Conditions for opening bank accounts for companies and individuals

Opening a bank account abroad is a profitable solution for the safety of equity capital for both individuals and legal entities. But before you decide to open an account in a foreign bank, you need to find out what procedures and documents the financial institution will require from you.

CLIENT IDENTIFICATION: KYC AND DUE DILIGENCE PROCEDURES

First of all, each bank follows the KYC principle, referred to as “Know Your Client”, in accordance with world standards. This procedure provides that the bank when deciding to open an account has the right to require information (documents) about a potential client (company). After the bank receives all the necessary documents about the client, it conducts a standard due diligence procedure for verifying the information received for its authenticity.

Our professional lawyers will help you to understand these processes in detail, thanks to which opening an account in a foreign bank becomes an easy and affordable opportunity for everyone, both individuals and legal entities.

When starting a business relationship with a bank, a financial institution will establish your identity, the origin of capital, the purpose of opening an account in a foreign bank, the banking services you are interested in, what preliminary transactions are planned for accounts, what activities the company is engaged in, its annual turnover and business partners.

Previously, to open an account in Europe (and to open an account in foreign banks in general) only a small set of documents was required: identifying documents of the beneficiary and account manager (internal passport of a citizen) and company documents, but now this is not enough and banks want, as you can get to know the client better.

Conventionally, all banks can be divided into two types according to the criterion of customer identification: with a simplified and enhanced due diligence procedure.

A simplified due diligence procedure (a small number of European banks, banks in Turkey, Georgia, Belarus, and Belize, and payment systems) involves the following package of documents:

• original passports of the attorney and the beneficiary;
• originals of the company's founding documents;
• a detailed description of the company's activities (business plan);
• copies of documents on the company's activities: bank statements, contracts, invoices (if the activity was carried out before);
• utility bill, which confirms the place of residence of the beneficiary/account manager;
• bank recommendation;
• a detailed resume (biography) with information about the education, type of activity of the client, information about the company, the legality of the origin of capital, etc.

With an enhanced due diligence procedure, according to which most European banks work, in addition to the above list of documents, documents confirming the source of income (wealth) of the beneficiary will be required. It could be:

• an extract from a personal account to which the salary is attached or a certificate from the enterprise on the payroll;
• copies of declarations submitted to the tax service;
• confirmation of the existence and receipt of inheritance;
• confirmation of funds received as a gift (donation);
• copies of contracts for the sale of property;
• all company documents, including account statements, declarations, and dividend payments, if the beneficiary is the founder of the enterprise;
• declarations extracts from the Registers of Entrepreneurs, and account statements if the beneficiary is a private entrepreneur;
• bank certificate on the presence of deposits;
• or other similar documents that can confirm the legality of funds.

It is worth remembering that each foreign bank may request additional documents, according to the internal requirements of the institution and jurisdiction.

The list of all foreign banks where it is possible to open an account for a non-resident can be found here.