Opening an account abroad. How to open an account abroad
Many Russians are wary of the domestic banking system and seek to open an account abroad. However, before concluding an agreement, it is necessary to clearly understand which bank can be considered foreign.
Credit and financial institutions operating in Russia that were opened by international banking groups, or banks with foreign capital, cannot be assigned to this category, since they are issued a license to carry out activities central bank Russia, and their work is fully regulated by Russian law. In addition, the reliability and stability of such financial institutions are not comparable with those of parent companies. Therefore, citizens of the Russian Federation who wish to open a deposit abroad must choose an organization with foreign jurisdiction. At the same time, Russians do not have to leave the borders of their country: some banking institutions allow sending documentation by mail.
What to look for
Citizens who plan to place money abroad on condition of anonymity may face difficulties. In the framework of the total fight against dirty money, foreign credit and financial institutions have significantly tightened the requirements for customers, so it is quite difficult to ensure complete anonymity of the deposit.
For example, the legislation of the Republic of Cyprus prohibits the opening of numbered bank accounts. In addition, if a money transfer was made in favor of the client by the sender, information about which is missing or only his code is available, Cypriot bankers are entitled to credit funds after receiving from the correspondent bank full information about the person who transferred the money.
What the law says about it
Can a Russian citizen open an account with a bank abroad? Yes, current legislation does not provide for a ban on storage by residents of the Russian Federation money in bank accounts abroad. Moreover, in recent years, the procedure for opening deposits has been significantly simplified. If earlier for this operation it was required to obtain a special permission from the CBRF, today most Russians can become a client of a financial institution operating under foreign jurisdiction (the exception is the categories of citizens defined by Federal Law No. 79-FZ).
In this case, the law clearly defines cases when a Russian citizen has the right to place funds abroad. It:
- opening a deposit in order to accumulate personal funds;
- investment.
Placement of funds for business purposes is prohibited.
There are some restrictions on states with which banking institutions are allowed to cooperate. Countries where funds can be freely deployed are members of the international organizations Organization for Economic Co-operation and Development (OECD) and the Financial Action Task Force on Money Laundering (FATF).
Deposits by residents of the Russian Federation in banks of countries that are not members of these organizations are opened in the manner established by the CBRF. Decree No. 1411-U of March 30, 2004 contains a requirement for the preliminary registration of such accounts. However, the registration procedure itself is still missing. Therefore, if one is formally guided by the rule “everything that was not forbidden is allowed”, residents of the Russian Federation can place money in banking institutions that are under any jurisdiction. However, there is a risk that the court may interpret this situation somewhat differently.
The procedure for opening accounts in foreign banks
To decide where to open an account, it is not necessary to study at a business school. It is necessary to carefully study the features of the chosen jurisdiction, the proposals of foreign credit and financial institutions, get acquainted with their reputation, data on their stability, credit ratings and forecasts. Having chosen the appropriate option, you should proceed to the opening of the deposit. You can do this yourself or with the help of special agencies. The cost of agency services can range from several hundred to several thousand dollars.
There is no time frame for the operation - the procedure for processing a deposit can last from one week to several months.
Citizens who are independently engaged in registration must collect required package documents, fill out registration forms (in a foreign language) and personally visit the bank. After checking the submitted package of documents, the financial institution will notify the citizen about the possibility or impossibility of opening a deposit.
Persons who use the services of intermediaries do not have to make a foreign trip and personally visit the bank. Investors must provide the agency with a package of necessary documents and samples of their signatures certified by the consulate of the country under whose jurisdiction the selected bank is located.
However, cooperation with intermediaries does not mean at all that the depositor will not have to go through an interview with representatives of a foreign financial institution. Many banks provide for communication with a potential client via video or telephone. It may also be necessary for the contributor to provide letters of recommendation from foreign business partners.
Required documents
The list of documents required to open a deposit from a resident of the Russian Federation may vary and depends on each specific bank. The average package of documents includes:
- passport of the depositor, as well as members of his family (spouse / children and children);
- certificate of the amount of income received for the last 6-12 months;
- certificate of family composition;
- a certificate stating that the depositor is not under investigation issued by the police.
The most stringent requirements for potential customers put forward the financial institutions of the United Kingdom. Bankers from the UK may require a variety of additional documents, including paid utility bills that show the address of the depositor and the name of the depositor, as well as letters of recommendation on the citizen’s trustworthiness written by his employer or a Russian bank.
Who is considered a resident in the currency legislation
Foreign currency residents of the Russian Federation are: persons who are Russian citizens, as well as stateless persons who have received a residence permit and citizens of other countries who permanently reside in Russia.
