Permission to open an account in a foreign bank. Opening bank accounts abroad
After simplifying the procedure for opening accounts abroad, given the instability of the Russian economy, our compatriots became actively interested in the possibility of transferring part of their funds to foreign banks. The procedure for opening an account with a foreign financial institution is quite complicated. A number of questions arise: in which country can you open accounts, how to choose a bank, how to transfer funds, what documents will foreign financiers require, and, finally, how reliable is such an allocation of funds? We will try to answer all questions in this article.
Avoiding misunderstandings
Many Russians mistakenly believe that branches (representative offices) of foreign banks can be found in Russia. In most cases, the perpetrators of this delusion of the population are Russian bankers who actively advertise the belonging of their organization to an international group. In fact, foreign banks do not operate on the territory of the Russian Federation. Turning, for example, to Raiffeisenbank, you turn to a subsidiary of an Austrian financial group, whose activities are regulated by the Central Bank on the basis of a license issued by it and Russian legislation. Consequently, you will not protect yourself from political and so-called “country” risks. Subsidiaries cannot compare in terms of reliability with their "mothers", and in order to open an account in foreign bank, as a rule, it is necessary to visit the country in which its head office is located (for example, Austria, in the case of Raiffeisen Zentralbank).
Can a Russian open an account abroad: the legal basis
Ten years ago, in order to open an account abroad, a Russian citizen permanently residing in the territory of the Russian Federation required a special permit from the Central Bank, which was very difficult to obtain. Now the procedure has been greatly simplified. Federal Law "On currency regulation and currency control"(Art. 12, paragraph 1.) allows all residents of the country to open accounts without restrictions in foreign currency in banks located outside the territory of the Russian Federation. However, some categories of citizens still will not be able to become depositors of foreign banks - a complete list of categories is indicated in Law No. 79-FZ “On the Prohibition certain categories persons to open and have accounts (deposits), keep cash cash and valuables in foreign banks located outside the territory of the Russian Federation” dated May 7, 2013.
We will tell you more about how the opening of accounts is carried out in practice.
Procedure for opening accounts in foreign banks
A personal account in a foreign bank can only be opened for savings, private investment and subsequent spending: use the account to maintain entrepreneurial activity forbidden. The procedure for making a deposit usually takes from 1 week to several months. In this case, you can choose 1 of 2 paths:
- Personally come to the country and visit the bank, taking with you required package documents and filling out registration forms in a foreign language. The bank will check all the data and then inform the foreigner about the possibility / impossibility of opening an account.
- Contact intermediaries. There are many companies that, for a fee (ranging from $200 to $12,000), will help you open an account abroad. To work with intermediaries, a potential contributor will need to provide certified samples of his signature. You can certify the signature either at the consulate of the state in which the bank is located, or at a subsidiary bank located in Russia (if one exists).
It is important to note that some banks refuse to open accounts if they do not communicate with the client at least by phone (Credit Suisse) or do not hold a meeting in Moscow (Deutsche bank, International Bank of Luxembourg, LGT bank). Raiffeisen Zentralbank insists on an interview with a bank representative and the provision of 2 letters of recommendation from foreign partners of a private depositor.
The most complicated procedure for opening an account is used by English banks. A foreigner may be required to provide a lot of additional documents, for example, a recommendation on trustworthiness issued by Russian bank; paid bills for public Utilities, in which the actual address and surname of the contributor will be recorded; a letter of recommendation from an employer, etc.
Top up an account opened in foreign bank, you can either cash or by bank transfer. A non-cash transfer is not possible without providing a domestic bank with a notice of opening an account in a foreign bank with a mark from the tax inspectorate and a certificate of tax registration. When replenishing an account in cash, in a foreign bank you will be asked to provide documents confirming the legal origin of the currency.
You can manage an account in a foreign bank by:
- courier mail;
- facsimile communication;
- Internet banking;
- bank card;
- checkbook.
Banks protect the funds of their depositors by inventing special codes, ciphers and creating dedicated, secure communication channels.
We see that the process of opening accounts abroad cannot be called simple. Next, we will tell you what you should pay attention to when choosing a bank, and what package of documents may be required.
The minimum list of documents for opening an account in a foreign bank
When choosing a foreign bank, first of all, you need to find out how the deposit insurance system works in the country that you are interested in: the principles of functioning of these systems are the same all over the world, but sums insured may differ significantly. You should also clarify what documents the bank will require to open an account (you must choose the one credit organization, the requirements of which you can meet). As a rule, the minimum list includes:
- certificate of income for 6-12 months, certified by the tax office.
- notarized copies of the passports of the depositor and his wife (spouse).
- information about the composition of the family.
- utility bills.
