Opening a bank account in the UK is a difficult process if the directors or significant owners are foreigners and not UK residents. Even if there are no legal restrictions against non-UK residents owning or directing UK-registered businesses, nor are there laws preventing them from opening bank accounts, the strict AML regulations make it quite challenging.
Few Reasons Why Foreigners Struggle With UK Bank Account
For companies with non-resident or foreign directors, the primary hurdles involve AML checks conducted by banks. These checks can slow down the process and make it lengthy and here is why:
1. Physical Presence: Many traditional banks require company representatives to be physically present in the UK to verify their identity.
2. Residency Restrictions: Some banks do not accept companies if all directors are non-residents or if there are decision makers who are non-residents.
3. Signatory Limitations: Non-resident directors might face difficulties becoming signatories on the bank accounts.
4. Transparency: British banks want to understand why foreign owner wants to open a company in the UK and have a local bank account. They will check if company is acting locally or just as a shell company. Local trading address will help to solve this, however the business activity will be checked in detail.
What Are The Steps For Opening UK Bank Account As A Foreign Owner?
Thankfully, the evolution of digital banking has created new ways and alternatives that cater to global entrepreneurs and foreigners that want to open and own a business in the UK. Here are steps for UK bank account opening as a foreign owner:
1. Finding The Right Bank
While traditional banks like HSBC and Barclays are an option, they typically require physical verification. However, modern digital banks such as Wise and Revolut offer more flexible solutions but even those became strict or stopped accepting foreign owned companies for UK bank account opening.
On the other hand, there are several digital banks in the UK that specialized in non-resident bank accounts and are open to do business. If you would like to get an up to date and tested list of digital banks that can open local UK bank account, fill out our contact form and we will send it to you by email.
2. Prepare Documents
Even with online banks, you will need to provide comprehensive documentation to satisfy AML and KYC requirements:
- Proof of identity and address for all directors and significant shareholders.
- Company registration documents and details of your business activities.
- Proof of business address, which may be in your home country, but better if it is in the UK.
- Website or marketing materials as compliance analysts try to understand how you get clients.
- Proof of legitimate business activity such as example invoices or supplier/buyer contracts.
3. Consider Professional Services
If navigating local business and banking requirements for your UK ventures seems too challenging, consider enlisting professional help. Specialized professionals like corporate service providers or lawyers can assist in company formation, setting up local representative office, handling documents for the onboarding with banks and sometimes even local marketing. Moreover, they can also aid in setting up a UK workplace pension scheme for your employees.
Last Thoughts
Setting up a bank account is important, but it's part of a larger business setup process in the UK that may include:
- Registering with Companies House.
- Understanding tax obligations both in the UK and your home country.
- Ensuring compliance with all local and international trade laws.
- Knowing local market conditions and competitive landscape.
Conclusion
Opening a UK bank account for a company with foreign directors is not an easy task but possible. By choosing the right banking partners and preparing accordingly, you can establish a functional banking setup that will support your ventures in the UK.