Account Opening Notification Obligation
Residents of the Russian Federation who have placed their funds in banks located in other countries are required to notify the tax authorities about opening accounts. Notification of the transaction must be sent within a month from the date of opening the deposit. There is also a requirement for a mandatory notification within one month of tax authorities to close an account.
Citizens can send reporting documents:
- personally visiting the tax office;
- a letter of receipt of delivery;
- online through a personal account on the website of the Federal Tax Service (electronic signature is required).
The requirement for mandatory notification of tax authorities was legislatively fixed several years ago. Nevertheless, today this norm does not fully work, since a uniform procedure and form of notification have not yet been developed. Therefore, some investors at their own peril and risk ignore the requirement and do not inform the FTS about foreign accounts.
Cash flow statement
Residents of the Russian Federation who have opened a deposit abroad are entrusted with the obligation to provide the tax authorities with a statement of cash flows on the account. This report shows the balances at the beginning and end of the calendar year, as well as the amounts credited and debited from the account. Apply any additional documents no report required. However, in addition to the report, tax authorities may require the depositor to provide a bank statement, which details the funds received as a result of various operations. This document will allow you to determine how many thousand rubles were transferred to various legal entities.
Administrative responsibility (responsibility for failure to submit or late filing of documents)
Residents of the Russian Federation who did not notify the Federal Tax Service about opening an account with a foreign financial institution or filed a notice in violation of the deadlines, as well as citizens who did not provide or submitted a report on the movement of funds late, can be held administratively liable. The amount of fines is:
- for failure to notify - from 4 to 5 thousand rubles;
- for violation of the deadline for the provision of a notice - from 1 to 1.5 thousand rubles;
- for failure to submit a report - from 2 to 3 thousand rubles;
- for violation of the deadline for submitting the report - from 300 to 3 thousand rubles.
Who is forbidden to open accounts abroad
In order to ensure the national security of Russia, Federal Law No. 79-FZ of July 27, 2004, forbids certain categories of citizens from storing funds in banking institutions located outside the country. These categories include:
- persons who hold high government positions;
- members of the board of directors of the CBRF;
- top managers of state-owned companies;
- citizens appointed to the post by decree of the president, government and prosecutor general of the Russian Federation, and other categories.
The prohibition also includes minor children and spouses of persons referred to in article 7.1.
Persons who violate the prohibition are subject to dismissal from their posts or dismissal from work due to loss of confidence.
Where and how to open an account
Residents of the Russian Federation who are not subject to the ban are given the right to open deposits in foreign banks under any jurisdiction. The most popular banking jurisdictions among Russians are:
- Cyprus;
- Latvia;
- Switzerland;
- Hungary;
- Czech Republic;
- Montenegro
- Hong Kong;
Foreign banks
Many financial institutions operating abroad set minimum limits on the amount of deposits placed by citizens of other states. Practice shows that serious banks rarely open deposits for foreign clients who place less than 50 thousand dollars on their accounts, and Swiss financial institutions specializing in private banking are open for cooperation with individuals who place at least 100 thousand dollars.
Bilderlings
An alternative to depositing with foreign banking institutions may be opening a European and British account with individual details (IBAN) c. The innovative fintech platform, which offers various types of banking services, operates on the basis of an electronic money issuer license issued by the British financial regulator FCA. Having a license gives you the right to open accounts, process payments and use other financial instruments. At the same time, unlike traditional banking institutions, Bilderlings does not use customer funds to issue loans and finance its own activities.
The main advantages of Bilderlings are high-class service and high speed service. If opening an account for a resident of the Russian Federation by a foreign bank can take from a week to several months, then conducting a similar operation in Bilderlings takes no more than one business day, and also does not involve the provision of a large package of documents.
Account holders at Bilderlings have the opportunity to accept and make unlimited payments from all over the world (more than 100 countries), as well as conduct transactions on the exchange of euros, dollars and other currencies at the interbank rate (21 currencies in total).
How the Russian authorities look at it
Simplification of the procedure for residents of the Russian Federation to open deposits in foreign banking institutions can be regarded as loyalty by the authorities. However, the outflow of funds from the Russian financial system not welcomed by the government. Despite the permission provided by law, currency operations may be considered by the Federal Tax Service as potentially risky, which is why this issue is constantly monitored by the tax authorities.
Is it profitable to have an account abroad
What are the preferences for Russians opening a deposit in a foreign bank? To get an answer, including statistics, this will help. In Switzerland, one of the most popular banking jurisdictions, since the beginning of the 21st century, no more than 60 financial institutions have ceased operations, while in Russia over the past 8 years, more than 400 banks have gone bankrupt. At the same time, the Swiss authorities and the authorities of European countries quickly respond to the occurrence of problem situations in banking institutions and immediately use effective tools to keep banks afloat.
