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How Can a Foreigner Open a Business Bank Account in the UK?

How Can a Foreigner Open a Business Bank Account in the UK?

So you’re searching for a business bank account in the UK.

Of course. The UK is well-known for its extensive, world-leading financial services. Indeed, it’s the financial capital of the world.

But being a non-resident foreigner, you wonder if your application for a business bank account would be accepted by a traditional high-street bank.

Fret not. There are options for a non-resident foreigner — let’s see how to open a UK business bank account for your company.

This article at a glance:

Opening a business bank account can be challenging for non-resident foreigners of the United Kingdom. That’s because UK residency is usually required by traditional British banks. The problem is that you’re a limited company — you need a business bank account. Virtual banks are one of the most convenient options for entrepreneurs, as onboarding is fast and banking services are offered fully online.

Do sole traders and freelancers need a business bank account?

Sole traders and freelancers aren’t legally required to have a separate UK bank account.

The UK’s tax authority, Her Majesty’s Revenue and Customs (HMRC), states that, while business transactions records must be kept separate from personal transactions, sole traders and freelancers don’t need a different business bank account. With that being said, having a separate business account makes your life easier when tax seasons comes around.

But using your personal accounts for your sole trader or freelance business purposes is still subject to your bank’s terms and conditions — essentially, certain banks prohibit their customers from doing so.

Do I need a business bank account for my limited company?

All limited companies registered at the Companies House are legally required to have a dedicated business bank account.

Legally-speaking, a limited company has its own legal obligations and finances — being a separate, distinct legal entity. However, it’s not mandatory that a UK company holds a UK bank account — you may choose to maintain your own business bank account outside of the UK.

As we’ll explore, there are innumerable advantages to opening a UK business bank account as a non-resident foreigner. Save time. Build your credit rating. Look professional in the eyes of suppliers and clients. Gain access to more business support, tools and resources.

Pros and cons of opening a business account as a non-UK resident

Pros of opening a business account as a non-UK resident:

1) Ease of managing finances: A business account helps in keeping business finances separate from personal finances and enables efficient tracking of income and expenses.

2) Access to banking services: Non-UK residents can access a wide range of banking services such as merchant services, international money transfers, and overdraft facilities.

3) Improved credibility: Operating with a business account can help to improve the credibility of a company among customers, suppliers, and other stakeholders.

Cons of opening a business account as a non-UK resident:

1) Complex process: Opening a business account as a non-UK resident can be a complex process that involves extensive documentation and identification requirements.

2) Limited options: Some UK-based banks may not offer business accounts to non-UK residents, so the options available may be limited.

3) Higher costs: Banks may charge higher fees for non-UK resident accounts due to the additional compliance and due diligence requirements.

Can a foreigner open a bank account in the UK?

I’ll be honest, it’s not easy for a foreigner and non-UK resident to open a UK business bank account.

For one, there are strict anti-money laundering regulations in place in the UK. Most British high-street banks either don’t offer business bank accounts for non-UK residents, or make it difficult to open one.

The challenges are plain to see. A high level of background and credit checks. Close scrutiny on non-resident directors.

Obviously, working and living in the UK is the best way for the high-street banks to offer you a business bank account as a foreigner.

Your next best alternative is to bank with an international institution that has a presence in both your country of residence and the UK, such as HSBC, Citibank and Santander. They might be able to offer you a specialist UK business bank account for non-residents. Another option is virtual banking for your business, which we will cover later below.

How do I open a business bank account for a non-resident?

This can vary depending on the country where the business will be established and the requirements of the chosen bank. In general, the following steps may apply:

1. Research and choose a bank that offers business accounts for non-residents.

2. Check the bank’s requirements for documentation, such as proof of identity, proof of business registration, and other relevant documents.

3. Prepare the necessary documents. This may include a passport or other government-issued identification, proof of business registration, tax identification number, and other relevant documents.

4. Contact the bank to inquire about their account opening process and schedule an appointment.

5. Bring the required documents with you to the bank appointment.

6. Complete the account opening application forms and provide the required information.

7. If approved, deposit the initial funds required to open the account.

Please note that the process and requirements vary greatly among banks and countries. You may wish to consult with a banking specialist or legal advisor who has experience in setting up business bank accounts for non-residents in your country of interest.

How to compare business accounts for non-UK residents

As a non-UK resident, finding the right business bank account can be challenging. To help you make an informed decision, we recommend comparing the options available and paying close attention to the following:

  • Fees and Charges: Business accounts can be expensive, especially when currency exchange is involved. Make sure you understand the costs of maintaining the account and carrying out transactions.
  • Application Process: Ask about the estimated timeframe for application processing and be sure to shop around if the wait seems too long.
  • Online Management: In today’s digital age, even traditional banks should offer robust online account management services. Be sure to check for this feature when comparing options. For more information on UK business accounts and comparisons, visit our website.

What are my options as a non-UK resident to open a business bank account?

