In the last few years, companies from Asia, Latin America, and the Middle East have increasingly extended their operations into the European Union. There are many factors behind this trend, most of it being digitalization of many industries and thus foreign business taking advantage and setting-up shop or activities in the European continent.
Why It Is So Hard To Get European IBAN For Non-Resident Companies?
The main goal for these non-resident companies is to penetrate local European markets and sell their products or services there which is not possible without a local European IBAN account. However, achieving this objective is challenging due to harsh compliance and regulatory oversight that exist in the European banking industry.
EU banks operate under Anti-Money Laundering (AML) and Know Your Customer (KYC) regulations, obligating them to confirm the identity and legitimacy of customers to prevent money laundering and terrorist financing. Non-resident company owners might encounter challenges meeting these requirements, given that their identity and financial history may not be as readily accessible as those of local residents.
Moreover, banks exhibit caution when dealing with non-resident customers due to a concern of higher risk of illicit activities, tax evasion, or fraud. In response to these concerns, banks may enforce more rigorous document or compliance requirements or reject account applications altogether.
To sum up, EU banks prefer assurance that a company will engage in genuine business activities and not merely function as a shell company. Consequently, many banks mandate non-resident company owners to establish local offices, hire local directors, and demonstrate legitimate business activities. Compliance teams may request business-related invoices, proof of address, and even a website in the local language to ensure the authenticity of the business.
How To Get European IBAN Account For Non-Resident Company? Simple Steps.
Getting European IBAN for a non-resident company involves adhering to local compliance and specific bank policies. The steps detailed below offer a general guide for opening such accounts in majority of European countries, but the exact requirements can vary based on jurisdiction and the bank's policies. For a list of banks in the EU that are friendly to non-resident companies, feel free to contact us.
Choose the Right Bank:
Detailed information on this aspect is covered extensively in this article. Contact us for a list of banks accommodating non-resident companies and/or directors.
Company Formation and Set-up:
Skip this step if your company already exists. The company structure can impact the compliance outcome for the bank account application. A simpler and more transparent structure enhances the chances of onboarding. Business owners with passports from sanctioned countries are advised to seek residence outside those jurisdictions to facilitate account opening.
Gather Required Documentation:
Collect necessary documents for the company and its directors, including:
-Certificate of Incorporation or Registration.
-Articles of Association or Operating Agreement.
-Business Plan or Flow of Funds explanation.
-Identification Documents for directors and beneficial owners.
-Proof of Trading Address (not older than 6 months).
-Company Resolution authorizing account operation.
-Tax Identification Number (if required).
-AML/KYC Forms Filled And Signed (will be supplied by the bank of choice).
Appoint Authorized Signatories:
Identify individuals authorized to open and operate the bank account as per the company's governing documents and resolution.
Complete Application Form and Due Diligence Checks:
Fill out the bank's application form accurately, providing all requested information and attaching required documents. Respond promptly to any additional questions from bank representatives. Prepare for due diligence checks, including background checks, source of funds verification, and AML/KYC checks.
Wait for Approval:
The bank will review your application and documentation. Approval times vary, and in some instances, the bank might request initial funding from the company owner's personal accounts.
Maintain Compliance and Manage Account:
Gain access to online banking and other services. Continuously monitor and maintain compliance with the bank's requirements and ongoing reporting obligations.
If you have any questions about bank account opening or need our opinion on your situation, fill out the contact form, and we'll provide an answer within 1-2 business days.
Conclusion
In summary, getting European IBAN for non-resident companies poses challenges due to strict compliance and regulatory requirements. Despite complexities, adherence to the process, including choosing the right bank and meeting documentation criteria, is crucial for successfully accessing European markets.