How to prevent the bank from refusing to open a corporate account?
A corporate bank account is necessary for every company that plans to operate in Russia and abroad. Its availability ensures that there are no difficulties in communicating with contractors, tax authorities and law enforcement agencies. Unfortunately, it is not uncommon to refuse to open a bank account abroad. Tougher requirements for clients are associated with a global policy aimed at combating terrorism, tax evasion, and financial fraud.
Reasons for refusing to open an account
A financial institution has the full right not to disclose the reasons for refusal to cooperate. The bigger and better the bank is known to be, the more demands it has. Banking security services have a certain list of criteria that are "alarming" and reduce the chances of obtaining a positive decision:
- the minimum authorized amount of the company's share capital;
- fictitious director and secretary, as well as legal and actual addresses (if not allowed by the legislation of the jurisdiction);
- tax debts, credit obligations and international contracts;
- the firm's presence in the EU blacklist or its proven bad reputation;
- belonging of beneficiaries, founders, top managers to the sanctions lists and the list of public persons;
- type of business classified as high-risk.
The willingness of a potential client to provide additional documents upon request and to fill out questionnaires using the bank form is of great importance. Support of qualified IT-OFFSHORE specialists will help reduce the probability of refusal.
We work with the largest banks in Europe and Asia, and we know their requirements and peculiarities, so our clients get approval to open an account in 95% of cases.
General scheme of bank verification for the purposes of "Know Your Client" program
Two "whales" of banking security around the world are KYC and AML. Know Your Customer or Know Your Client literally means that before almost any procedure the bank has the right to request from a person or entity detailed information about the person and the purpose of the planned transaction.
KYC policy may include additional verification by SMS code, biometric identification methods, control of transactions and setting limits on their execution. Anti-Money Laundering or is used for the purpose of eradicating terrorist financing.
If a company prefers to make cash payments, keep funds in several accounts in different banks and countries and invest in its own subsidiaries, the bank security service is likely to have questions.
Foreign banks value their reputation and are sometimes too responsible for screening their potential customers. At the first stage, the company's policies and operating principles are analyzed, which is why financial institutions often request a business plan for analysis. Then detailed identification is carried out: the legal person is checked on belonging to the organizations connected with the terrorist activity; the affiliated physical persons also pass several tests.
At the last stages, a special department assesses the level of riskiness of the business and makes a final conclusion. In case of a positive decision on opening a corporate account, the bank reserves the right to periodically monitor its operations.