- a certificate from the police stating that the citizen of the Russian Federation has no criminal record and is not under investigation.
If you have an open account in the Russian "daughter" of a foreign bank, you can contact the manager of this institution with a request to help in opening an account: the existing links between the parent and subsidiary will help speed up the process. A manager of the Private banking segment can help with opening a deposit: he will not only recommend reliable bank, but also tell you what documents should be prepared. His services will not need to be paid, and at the same time he will be able to provide you with comprehensive advice.
Please note that the minimum deposit amount and the minimum balance on it, set by European and US banks for foreigners, is 50-300 thousand euros (US dollars). However, in offshore and Baltic banks, you can open a deposit in the amount of 100-200 euros (US dollars). In addition, we suggest that you familiarize yourself with the average interest rates in foreign banks.
And in conclusion, we want to mention one feature of owning an account in a foreign bank - in accordance with paragraph 2 of Art. 12 of the Federal Law “On currency regulation and currency control”, every citizen of the Russian Federation must notify the tax authorities at the place of his registration about opening accounts in banks located outside the territory of the Russian Federation within a month. At the end of each year, you will have to provide information about the balances on such accounts in tax office. For violation of the norm of the law, a fine of up to 5,000 rubles is provided.
Many citizens of our country believe that it is better to keep money in foreign banks. Russian economy is constantly in a state of crisis, sanctions are being introduced and lifted, oil is falling, the dollar and the euro are growing. All these factors do not contribute to an increase in confidence in domestic banks, because people do not leave the feeling that at any moment everything can collapse. At the same time, it is necessary to understand that opening an account abroad is accompanied by certain difficulties. Is this even possible? In this article, we will tell you how to open an account with a foreign bank, what difficulties may arise, and we will also help you choose the most reliable country for your account.
Who among Russians can open an account abroad?
In Russia, Federal Law No. 79 of May 7, 2013 was adopted, limiting the circle of persons entitled to open accounts in foreign banks. So, it is prohibited for those who hold senior positions in government agencies, such as:
- the Prosecutor General's Office;
- federal executive authorities;
- board of directors of the Central Bank of the Russian Federation and others.
Until recently, to register an account in a foreign country, it was necessary to obtain permission from the Central Bank of the Russian Federation, but now the procedure has been simplified. Enough Notice tax service within 30 days after signing the agreement with the bank. After that, every 5 years you need to submit a report on the movement of funds to the tax service.
Also in 2016, Russia became a party to an international agreement on the exchange of data on financial transactions. Starting from 2018, our country will be included in a single information field with other states, which will allow the tax authorities to directly receive information about the movement of Russian funds. Therefore, you need to be prepared that it will become more difficult to hide your income.
The main question: how to choose a country for opening an account
In order to open an account in another country, as a rule, you need to be a resident of that country. Some banks do not have such a requirement for customers. But then, perhaps, you will encounter other terms of service.
Often, financial institutions require you to provide documentary justification for your desire and ability to open an account in another country. The bank may require you to provide:
- resident card;
- property ownership documents;
- visa (if required to enter the country);
- a certificate of 2-NDFL certified by a notary, a certificate of the right to inheritance and other documents confirming the receipt of finances.
Each bank has its own rules for accepting applications for opening an account for citizens of other countries. Therefore, it is necessary to clarify the list of requirements in individually. But it is worth noting the general trends:
- In the Eurozone countries, as a rule, documents from the list above will be requested (in Sweden, Great Britain, Spain and others). The exception is the Latvian bank Rietumu Banka, which even assists foreigners in obtaining a residence permit and is ready to open an account with a small investment.
- Also, in large world banks, a threshold is set for the minimum amount for storage. Most often, this is 50,000 or even 100,000 in the state currency, and, for example, for Credit Suisse, Barclays or UBS without a residence permit, 1,000,000 or more will be accepted.
- At the same time, many Asian countries are interested in investments and provide comfortable conditions for opening accounts. For example, Chinese ICBC and Bank of China are ready to approve an application upon receipt of an account of 1,000 yuan. But Singapore, unlike the example, is demanding when it comes to opening accounts by citizens of other countries, and the authorities will require a full package of documents.
Of course, only the most basic points regarding cooperation with foreign banks are listed here.
How to open a bank account abroad?
The main limitation for individuals when opening an account in another country is that the account can only be used for personal purposes. It is prohibited to carry out any operations related to entrepreneurial activity. You can use an open account only in three ways:
- storage of funds;
- payment for purchases, services and other personal expenses;
- investment activities.
With regard to the registration of the application, in different countries this will take from a week to several months. Documents are carefully checked, and the bank's security service must make sure that you are trustworthy and honest. And only if the bank makes sure that there are no reasons for refusal, they will open an account for you.