It should also be noted the guarantee of confidentiality, the orientation of foreign bankers to long-term cooperation with customers, an individual approach to each investor and the quality of asset management.
Opening a foreign account at Bilderlings: step-by-step instructions
To open an account with Bilderlings, the depositor needs to register on the site with an email address, phone number and password. Next, the investor should fill out an online application form, and then submit to in electronic format minimum package of documents, which includes:
- Copy of passport.
- A copy of the proof of residence.
Also, the depositor must send an electronic photo (selfie), on which he is captured with his passport.
Opening an account is carried out after the depositor has provided all the necessary documents and takes no more than one business day.
Where can I get legal advice
You can get a comprehensive consultation on opening an account after registering on the Bilderlings fintech platform. Each registered user is assigned a personal manager who is ready to answer any financial questions.
You can also contact Bilderlings representatives by phone, email, and social media. It is not the chatbot or call center employee who is involved in customer service, but a highly qualified financial specialist.
The scandal around the Panama Archive does not abate in the world - during the leak of information it turned out that politicians and businessmen were withdrawing money to offshore companies of this country. Among them were friends of Vladimir Putin. that these people withdrew about $ 2 billion from the country.
Not only influential people can place money abroad: many banks work with non-residents, however, the conditions for them are somewhat different from the rules for citizens of the country. Deposit rates of European banks are much lower than in Russia, and it is not very convenient to transfer money from country to country. However, Russians nevertheless carry money to Western banks, not trusting Russian credit organizations and fearing the introduction of new barriers to the conversion of rubles into foreign currency. The Village learned about the features of opening foreign accounts and talked with one of the contributors.
Where and how to open an account
Not all banks are ready to open ordinary settlement accounts to foreigners. Many of them require that such a person have a residence permit in the country or other justification for the need for an account like the availability of real estate. For example, most Scandinavian banks - Swedbank, DNB - also do not open accounts for Russian citizens without reason. The same is true for Singapore. “And, for example, in the UK, even if you have a student visa, opening an account is almost impossible,” says Alexey Pospekhov from Futur Capital. “For this, several startups in the field of finance are now launched, aimed at“ migrants ”, which include Russian citizens.”
According to Pospekhov, almost the only bank in Latvia that is actively working with Russians both in business and in personal finance is Rietumu Banka. “They have their own processing and many other goodies,” he notes. Remote account opening there will cost 250 euros - then the card will be delivered by courier to Russia. From it you can transfer money to a card of other European banks, as well as to Russia by sWIFT system. In addition, the bank helps foreigners obtain a residence permit in Latvia.
The Baltic States is perhaps the only place in Europe where a Russian can open an account in small amount. In other countries there is a high entry threshold for opening a deposit by foreigners - from 50 thousand euros. The list of credit organizations willing to work with you is expanding significantly if you are ready to deposit more than 100 thousand dollars into your account. Well-known banks like Credit Suisse, UBS, Barclays will be ready to deposit over a million from a foreigner without a residence permit, said Konstantin Ziyatdinov, head of the international projects department of the Prime Advisory consulting group. More democratic conditions are offered by Chinese banks - for example, Bank of China or ICBC. Opening an account will require only 20 yuan (about 200 rubles), and the entry threshold does not exceed a thousand yuan, said MTKK Greenwood Oleg Tkach.
Permission to open an account is issued by the bank manager abroad. And he may have many different reasons why he may not give it. Almost always it is necessary to prove the fact that the funds were received legally. There are situations when one manager refuses to open an account, and when considering the application later, another manager approves it, says CEO of Fast Lane Group in Russia and the CIS Vladimir Knyazhitsky. Therefore, when opening an account, Russians need to understand that this is a rather long process that requires a personal visit (most likely, not one). In some cases, you can open an account by proxy, for example, a lawyer. But it is necessary to clarify the closing conditions: in many banks, you can close the deposit only in the office where the account was opened, or at least in the same country. When choosing a bank, it is also worth clarifying what deposit guarantees the country gives and what minimum deposit balance the bank wants to see (for non-residents it is usually high).
How the Russian authorities look at it
“Russian residents are free to open accounts and deposits in any foreign banks. The only thing that needs to be done is to notify your tax office about this fact within 30 days after opening the account, otherwise you may be fined up to 5 thousand rubles, ”says Konstantin Ziyatdinov. After opening an account, a tax report on cash flow should be submitted annually (essentially four figures - the balance at the beginning and end of the year and the amount of write-offs and credits for the year).
Unfortunately, Russian currency legislation severely limits the list of operations by which funds can be credited to such a foreign account of an individual, Ziyatdinov complains. Failure to comply with these requirements entails draconian fines in the amount of 75 to 100% of the amount of operation not prescribed by law.