As a non-UK resident, consider these options when trying to open a UK bank account:

  1. UK banks. Although the process and criteria are stringent, it’s possible for a UK non-resident to open a business account with traditional UK high-street banks. Usually, the non-resident director must visit a UK bank branch in person, or deposit and maintain a minimum amount of money, to open a business account. Terms and conditions vary from bank to bank — enquire at the banks for more information (e.g. HSBC, Lloyds, Royal Bank of Scotland, Barclays, etc).
  2. Banks with branches both at your location and in the UK (e.g. Bank of China and Union Bank of India). Check whether these banks offer international business bank accounts that could be used in the UK. The fees that they offer might be higher than UK banks and virtual banks, but they’re worth looking into if you have a good and longstanding working relationship with your local bank.
  3. Online payment platforms and virtual banking accounts (e.g. Monese, TransferWise, Silverbird, Revolut, etc.). These online payments and banking platforms are a viable solution for entrepreneurs and business owners who are non-UK residents. Just like regular UK banks, they issue UK bank account numbers, sort codes, and IBANs.

Most of the virtual banks and payment platforms also issue credit cards, and allow HMRC VAT refunds to be credited into the accounts. You can send and receive payments, withdraw money from an ATM, make bank transfers, and connect to marketplaces like Amazon to receive payments.

What are the benefits of a virtual bank account?

Virtual banks don’t have physical branches, reducing costs in the form of rent and staff salary. They pass on these savings to their customers, and so offer more competitive exchange and transfer rates compared to traditional banks.

Additionally, they also handle accounts in multiple currencies and across different channels — sending and receiving payments with a Silverbird international business account can be done almost instantaneously.

Virtual banks are fully online, offering flexibility to business owners to complete their transactions anywhere and anytime. Setting up a virtual business account with Silverbird, for example, can be done 100% online, onboarding takes a matter of days — not weeks — and a non-resident company director doesn’t need to visit a UK bank branch in person to open one.

What are the features of a virtual bank account?

Virtual banks employ a digital-first strategy to banking. These are some of the common features of a virtual bank account:

  • Easy Account Opening. Setting up an online bank account is usually done in minutes, and you could use the banking services quickly, usually after submitting your ID for verification.
  • Electronic Statements. There are no paper statements issued, which is both environmentally-friendly and easier to access for users, since all past transactions are just clicks away.
  • Alerts and Notifications. Users receive alerts and notifications immediately (if they opt for this) for their transactions.
  • Regular Banking Services. UK virtual banks offer a UK bank account number, sort code, and IBAN (International Business Account Number), just like a regular bank.
  • Quick payments and transfers. Sending (e.g. to suppliers or the HMRC), and receiving payments (e.g. from online marketplaces like Amazon and eBay), and making bank transfers are a breeze. Credit or ATM cards may be issued too which you could use to withdraw funds in and outside the UK.

What are the required documents to open an online business account?

If you want to open a Silverbird multi-currency account, for example, these documents are required from all ultimate beneficial owners, directors, or legal representatives of your company:

  • Identification (Driving License, Passport, etc)

In some jurisdictions, they may ask you for more documents, including:

  • Certificate of incorporation
  • Application to register a new company
  • Bank statements
  • Annual Returns
  • Invoices

Yes. It’s really that simple.

How to manage your business account from abroad

Managing a business account from abroad requires access to the internet and the right tools to stay connected with your team and your financial transactions. Here are some steps to manage your business account from abroad:

1. Use Online Banking: Check if your bank supports online banking services and set up an online bank account. This will allow you to monitor your finances, check your account balances, make payments, and transfer funds from anywhere in the world.

2. Use Cloud Accounting Software: Use cloud accounting software such as QuickBooks, FreshBooks, or Xero that allows you to manage your finances, create invoices, and track expenses from any location with an internet connection. By using cloud-based software, you can also give your bookkeeper or accountant remote access to your financial reports.

3. Use Communication Tools: Stay connected with your team and clients through communication tools such as Skype, WhatsApp, Slack, and Zoom. These tools will enable you to have meetings, communicate with your staff, and update customers on your business.

4. Plan Ahead and Stay Organised: Set up alerts for upcoming bills, payments, and other financial obligations that require your attention. Keep track of deadlines, receipts and reports, and keep them organized digitally so that you can access them from any location.

5. Hire a Virtual Assistant: Consider hiring a virtual assistant who can help you manage day-to-day tasks, such as responding to emails, scheduling appointments, and making phone calls.

6. Ensure Security: Protect your business account and financial information by using secure networks and avoiding public Wi-Fi. Use a VPN when connecting to public Wi-Fi networks to ensure secure and encrypted connections.

How long does it take to open a virtual business account?

The time that it takes to open a virtual bank depends on each EMI (Electronic Money Institution). Usually, you can open a virtual business account in minutes. However, your access to the banking services would be granted within a few days, after identity and document verifications.

At Silverbird, your international business account opening is simplified and no branch visit is required. You don’t need to send in any paper documents either. You would submit your application online, the processing of which takes minutes, and our team will contact you within a few business days to welcome you onboard. Contact us today to discuss with us your business' banking needs.

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