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Bank account for high-risk business in 2021

Account opening for high-risk business in 2021

22. 10. 2021
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It is not easy for businesses that are engaged in legal but risky business to open an account. Banks are wary of businesses that can bankrupt a company in the blink of an eye, and they don't want to work with such organizations. Today we'll talk about opening an account for high-risk businesses in 2021.

What is high-risk

High-risk are risky businesses that, on the one hand, generate high returns, but on the other hand, can cause instant collapse. This group includes trading on stock exchanges (e.g. Forex), casinos, adult, sale of medicines/food supplements, alcohol/cigarettes, etc.

Banks define a risky business by the following characteristics:

  • startup - a new business or project;
  • high repayment rate;
  • financial difficulties;
  • bad credit history - non-payment of debts or untimely repayment;
  • the company sells goods / services to high-risk countries - Afghanistan, Cambodia, Pakistan, Uganda, etc.;
  • questionable origin of goods/services;
  • the company provides inaccurate information about its operations, operating addresses, etc.;
  • monetary transactions differ from the reported activity.

The list is inconclusive, as each bank or payment system is guided by internal rules, as well as risk/return readiness.

Why is it difficult to open a high-risk account

It is difficult for companies that engage in high-risk activities to open an account. The main reasons are the unpleasant situations the bank faces in such cases:

  • disputes over chargebacks;
  • complicated legal disputes;
  • money laundering;
  • risk of a fine for operating a casino if gambling is prohibited in the country;
  • fraudulent transactions by both customers and the company itself.

The above-mentioned risks may lead to a fine by regulatory authorities. Banks value their licenses and clients' trust and do not want such risks. That is why institutions, which agree to open a bank account, charge a higher rate.

Characteristics of the bank / payment system which works with high-risk

A company with a high-risk business must open an account with a payment system or bank that provides acquiring services - accepting non-cash payments from cards. The bank / payment system must meet the following characteristics:

  • quickly execute documents;
  • do not require a visit of the beneficiary to the branch;
  • allow the beneficiary to open an account remotely;
  • do not ask any additional questions; ask only about the organizational aspects;
  • have a high level of reliability and trust;
  • not to set limits, not to require a minimum balance on the account;
  • offer low rates for services;
  • not to demand the documents to confirm the transfers.

Documents for account opening

You should choose the bank that asks for the minimum package of documents:

  • certificate of registration;
  • register of shareholders, directors;
  • articles of association;
  • license;
  • personal documents;
  • business plan.

Copies of documents must be notarized and translated into English.

Stages of account opening

  • Choosing the bank/payment system that is reliable and provides a suitable tariff.
  • Submitting an application to open an account with documents.
  • Talking to the bank (if necessary).
  • A risk assessment by the bank, decision making on the application.
  • Providing access to the account - if you get a positive answer.

List of banks that open accounts for risky businesses

There are many reliable banks that work with high-risk businesses. The list includes:

If you find it difficult to choose a payment system to open an account for high-risk activities in 2021, the IT-OFFSHORE specialists will find the right option for you.

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