How profitable is it
“Withdrawing cash is generally a big headache, despite the so-called SEPA,” says Pospiehov. Single European Payment Area - a single zone of European payments, which includes the euro area, as well as Hungary, Poland, the Czech Republic, Romania, Bulgaria, Sweden and Denmark. If you have opened an account in Italy and are withdrawing money in Sweden, a commission may be charged in accordance with the rules of the bank.
For interest-free withdrawal Pospekhov advises using Russian cards and accounts. The same Sberbank has ATMs in many countries of Eastern Europe - there is no fee for withdrawing money from them. You can also use the services of Citibank. “This is the largest international bank, it is represented in more than a hundred countries of the world and also does not charge ATM fees from its cards,” says Oleg Tkach, MTVC Greenwood’s financial director. In his opinion, the benefit of deposits abroad is doubtful. Investors here pay not only for opening an account, but also tangible income tax. In Switzerland, for example, it is 35%.
“Interest on deposits is completely insignificant by Russian standards,” says general director GC "Fast Lane" in Russia and the CIS Vladimir Knyazhitsky. This may be 0.25% per year, and if the account currency is not native to the country, then interest is often not charged. So make money on bank deposit in developed countries it is almost impossible - rather, it will be small losses in the form of commissions for transfers and for servicing an account, Knyazhitsky summarizes.
But opening accounts in foreign banks is rarely dictated by the goal of obtaining increased returns or to obtain a better level than in Russia banking services. Rather, it is about confidentiality and independence from the Russian banking system and the associated "country" risks, says RB Partners partner Alexander Lukin. For example, many opened accounts for fears that authorities would impose restrictions on cross-border transfers and currency conversions. In addition, foreign accounts provide access to international investment products, and when buying and servicing real estate, you can avoid losses during conversion.
Inna Alekseeva
cEO of PR Partner
Personal experience
Last year I opened an account as an individual in two Spanish banks, I chose those that allow you to do this without an identification card, that is, roughly speaking, I opened an account as a non-resident.
I was considering the possibility of having a second child in Barcelona, \u200b\u200bso I needed to have about 10 thousand euros on my account. The bank requested data on my salary in Russia - I translated and certified a 2-NDFL certificate as well as a dividend certificate from a notary. Then I transferred a thousand euros to the bank for a whole year every month to show my trustworthiness. If I want to transfer a large amount, for example, 90 thousand euros for studying at a business school, then I will also need a certificate explaining where the money came from.
Bank employees immediately warned me that if I suddenly want to withdraw the accumulated amount, I can’t do this without justifying where and why. In my case, the justification could be an account and a certificate from a local hospital-maternity hospital. In the same way, you can pay for a business school, language courses, travel around the country and more. So far I have not needed an account, but if that, it works.
Most often, businessmen open accounts in foreign banks. But not only they - among those who decided to withdraw their honestly earned money abroad, there are also enough individuals. For example, almost 15% of depositors of “bourgeois” banks are ordinary citizens who have drawn up a mortgage abroad. There are also enough students who went to study at European universities. It is more convenient to serve them in local credit organizations than to do business with domestic ones.
Why is an account abroad good?
Foreign banks are more reliable. This is an axiom that entrepreneurs do not dare to challenge now. They seem even more reliable and safe after the winter crisis, when the Russian banking sector suffered serious losses. Suddenly this will happen again? Of course, such a collapse can happen in Europe, but the probability is small.
A high level of privacy is another major plus. You do not want greedy tax officers and other official and unofficial robbers to be aware of your financial affairs? Hide these matters abroad. The Council is relevant for both entrepreneurs and individuals.
Well, perhaps the main advantage is prestige. A foreign bank account is an indicator of “successful success”. And just getting a notification in English about the receipt of funds is very nice.
Which bank to choose?
When choosing, pay attention to several factors:
- reliability rating should not be lower than “A”;
- adequate (not too biased) requirements for the investor - abroad they very meticulously check the origin of the money;
- the cost of service - if you are not a dollar millionaire, 1000 euros per year for service (plus commission, notification by mail and other options) in Swiss banks is unlikely to be affordable for you;
- convenience of replenishment - it is desirable that the bank supports as many ways of crediting money from individuals and legal entities to the account as possible;
- the presence of additional functions and capabilities (for example, investing in pension funds or in securities reliable and successful companies).
It is difficult to advise a specific bank - it all depends on what you want to receive. Swiss banks traditionally considered elite. Austrian, German and Danish are the most “stable” and reliable. In banks of the Baltic states, they communicate with customers, including in Russian, and the cost of service is low. The most difficult thing is to open an account with a British credit institution - they will require a whole volume of documents from you and will carefully and double-check everything (and then refuse anyway).
