland, and UK. Traditional banks generally require prospective clients to visit the "local" branch, we are able to open accounts remotely as in many cases we are authorised agents of the banks or we work with agents to the bank.
In all cases, we will need to be able to tell the bank:
• The nature of the business you are proposing.
• The jurisdiction of the company.
• Your nationality and current place of residence.
• How many transactions will you expect per month and what is likely annual turnover.
• From where funds are likely to receive from or to (details of your customers/suppliers).
Opening an offshore bank account remotely can take anything from 2 to 6 weeks, and you can expect to be asked detailed questions about your business plan and potential customers and suppliers.
By comparison, e-wallets are considerably easy to open provided that you fit their criteria. Very often an account can be created within a day or two, although it is likely you will be asked for a follow-up information at a later stage.
Establishing a company is generally a fairly straightforward and can be completed in a matter of days (once the required information has been provided). By contrast, opening a business bank account can be a frustrating experience.
Every bank has slightly different requirements, all require their own forms and mandates to be completed and, depending on the bank, seemingly irrelevant questions may be asked. To make the matters even more complicated many banks have unpublished blacklists of nationalities they do not wish to do business with. They all have another list of the types of businesses they do not want to be involved with.
All the banks we offer have internet banking. Some systems are better to use than others.
Some of the banks offer a designated person or team (rather than a call centre) to handle your account. At the very least, this gives you a direct point of contact with someone within the bank.
All the banks have a range of products they offer, but with interest rates are currently very low, the deposit rates are also very minimal.
Debit cards may be in various currencies (typically in US$, € Euro, £ Sterling). Some banks only issue cards in the local currency, which means that all transactions outside that currency area are subject to a currency conversion charge, which can be from 2% to 5%.
Account opening fees.
Many banks and e-wallets levy an account opening fee, which can sometimes be very substantial.
Minimum opening deposit.
Almost all the banks require, or at least expect, clients to deposit funds immediately after opening an account. Generally this should be at least enough to cover a year's bank charges. We suggest 500 as an absolute minimum.
Monthly maintenance costs.
Although the Mauritius banks one of our banks levies no monthly "maintenance charges" most do. This could be relevant for new businesses which wish to keep their fixed monthly expenses to a minimum. We recommend you to also check fees and charges on the bank's website.
Transaction charges. e.g. 'SWIFT' payments.
Outward transfers always attract charges. Transfers between "own" accounts or accounts at the same bank are usually free of charge. Some banks charge for inward payments as a "processing fee". Although SEPA transfers are generally free of such charges.
Completed and signed bank application forms, mandates etc.
A set of corporate documents Some (but not all) banks require company documents to be notarised and apostilled, which can be expensive and time consuming. Sometimes, as authorised agents, we can certify documents.
If the company is more than 1 year old, a Certificate of Good Standing (CoGS) will almost always be requested. Generally, banks request a business plan and in most cases a CV on the directors. This will also apply to existing account holders. We can also obtain CoGS if requested.
Full documentation for all those connected to opening a bank account including passport copy (in some cases ID card), proof of residential address e.g. utility bill, bank statement, bank reference. Increasingly banks request a personal bank reference, where this is difficult to obtain they will accept 3 months of banks statements. Some banks are now requesting a professional reference letter from a lawyer or accountant.