Business Account in Another Country. Why Should You Open It?
Foreign business bank accounts are not new to the global financial services industry. These accounts have helped many businesses to create good foundations for success in overseas countries. However, many companies still find it challenging to open such accounts abroad. Hence, this article will show you simple ways to open foreign business accounts and the best options available in Europe and other parts of the world. Keep reading!
What is a Global Business Account?
A global business account is a single-currency or multi-currency account that a company has with a bank or financial institution based abroad. It can have different names, such as "foreign corporate account," "company account abroad," "international business account," and "business overseas account." Different types of banks, FinTech companies, and many other financial institutions provide global business accounts. Small and large companies are encouraged to open foreign corporate bank accounts to facilitate transactions with customers, suppliers, and partners in other countries.
Why Open a Company Account Abroad?
Every business owner or manager that has customers, business associates, or suppliers abroad, or anticipates new business opportunities in overseas markets, should try to open a foreign bank account. For what reason? The answer to this question was given by Artjoms Grivkovs, CEO at VIALET:
"A business account in a foreign bank offers the business owner a number of obvious advantages and comes with the following benefits:
- International investment: If you see promising opportunities abroad, opening a business account in that country will make it easy for you to invest in them. For example, with a free IBAN business account from VIALET, there is no limit to the opportunities you can grab in Europe.
Besides, you may make more money abroad than at home when you buy one or more foreign businesses. All expenses and income will be in the local currency of your foreign bank. In addition, your transactions will be processed and completed in minutes rather than days. The fast speed comes from the absence of intermediary banks, currency conversion, and other factors that delay international wire transfers.
- Reduction of taxes: Uncle Sam (as the United States government is fondly called) will always want to have a share of your hard-earned money. Is he alone in this regard? No! Businesses in many other countries pay taxes to help governments generate revenue to cover public expenses.
Corporate income taxes vary from country to country. Hence, your business can get some tax benefits by keeping money in a foreign bank account where the tax rate is lower than in your home country. For example, as of June 2022, the corporate income tax (CIT) rate in Spain is around 25%, while it is about 15% in Lithuania. So, your company will pay a lower income tax to do business with a foreign account in Lithuania than in Spain. One of the best options for opening a business account in Lithuania is VIALET, which has had one of the best ratings among AskWallet users recently.
Moreover, if your home country does not charge foreign income tax like the United States, you will profit from having an overseas bank account. You can save more money by opening a business account in other countries like Lithuania and Germany, where CIT rates are low.
- Low-cost SEPA and SWIFT payments: Opening a foreign bank account for your business can allow you to make low-cost money transfers through SEPA and SWIFT. SEPA is the financial messaging platform for making cashless euro payments between banks in the Single Euro Payment Area. So, if you live within the SEPA zone, you can open a free EUR business IBAN account with a money transfer service provider like VIALET and make free SEPA payments to member countries.
Similarly, but in broader ways, you can use SWIFT to make cheap transfers when you send popularly traded currencies like EUR, USD, and GBP worldwide. SWIFT is a financial messaging system that connects more than 11,000 banks in over 200 countries and facilitates money transfers in about 38 different currencies.
- Foreign business partners: Having a bank account in a foreign country makes it easier for you to find business partners in that country. It simplifies transactions by allowing them to send and receive money to and from your business account in their local currency.
- Capital protection and accumulation: Opening a foreign account allows you to easily reinvest the profit from your overseas business to generate more money, which you can save for the future. In case you later face hard times in your home country, you can travel to where your foreign business is and live off your savings.
- Confidentiality protection: Most foreign banks guard the financial information of their customers from third parties. Therefore, if you want to keep your financial details away from your competitors, opening a business bank account abroad will provide you with this kind of confidentiality. However, in many cases, law enforcement agents or tax officials are permitted to access such information. You do not have to worry about government authorities checking your transactions as long as your business is legal.
- Flexible account opening and management: Today, it is no longer compulsory for you to travel to another country to open a business account. You can use your laptop with internet access to create a corporate account with a neobank or financial institution in another country for free. For example, EEA countries residents can open a business account with VIALET online in a couple of days".
What Do I Need to Set Up an Account?
The requirements for setting up a foreign bank account vary by type of business and intended country of operation. For example, in Europe, the amount of capital a limited liability company must deposit to open a corporate bank account for business registration is different from that for the sole trader category. And this requirement is not the same when you move from country to country.
However, to answer the question of what you need to set up a foreign bank account, the following are the requirements to expect from banks in Europe:
- A valid ID, such as a passport, or national identity card.
- Certificate of business name.
- Certificate of incorporation — for limited liability companies only.
- Proof of registered business location, for example, a recent utility bill.
- The Memorandum and Articles of Association.
- Evidence of Partnership — for partnerships only.
- Valid bank mandate form (especially in the Republic of Ireland).
- Signatures of persons authorised to use the account.
- Opening deposit (or capital).
- Business plan (especially in Germany, Switzerland, Malta, and the United Kingdom).
- Details of shareholders, directors, or/and beneficial owners of the business (especially in the United Kingdom, Germany, and Malta).
Note that neobanks offer faster account opening services than traditional banks. They allow you to create a business account using the internet from anywhere their services are available. For example, to open a foreign business account with a neobank like VIALET, you need to go through the KYB (know your business) and KYC (know your customer) procedures.
Conditions for Opening a Foreign Business Bank Account
Banks in many countries place certain conditions for opening a foreign business account. The most popular ones are:
- That you must be at least 18 years old.
- That you need to present certain personal and business documents.
- That you must produce translations of your personal and business documents issued in a foreign language to their local languages or English before they can accept them.
- That your company documents must be legalised or apostilled in your home country so that they can be accepted abroad.
- That the members of the management board of your company must appear in person for business account opening.
- That you must provide detailed information about the scope of activities of the company. For example, this is required by banks in Latvia, Estonia, and Malta.
- That you must present the company’s turnover over the years.
Best Payment Systems to Open Foreign Business Accounts
The global financial industry comprises many neobanks, money transfer services, FinTech companies, and electronic wallets that allow people to open business accounts in foreign countries. Below is our list of the best financial service providers you can use in different parts of the world.
Yes. Companies in the United Kingdom can open foreign bank accounts. However, they will have to satisfy a long list of requirements, including apostilled company documents, for account registration with traditional banks abroad. For this reason, we recommend using fast alternative services like VIALET to open business IBAN accounts abroad easily.
The best bank for international business depends on your country of interest. If you want to expand your investments within Europe, you can create a corporate bank account with a neobank like VIALET. You will get a free EUR IBAN account that you can use to make free SEPA payments. Besides, it supports SWIFT transfers between European and non-European countries. So, you will also find it helpful if your market of interest is outside Europe.
There are many banks you can use overseas, depending on the country where you want to open an account. In Europe, we recommend using VIALET. Other services that you can use in different regions include but are not limited to:
- Wise, FairFX, and Monese – International
- Capital One, and Square – United States
- N26, Soldo, and Monzo – Europe
- Sticpay, Statrys, and Mercury – Asia
- Intergiro - Nordic Countries
- Moneynetint, TransferGo – Other regions
Get a Business Account Abroad with VIALET
A foreign business account is a universal need for businesses with strategic plans to operate internationally. Companies used to follow stressful bureaucratic processes to create such accounts. But today, with VIALET and other similarly fast, safe, and reliable services in the market, you can open a free IBAN business account using your laptop. Most businesses that use VIALET’s corporate accounts abroad are making fast payments to and from their customers, partners, and associates. They are grabbing opportunities in foreign lands with ease. You can do the same if you try VIALET today!
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