Do I have to go to another country?
Theoretically, in Russia there are representative offices of foreign banks. In practice, their relationship with “parent” credit organizations is minimal or even nominal. But to contact such branches with a request to open an account abroad is still worth it. There is a chance that you will be helped at least by consultation (especially if you plan to invest from 10,000 dollars or euros at once).
The foregoing applies primarily to Western European banks. If you are going to contact any of the Baltic countries, there is no problem - just come to their Moscow office. And you can also use the services of intermediary firms that take most of the care upon themselves. They can arrange a personal meeting with representatives of the bank (in the same Moscow).
But if you have chosen a serious European organization and decided to do everything personally, you will probably need to go to the West. Persons sending an application with documents by mail are not welcomed by foreign bankers.
Maybe through intermediaries?
The market is full of companies with which you can create a "foreign account". They have established contacts with banks, and they also organize negotiations with foreign managers, help with the preparation and translation of documents, and take on all the routine processes. This is convenient - you can just pay and wait for a notification to sign an agreement with the bank. There is only one problem - there are a lot of scammers among such "intermediary" legal entities. Fraudsters can also open an account for you, but then the truth will be revealed, and Europeans will react extremely nervously to such schemes.
Especially carefully you need to choose an intermediary company if you are a businessman who has decided to withdraw funds to an offshore. As a rule, unscrupulous firms attract customers with a low price. But the reckoning is harsh - in case of failure you will lose all the money spent on opening an account. Reputable firms will never work abroad with a "third-party" offshore.
A little more about offshore
In any case, you need a company registered abroad. Many of the offshore companies, by the way, are created only for conducting operations on the account and ownership of foreign assets. The easiest option is to buy a ready-made legal entity. You turn to a specialized intermediary company, and within a day you will receive a notification about the transfer of the company to your property. And you can register your LLC on the offshore. This will be a great solution if you are really going to do business abroad.
Option for individuals
What if you are an ordinary citizen, you have nothing to do with business, but decided to open an account with a foreign bank yourself? To get started, contact the selected bank (the easiest way to do this is by e-mail) and specify what documents they require. List binding securities It looks something like this:
- russian and foreign passports;
- income statements;
- information on the composition of the family, the activities of households and other related persons (Europeans do not like officials and politicians);
- certificate of no criminal record;
- a letter of recommendation from a client of this bank (and preferably from several).
All these papers must be translated into English and certified by a notary. They must be submitted either to a representative of a foreign bank in Russia (if it is possible to agree on this), or directly to an office abroad. The terms for opening an account by an individual depend on the laws of the country and the internal rules of the bank. In the worst case, you have to wait about a month, at best - just a couple of days. When the account is open, be sure to send a corresponding notice to your native tax authorities (this takes 30 days).
That's all, from now on you can use your account abroad at your discretion (but only for personal purposes). The Central Bank will no longer be able to dictate its terms to you, and this - agree - great!
25.06.2018
Foreign banking for non-resident clients has recently become a constant source of news. And if some of them turned out to be quite predictable (especially for those who in one way or another used the services of foreign financial institutions over the past years), then others will still have to get used to.
If earlier banks fought for a future client, offering the best conditions, and clients could afford a choice of many options, now banks carefully select a “suitable” client, taking into account a variety of factors - from the jurisdiction of the company to the business biography of its beneficiary and the law of origin his funds. Under the pressure of international organizations and national regulators in the field of banking services to non-residents, there is a constant "tightening of nuts."
Nevertheless, a foreign bank account has been and still remains an indispensable tool in international business, since the task of opening a bank account arises for almost everyone who registers a business abroad or expands its borders. Therefore, further - about everything in order.
Why do I need a foreign bank account?
Corporate Account in a foreign bank is necessary for convenience of calculations companies with their business partners (customers, suppliers), accumulation of monetary assets, payment of mandatory payments, maintenance salary projects, use of corporate bank cards, etc. Such an account can be opened both in the same country in which the company is registered, and in another country or countries.
One of the most important advantages of opening a foreign account for a foreign company (and not for an individual) is lack of currency restrictionsstipulated by the Russian legislation for currency residents of the Russian Federation. To foreign companies do not apply obligations to notify tax authorities about opening a foreign account, submitting reports on the movement of funds on the account, as well as restrictions on crediting funds to the account.
For citizens personal foreign account needed in the case of employment or obtaining a residence permit abroad, ownership of foreign real estate and in many other cases. In addition, many customers simply decide to keep and / or invest part of their funds abroad in order to preserve or increase personal or family capital. Only for certain categories of citizens (senior officials, civil servants) the opening of foreign accounts and the use of foreign financial instruments is prohibited by law.
