Some businesses find it difficult to open bank accounts for their complex ownership structures. Companies owned by multiple stakeholders with varied nationalities, partnerships and multi-national enterprises with branches distributed across the globe are struggling with local or international banks more and more as regulations and AML policies get stricter.
How Does A Complex Ownership Structure Look Like?
A complex ownership structure may involve multiple layers of ownership or control, including subsidiaries, trusts, and holding companies across different jurisdictions. These structures are often utilized for reasons ranging from tax optimization and asset protection to operational efficiency and investment strategies.
How To Determine The Type Of Bank Account Needed?
The first step in opening a bank account for an entity with a complex ownership structure is to determine the type of account that is going to be needed. Consider the operational and financial needs that will be served with the new account, for example: operational account for payroll and supplier payments, investment account for managing commodity or market risks, or specialized accounts like merchant or treasury services are required.
How To Choose The Right Banking Institution?
Selecting a bank that is familiar with international laws and complex corporate structures is an advantage. Some banks specialize in serving multinational corporations and have expertise in managing the regulatory nuances of different jurisdictions.
In the similar vein, look for a bank that can provide dedicated accounts with multi-currency capabilities and multiple payment methods such as SEPA, SWIFT, FPS, ACH and some local rails as well. Try to understand if the selected bank can offer services beyond payment acceptance and funds transfers, such as foreign exchange, forward contracts for hedging, treasury management tools and back-office integrations (Quick Books, Xero, etc.).
If your organization is utilizing stable coins or crypto currencies as means of payments, then you should also make sure that the bank is crypto-friendly and you wont have trouble sending or receiving money from crypto exchange venues.
Finally, if you would like to get an up to date list of banks that are specialized in serving complex ownership structures, fill out our contact form and we will send it to you by email.
What Type Of Documentation Is Required For An Account Opening?
The documentation required can vary significantly depending on the bank and the country. Typically, you will need:
- Proof of identity and address for all ultimate beneficial owners (UBOs) and directors.
- Legal documentation establishing the entity’s existence and structure, such as articles of incorporation, corporate bylaws, and operating agreements.
- Detailed organizational charts showing all layers of ownership and control.
- A business plan or an explanation of the business activities.
Why Understanding The Regulatory Environment Matters?
Every country has its own regulatory environment governing bank accounts for complex ownership structures. It's essential to understand AML and KYC guidlines in the jurisdiction where the bank account will be opened. This may involve disclosing the identity of all beneficial owners and providing detailed financial projections.
How To Plan For Tax Compliance?
Entities with complex ownership structures must be diligent about tax compliance. Understanding the tax implications in each jurisdiction where the entity operates is essential. This includes knowing the tax treaties, withholding taxes, and reporting requirements.
Should You Monitor And Maintain Compliance?
Yes, absolutely. After the bank account is opened, maintaining compliance with all relevant laws and regulations is critical. This includes monitoring changes in the legal and regulatory frameworks in all jurisdictions involved. Moreover, you should keep the bank updated with any ownership or licensing changes of your company so that the bank is aware and doesn’t restrict your account.
Conclusion
Opening a bank account for an entity with a complex ownership structure is a demanding task. By understanding the requirements and taking preparation steps, businesses can effectively manage their banking needs across jurisdictions, ensuring operational efficiency and legal compliance in their financial operations.