To globally expand a business, an international banking account is necessary. Having an overseas bank account, for that matter, is just right for startups.
Here’s a detailed guide about overseas banking for startups and why it is necessary. Founders may follow these steps to easily form an application and acquire one.
In today’s world, globalization is rapidly evolving. Since worldwide communication and trade have become quite common, having an overseas bank account has become a necessity.
If you have a start-up and struggle to receive payments internationally, then it can be stated with confidence that you need an overseas bank account for startups. Here’s a step-by-step guide on how to acquire one.
What is an Overseas Bank Account and Why Do Startups Need One?
An overseas bank account is opened in a country other than the registered business’s address. Remotely opening an account for overseas banking benefits is quite common for startups.
Here’s why a startup needs an overseas account.
- Accessing International Customers Easily- One of the advantages of overseas banking accounts is accepting payments without high conversion fees.
- Investor Confidence- The startup might need angel investors to support its business. Finding an investment for the founder’s business will be easier since investors choose businesses with strong banking systems.
- Global Expansion- Opening an overseas bank account for startups holds great importance if the said business wants to expand globally. Since overseas bank accounts allow founders to access the jurisdiction’s currency and have a local account, expanding becomes easier.
It is safe to say that overseas bank accounts are not just for big corporations. When it comes to startups’ business banking needs, they are just right.
How Do Startups Prepare Before Applying for an Overseas Bank Account?
International overseas banking for startups is strictly regulated. Banks do KYC and AML checks rigorously. So to prevent rejection, founders must prepare accordingly.
Incomplete documentation and an unclear business structure are among the most common rejection reasons. Here are the key preparation steps:
- Defining the Purpose of the International Bank Account- Banks will ask the reason for the founder’s application. The reason may be accepting payments from a different currency or expanding globally. Nevertheless, banks ask this question upfront.
- Researching Regulations Specific to That Jurisdiction- KYC and AML checks are done differently by each country, although there are global regulations. It must be checked accordingly, especially if the founder wants to open the account completely online.
- Preparing the Core Documents- Most startups get rejected because their documents are incomplete. Founders must make sure the necessary documentation is ready.
Once founders are prepared to open an international overseas account, the next step is to get all the core documentation ready.
What Documents are Required to Open an Overseas Bank Account for Startups?
When dealing with international overseas banking, founders must know that the documentation necessary differs by country. Nevertheless, all banks follow KYC (Know Your Customer) and AML (Anti-Money Laundering) regulations.
Although there is some core documentation needed for every applicant, non-residents and founders from high-risk countries will be strictly scanned.
Core documentation can be listed as follows:
- Business Incorporation Documents- These are specific to your region, but they must include: a certificate of incorporation or a business registration certificate, and a shareholders’ list.
- ID- If local rules and regulations allow national ID might be enough. However, usually, passport copies of directors and shareholders are needed. Some jurisdictions also ask for notarized copies.
- Proof of Address- Proof of address is needed. The company’s lease agreement is enough, but when it comes to directors or shareholders, utility bills and bank statements are necessary
- Documentation Regarding Taxation- To easily open an international business banking account, a business tax ID or an equivalent is enough.
- Financial Data- To easily open a business bank account, existing bank statements, especially of 6-12 months, if available, are necessary.
It’s important to be aware that choosing and getting your documentation ready is only half the battle. Choosing the right jurisdiction is also an important part of the application process.
With years of expertise, Jetonbank offers easy routes for startups. To learn all about our regulations, visit Jetonbank.
How to Choose the Best Country for Opening an Overseas Bank Account?
Choosing the best jurisdiction for an international business account is important because different countries follow different regulations.
The wrong choice of country may lead to difficulties when transferring funds and problems when it comes to international credibility. Here’s a list of countries to choose from for each business’s needs:
Singapore- The country is popular for founders, for it is an English-speaking country with strong payment rails. However, most banks want KYC checks to be done in person. If the founder wants the procedure to go completely online, Singapore is not the best choice.
Hong Kong- The jurisdiction easily allows access to the Chinese market. But non-residents need to show the source of their funds quite strongly. Although virtual banks help, they run strict KYC checks.
United States- The US is known to founders mostly by easy Access to fundraising and investors. However, the country enforces risk checks quite regularly.
European Union- Mostly picked countries in the EU are Lithuania and Estonia. Estonia allows e-Residency; therefore, it is easier to open an account for non-residents. However, Lithuania asks non-residents to show real EU ties and operations.
UAE- The UAE is mostly picked because it offers zero corporate tax for many small and medium-sized enterprises (SMEs), and the country is strongly recommended for businesses that want to access Asia.
Be aware that most jurisdictions may ask for in-person interviews and may need robust documentation related to KYC checks.
There isn’t a one-size-fits-all answer when picking a jurisdiction for the startup’s overseas account. Jurisdiction must be picked according to the company’s specific needs. However, after choosing the jurisdiction the only thing left to do is the application. Here’s a detailed guide.
What is the Step-By-Step Process to Open an Overseas Bank Account for Startups?
Not missing any steps, especially when talking about overseas banking for small business needs. Here’s a detailed step-by-step guide on how to open an overseas bank account.
- Choosing the Account Type- The founder must decide if a traditional bank or a fintech platform is needed. Since fintech platforms allow faster outcomes, they might be the right choice.
- Creating a Bank-Ready Folder- The folder must include: corporate documentation, business proofs, tax compliance reports, and all the certifications needed. Make sure the documents are not expired and complete.