The main disadvantage of a personal foreign account is its very limited functionality. The currency legislation of the Russian Federation allows residents of the Russian Federation to credit to such an account only those categories of funds that are directly named in the law, classifying all other operations as illegal. Such restrictions are lifted only if the person loses the status of a currency resident of the Russian Federation.
Types of accounts
Foreign banks usually offer the opening of settlement and / or savings accounts.
Settlement accounts are intended for regular transactions, involving frequent crediting and debiting of funds on the account, which is necessary when the company conducts normal operating activities (trading in goods, rendering services, etc.). Some accounts may operate in settlement mode, however, they require maintaining a constant minimum balance in the account in a certain amount or placing an investment portfolio.
Savings (investment) accounts are opened for the purpose of saving and / or investing client funds and, as a rule, cannot be used for current settlement operations.
How to choose a foreign bank?
At present, choosing a bank to open a bank account for a foreign (especially offshore) company is becoming an increasingly difficult task. It depends on many factors, starting with the structure of the company’s ownership and the type of its activity, and ending with the particularities of the policy of the national banking regulator.
Here are just some of the questions whose answers should be clarified by choosing a foreign bank:
- does this bank work with companies (including from offshore jurisdictions) and non-resident individuals?
- does the bank offer settlement accounts (i.e. accounts for frequent incoming and outgoing transfers)?
- will this bank accept customer service with this type of activity, with these beneficiaries, with these business partners and payment directions?
- in which currencies can payments be made (it depends on the availability of the corresponding network of correspondent banks) and are there any currencies you need among them?
- what are the bank rates?
- what are the ratings, reputation, financial performance and prospects of this bank?
- and much more.
Therefore, in order to choose a foreign bank to open a corporate or personal account abroad, we recommend that you contact only those specialists (professional intermediaries and bank agents) who are familiar with the current (and constantly changing!) Situation in the field of opening accounts and can objectively assess the chances of opening an account taking into account all the factors inherent in a particular client and bank.
In which country do I open an account?
For the purposes of opening corporate accounts for foreign (including offshore) companies, banks can be divided into three main groups:
1. Banks of Europe. Basically (except Switzerland. Liechtenstein and Montenegro) these are banks of the European Union member states that are subject to the requirements of the pan-European regulator - the ECB. Inside this group should highlight:
- banks of the Baltic countries (Latvia, Lithuania, Estonia);
- banks of Cyprus;
- banks of Central Europe (Poland, Hungary, Czech Republic, etc.);
- banks of Western Europe (Austria, Liechtenstein, Luxembourg, Switzerland);
- other banks (Montenegro, etc.)
Banks of this group continue to be popular when opening corporate accounts for foreign companies. Many of them have Russian-speaking customer support.
However, most European banks (as well as any other banks) are characterized by an increasingly lengthy processing of applications for opening an account, a request from the applicant for various additional information, and also (especially for Western European banks) rather high tariffs. And, most importantly, the banks of most of these countries today moved away from the practice of opening and servicing accounts of offshore companies (for example, it is now impossible to open an account in a Latvian bank with an offshore company or with an partnership formed from offshore companies such as LP or LLP).
Only some banks, despite the general negative attitude towards offshore companies, continue to consider opening investment accounts of offshore companies on terms favorable to the bank (namely, investing in bank products or maintaining a significant minimum balance), of course, with full satisfaction of all other requirements by the client.
2. Banks of Asia (Hong Kong, Singapore).
Asian banks as a whole are focused on business that somehow works in the Asian region or with partners from it. They are also characterized by a general trend towards deoffshorization and strengthening due diligence procedures.
Hong Kong banks today have virtually refused to open accounts for residents of Russia and other CIS countries or companies with beneficiaries from such countries. In order to open an account with a Hong Kong bank, an in-person interview with the Bank manager in English or Chinese is always required without the help of an interpreter (directly in Hong Kong). At the same time, banks only consider companies that have a real office in Hong Kong (it should be borne in mind that such companies are taxable in Hong Kong).
Today, only Singaporean companies can open an account with Singapore banks, and their directors and shareholders must be residents of Singapore. The director must exercise real authority to manage the company and have exclusive access to her bank account.
The relative disadvantage of Asian banks is also the more complicated communication between the bank and the client, due to the lack of Russian-language support, as well as a significant difference in time zones (which is relevant for the European part of Russia).
