Corporate Banking Considerations

In our experience, banking can take much longer than anticipated. It’s therefore important to be as prepared as possible.

The issue of disclosing and documenting ownership, including venture capital and private equity-backed companies, is a common challenge.

In the UK, banks are generally interested in any shareholder who owns over 20% of a business and they will want to see the notarised identification documents for key stakeholders.

Most banks will need to meet with a representative of the company, who has the right to reside in the UK, in order to talk through the business model and to satisfy the “Know Your Client” requirements.

What type of bank account & currency?

You’ll need to consider which currency is best for your new overseas account, in order to minimise charges and make customer and supplier payments easier. Even once the bank meeting has taken place and all documentation has been provided, it is best to be prepared for further queries from the bank’s internal compliance department. Submission of all information does not guarantee the opening of a bank account. The final decision lies with the compliance department and their risk assessment of the company in question.

Things you need to think about include:

  • What is the currency you use for the majority of day to day operations?
  • Will you have employees in other territories or be making large payments in foreign currencies on a regular basis?
  • Which currency will you need to use on sales invoices?

Why is a foreign currency account needed?

A foreign currency account will normally be appropriate to reduce the risk of fluctuating exchange rates and avoid higher bank transaction charges (which are levied when making international payments from a GBP bank account). When paying foreign currencies from a GBP account, you are subject to the banks ‘spot rate’ on the day of payment, which can mean uncertainty in terms of the exact amounts being withdrawn from your bank account. Foreign accounts can also ease the tracking of payments and receipts.

How long does it take to open an account?

Dependent on the complexity of your ownership structure, the process can take weeks and months rather than days in many jurisdictions – delaying getting your business moving.

The majority of banks will require the following at the very outset:

  • Business contact details
  • The nature of the business, legal status, incorporation details and business plan
  • Purpose of the account, start date, anticipated turnover and funding requirements

You will also need to provide the following information about all the partners/directors and ultimate beneficial owners of the company:

  • Name, address and date they moved into their home address
  • Previous address details (if they have been living at the current address for less than three years)
  • Date, city and country of birth, nationality and place of residence

Using an existing banking partner

When expanding into new territories, the bank account opening process can be simplified by choosing a bank which is a member of a global network or has connections with your existing banking partner at HQ.

By doing so, member banks are able to share information about you and the business in order to streamline the process wherever possible.

The first port of call when trying to set up a bank account abroad should always be your existing banking partners and service providers who may have a wealth of connections.

What other options are there?

An F&L Client Account can be used to provide banking facilities quickly and efficiently for clients taking payroll and monthly accounting services. The F&L Client Account is legally owned by F&L and is a unique account used only for your funds and with its own unique account name and number. We will only make payments from this account on your instruction.

Although it’s not possible to obtain credit facilities on the account (e.g. credit cards, overdrafts etc.) it is a great way of enabling you to make fast, secure payments to your suppliers and employees and receive funds from your customers. It also allows you to avoid extensive form filling and an account can be open and operational within 1-2 weeks following receipt of the required information.

For more information, please contact:

Keeley Stock
Partner
+44 (0)20 7430 5895
kstock@fitzandlaw.com

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