- Submitting the Application- The founder must fill in all the details Jetonbank asks for. Make sure KYC and AML checks are in order.
- Verification- There may be a small questionnaire before opening an online overseas account. Keep in mind that if the documents are foreign, the bank might ask for a notarized copy.
- Conditional Approval before Activation- If an initial deposit is required, the founder must provide it. And some signatures pertaining to the overseas bank account may be needed.
Jetonbank is a reputable bank with many years of expertise. To learn our policies and open an overseas bank account online for startups, visit our website now!
Can Startups Open an Overseas Bank Account Online Without Visiting the Bank?
The answer to that question is yes, but it depends. Jetonbank allows you to open an international bank account online. But some documentation is necessary. Required items include:
- Business Registration- Your company must be eligible to operate a business account. Business licenses are specific to your jurisdiction.
- Verification of Identity- Your identity card issued by the government will be sufficient since banks like Jetonbank use biometric data. EBA (European Banking Authority) clarifies this requirement when it comes to overseas banking.
Additionally, regional rules and requirements vary. Some countries- like Estonia, Lithuania, Switzerland, Singapore, and the United Kingdom allow you to open an overseas bank account completely online.
All of them commonly require: documentation of business, identity verification, proof of address, video verification, source of your funds, and business description.
Be aware that Know Your Customer (KYC) and Anti-Money Laundering (AML) principles always apply when it comes to licensed banks like Jetonbank. To have your overseas bank account online for startups rapidly, visit our website.
How Long Does It Take to Get an Overseas Bank Account for Startups?
Timelines vary when opening an overseas account. It can take minutes with fintech platforms. But when it comes to traditional banking, it can take several days to weeks.
Traditional banks may require more time because manual reviews and verification rules are more stringent. However, it probably won’t take any longer than 6 weeks.
Fintech platforms or digital banks usually require less time. They usually approve your online overseas account in 24 hours. But receiving total access will take more time.
There are also other factors, for example, the accuracy of documentation, the procedure of verification, compliance checks, and specific requirements indigenous to that region. Additionally, if you are a non-resident, the verification procedure and the documents required may be harsher.
So it is safe to say that your timeline will be heavily influenced by your jurisdiction and the readiness of the documentation you submitted. Visit Jetonbank to get your business bank account quickly.
What are the Common Fees and Charges Associated With Overseas Bank Accounts?
Common fees and charges associated with bank accounts are as follows:
- Account maintenance fees- To keep your international overseas account active, banks take this route. This fee covers customer service and other services banks offer.
- Currency conversion fees- If your currency is different from your business account, you have to pay a conversion fee. This fee may add up quickly for your international banking account.
- ATM withdrawal fees- This is the case, especially if your business banking account includes a debit card.
- Incoming or outgoing transfer fees- International payments, also known as SWIFT payments, carry fees on both ends.
Always keep in mind that there are various factors at work regarding how much you will be charged. For example, if your startup’s monthly activity is a lot, then the associated fees will add up quickly.
How Do Startups Fund Their Overseas Bank Account After Opening?
It is safe to say that overseas banking for startups is quite advantageous in this subject. Of course, you might think that after opening the account, it might be hard to keep up.
Here are some of the ways to fund your overseas bank account for startups:
- Angel Investors- Angel investors are individuals who would like to support your startup. They require ownership in return for their support.
- Personal Investments- Investing is important, especially when it comes to funding your overseas banking for small business needs. You might consider investing your profits so it will be easier for you to fund your overseas bank account.
- Crowdfunding- This is also a good way to support your startup. Crowdfunding is quite common for new startups.
- Regional Government Programs- Many governments offer funds to new and innovative startups. You should check if such programs exist in your country.
Jetonbank offers new startups easy routes and lower transfer fees. To learn all about the advantages of overseas banking, visit Jetonbank.
What are the Compliance and Regulatory Requirements for Overseas Bank Accounts?
Compliance with international rules and regulations is important regarding international overseas banking for startups; these rules protect businesses from illicit finance.
There are global and regional regulations that banks and, indirectly, startups must comply with.
Here’s what you should know:
- Know Your Customer (KYC Principle)- This principle covers the set of regulations banks use to verify your ID. KYC principle Works by implementing several rules and regulations. Like customer identification program (CIP) and customer due diligence (CDD).
- Anti-Money Laundering (AML)- Money laundering is a big problem targeting banks and insurance companies. To fight this situation, licensed banks like Jetonbank rigorously follow international standards.
Although international overseas banking is globally regulated, regional rules may vary. Here are some of the regional rules and regulations.
- United States- In the US, banks must report suspicious activity, monitor clients, and verify their ID. The most important regulations that cover KYC principles are the Bank Secrecy Act and the USA PATRIOT Act.
- European Union- It is important to clarify that member states have the freedom to choose their own KYC principles. But just like the US, AML directives have standard rules and regulations for each member.
- Singapore- In Singapore, financial institutions must verify the customer’s ID, nationality, and address.
- Switzerland- Switzerland has very strict AML rules. The country requires notarized documents, proof of funds, and ID verification.
- United Kingdom- After Brexit, the UK started following its own rules and regulations. The country still complies heavily with EU standards.
Make sure to check the rules and regulations specific to that region before opening an overseas bank account.
In today’s economy, choosing the right financial institution for your business is hard. Jetonbank is a reliable financial institution that complies with global principles.
With its strong overseas banking benefits and set of global regulations, it follows, our bank offers a safe and advantageous route for your startup.
To easily open an account and get started with startups business banking, visit Jetonbank now!