3. Offshore banks (Saint Lucia, Mauritius, Seychelles, Saint Vincent and the Grenadines, etc.).
Offshore banks are banks in offshore jurisdictions that have traditionally specialized in serving non-resident customers. However, to date, such banks not only do not have any significant advantages over banks from onshore countries, but they lose to them, primarily due to their offshore image and extremely limited options for settlements with certain countries and in certain currencies.
The fact is that most developed countries have a negative attitude towards offshore banks, which complicates the establishment of correspondent relations with them and impedes payments. In particular, for this reason, offshore banks (with the exception of banks in Mauritius) have recently experienced difficulties with settlements in US dollars. Therefore, if you need to pay in USD, as well as with American / European / Russian partners, opening an account in an offshore bank is usually not advisable.
On the other hand, the procedure for opening an account in an offshore bank today is practically no different from similar procedures in other banks. As elsewhere, the client is required to submit the required package of personal and / or corporate documents as part of the due diligence and know-your-customer procedures. An application for opening an account can be considered for a long time. An offshore bank, like any other, will refuse to open an account if the potential client does not comply with the bank’s policy and the risks for the bank are exceeded by the client. During settlement service Offshore banks can, as regularly as regular banks, request supporting documents for current customer transactions.
We also add that foreign banks should not be confused with banks operating in Russia with foreign capital, which, although they operate under the corresponding foreign brands, but, like any russian banksare subject to Russian law and the requirements of the Central Bank of the Russian Federation. Foreign banks about which in question here are banks located outside the Russian Federation and subordinate to the relevant foreign regulators. In Russia, such banks can operate only in the form of representative offices officially accredited by the Central Bank of the Russian Federation that do not open accounts and do not carry out banking operations.
Procedure for opening an account in a foreign bank
In order to open an account with a foreign bank, you must:
- Choose a foreign bank.
- Personally visit the bank’s office directly abroad, or meet with a bank representative or contact the bank’s authorized partners in their country. A number of banks (in particular, banks in Latvia, Cyprus, Switzerland, Mauritius, Saint Lucia) allow you to open accounts remotely (without going to the bank). In other cases, a personal visit of the future account manager to the bank branch is required (typical for banks in Poland, Hungary, Hong Kong, Singapore, etc.).
- Fill out bank forms and provide a complete set of documents required by the bank. If necessary, also provide any additional documents and explanations.
- Wait for a decision on opening an account.
Each bank makes its own requirements for the form and content of client documents. However, in general terms, the following is required from a client (opening an account with a company):
Firstly, a set of corporate documents (originals or certified copies - depending on the requirements of a particular bank).
Secondly, information about the activities of the client’s company, including:
- a description of the business of the company to which the account is opened (often also copies of contracts and invoices confirming the declared activity);
- data on counterparties for incoming and outgoing payments;
- estimated parameters of the account (annual turnover, number and frequency of operations, etc.).
The activities of the client’s company within one open account must be fully understandable jar legal and more or less uniform (ideally, one account - one type of activity). The declared activity must be similar to the existing resident business of the beneficiary of the company.
Thirdly, the client provides information on the beneficial (i.e., actual, ultimate) owners of the company. This information includes:
- personal identification documents;
- proof of address of residence;
- data on sources of income (this can be any documents confirming legal sources of origin of funds: certificate of employment, employment contract, data on entrepreneurial activity, savings, etc.);
- bank statements and statements;
- letters of recommendation from significant business partners;
- names and activities of existing resident (for example, Russian) client companies (including links to their websites, other materials);
- a resume with data on education and career (as noted above, it is important that the beneficiary has experience in the field of work, which is declared as the main activity of the company to which the account is opened).
Recently, banks have been paying special attention not only to information about the client (applicant) and its beneficiary, but also about his partners, which should be as clear and transparent to the bank as the future client himself. For example, if your counterparty is a British partnership (LLP, LP), then the bank may be interested in who and what is behind it, up to clarifying the resident business of the beneficiaries of such a partnership. Further, the presence of the counterparty in any sanction lists, or even simply communication with third parties from such lists, may cause refusal to open an account.
The term for consideration of an application for opening an account may currently be from 2 months and more. An expedited application process is not provided. At the same time, there are no guarantees that the account will be opened.
If the application is approved, the customer is assigned an account number, means of access to the Internet account management system, bank cards (if necessary) are issued.
Compliance Due diligence. Know-your-customer
These foreign words have long been familiar to everyone who had to open foreign accounts and fill out bank forms.
Banking compliance is the bank’s internal procedures for identifying and assessing customer satisfaction, based on both information provided by a potential customer and obtained from other sources available to the bank. The Bank collects and analyzes such information, implementing the principle of “know-your-customer”, and, in a broader context, the principle of “due diligence”, applied not only in banking practice, but also in business as a whole.
Compliance with these principles is not a whim of the bank: it is due to the need to comply with the requirements of the national (and also for the EU countries - supranational) regulator and norms aimed at combating money laundering and the financing of terrorism (AML / CFT). The indicated work to one extent or another has always been carried out by banks, however, in the last decade, the “rules of the game" have changed dramatically in the direction of tightening. For example, failure to provide the bank with the documents required by it, confirming the origin of the funds received, or a sharp deviation of the grounds (nature) of payments from those that were declared when opening the account, may well become the reason for its closure.
A relatively recent innovation is the requirement to indicate the place in banking forms tax residency the company and its beneficial owners (as well as their tax identification numbers and information about the active or passive nature of the company) for the purpose of implementing automatic exchange of information according to the CRS standard.
Another complicating factor was the policy of anti-Russian sanctions. In connection with it, they can refuse to open an account either directly to a Russian citizen or foreign company, the shareholder or beneficiary of which will be a Russian, one way or another appearing in the sanctions lists.
Given that the approach of banks to assessing customer satisfaction has long ceased to be formal, when opening a foreign account, you must be prepared to inform the bank not only of the standard information about the company to which the account is opened, but also
- details of your existing resident business,
- identification and biographical data of the beneficial owners of the company (including detailed work experience),
- comprehensive information on the sources of origin of their funds,
- and other information required by the bank.
Therefore, adaptation to the new rules implies careful and advance documentation of the operations of your both foreign and resident business, personal income, sources of wealth, taxes paid, not only while working with a foreign account, but also for several years preceding the moment when there was a need to open an account abroad.
Key Account Opening Trends
So, the choice of reliable foreign banks that are ready to service the accounts of non-resident companies (especially offshore) is currently very limited and continues to narrow. Why? Here are some reasons:
- Refusal from offshore. Foreign banks reduce the share of offshore companies in their client portfolio or refuse to service them at all (moreover, the criterion may be not only the offshore jurisdiction of the company, but also the lack of real economic content - these companies are called shell companies). Somewhere this will happen at a time, somewhere - in stages. For example, in the light of the well-known events related to the self-liquidation of the Latvian ABLV bank in the spring of 2018, many other banks have intensified the cleaning of their portfolios from “unwanted” customers. In Latvia, the decision to stop servicing shell companies' accounts was made at the legislative level. In the very near future, other countries, primarily Cyprus, may follow this example, where the introduction of new requirements for banks is expected in the summer of 2018.
- The reality of the business. Preference is given to companies whose country of registration coincides with the country of the bank, or to companies that have a real economic presence in their country (office, assets, personnel), financial statements and paying in it taxes, as well as having any connection with the country of the bank in which the account is opened.
- Clarity and transparency of the client. Banks strive to accept customers with a fully understood business, a transparent source of income and character cash flow, as well as with completely acceptable (for a number of parameters) beneficiaries and counterparties.
- Strengthening due diligence requirements. Such requirements continue to be strengthened both in relation to potential and existing customers of foreign banks (in particular, on identification of beneficiaries and documentary evidence of operations).
- Close to zero chances foreign start-up companies (so far not able to confirm the relevant experience of previous activities and indicate counterparties), as well as companies representing “high-risk” categories of business (for example, blockchain and cryptocurrencies, unlicensed forex, payment systems, gambling, dual-use goods) have an account open destination, precious metals, etc.). Traditionally, loyally (subject to other conditions), banks relate to international trade, freight forwarding and logistics activities, understandable IT projects, and financial services licensed in the EU countries.
- U.S. dollars. The situation with transfers in US dollars has deteriorated sharply (for example, banks in Latvia, as well as a number of offshore banks, have completely refused to open accounts in this currency).
- Sanctions. The attention of banks to various sanctions lists and the corresponding categories of individuals and companies has increased. The presence of “sub-sanctioned” persons among the declared beneficiaries or counterparties (or any connection with them) will result in the refusal to open an account.
- Customers from Russia. Practically targeted discrimination against Russian customers takes place (a peculiar “presumption of guilt” is being formed in relation to customers from Russia and other CIS countries). However, even such circumstances do not preclude the application of an individual approach and the search for acceptable solutions.
- Automatic exchange. In September 2018, the second stage countries, including Russia, Switzerland, Austria and many classic offshore jurisdictions, enter the practical phase of the automatic exchange of information on financial accounts under the CRS standard. This means that data on personal and corporate bank accounts (primarily accounts of companies with predominant passive income), the beneficiaries of which are residents of the Russian Federation, will be sent to Russia by the tax authorities of countries that have agreed to such an exchange.
It is still premature to predict its results, however, if the automatic exchange is fully implemented, it will be possible to talk about a completely different level of transparency of tax information in the world.