As a rule, much attention will be paid to the legitimacy of the origin of the investment funds. In addition, in case of a positive decision and approval of the application, in the further use of money from the account (especially when working with large amounts), you may also be required to justify the expenses. For example, request documents for the purchase of real estate or checks from a medical institution.
Most often, you will need to personally fill out an application to open an account, so consider the possibility of visiting the country that provides you with banking services. Additionally, it is worth checking with the manager of the selected bank some important details:
- guarantees of saving money on the account for foreigners (especially for those who are not residents of the country of the bank);
- the size of the minimum balance on the account (there is also no one universal value for all institutions);
- how much does it cost and what does deposit insurance give.
Account opening methods
There are several possibilities to open your own account abroad. This can be done in the following ways:
- Personally draw up all documents in the language of the country accepting the application. Further, most likely you will be required to come to the bank and fill out a questionnaire on the spot.
- By concluding an agreement with an intermediary company that will prepare and send all the necessary papers for a fee. This service can cost up to several thousand dollars.
- By issuing a power of attorney to a third party (for example, to a colleague or lawyer who is permanently in the country of the bank).
Large banks are not always ready to work with a future client blindly, through third-party organizations or proxies.
It is necessary to clarify the rules of work of a particular organization, which may include either a mandatory personal visit to the office, or a conversation with a company employee by phone, or a visit to a representative office in our country (usually in Moscow), such as Deutsche Bank, Credit Suisse.
UK and US banks
The most serious requirements for clients are made in English and American banks. It is especially difficult for non-residents to open an account, but there are strict rules for those who already have rights in the state, confirmed by a residence permit. You may be required to provide:
- letters of recommendation from colleagues or business partners;
- real estate lease agreement on the letterhead of a British real estate agency;
- paid rent and utility bills (address and name must be included) and other documentation.
Therefore, if you are not a resident of these states, then think carefully about the profitability of opening an account. You will face a number of difficulties and it is far from certain that you will be able to break through all the bureaucratic barriers.
Account Management and End of Service
IN modern world the online banking system is well developed, so account management will not cause problems.
Replenishment of the account, in addition to the traditional cash deposit through the cashier, is also possible online. But there are some nuances:
- you can transfer money from a Russian account to a foreign one only after notifying the Federal Tax Service;
- when depositing funds in a bank, it is necessary to explain the origin of the money and confirm its legality.
Before opening an account with the institution of your choice, check how it can be closed later. As a rule, you will need to make a personal visit to the branch where you applied and filled out the questionnaire.
The minimum package of documents for opening an account in a foreign bank
The most necessary documents that you will need are as follows:
- a notarized copy of your passport, as well as your spouse's passport, if any;
- birth certificates of children and other documents confirming the composition of your family;
- justification of the reasons for opening an account (residence permit, real estate in the country of the bank, etc.);
- income statements for the last 6-12 months, certified by the Federal Tax Service;
- certificate of no criminal record.
If there is a branch of a bank in Russia where you plan to open an account abroad, then contact the company's office for advice.
Summing up, we can conclude that in order to open an account in a foreign bank, you need:
- carefully collect all information about the requirements of the financial institution in advance;
- clarify the nuances of servicing, closing an account and providing guarantees for citizens of other countries;
- scrupulously prepare the requested documents and carefully communicate with employees;
- be prepared to come personally to the country opening the account, or spend some money to pay for the services of an intermediary company in opening an account.
The main thing is to be patient and not wait for an instant result, and with a responsible approach, you will be able to open an account in a foreign bank.
Individuals and legal entities can open an account abroad. This is required for full functionality. foreign company or for cash settlements of residents and non-residents. For a Russian, as well as for other foreign citizens, there are special conditions how to open a bank account in another country.
Choosing a reliable foreign bank abroad
The European banking system has been stable for many years. Holders are attracted by the guarantee of financial stability from the state and the European Union. You can open an account in Europe in one of the following countries:
The choice of country is based on individual needs. For example, if an urgent opening is required without a visit to the bank (i.e. remotely), then the services of Latvian banks are suitable. For those who care about privacy - Liechtenstein, and for cheap tariffs to Poland or the Czech Republic.
In addition to European options, others are also available:
- Payment systems - opening period 2-6 days
It is worth seeking services in some jurisdictions because of the advantages:
Services are available for individuals and for companies. Corporate accounts are often opened offshore. This option has an advantage in terms of taxes. Some organizations offer services under High risk
How to open an offshore account remotely
Remotely means without a visit to the country where the bank is located. This is possible in two cases:
The bank has a representative office in Moscow or in your city;
Despite the fact that you have to visit one of the offices - our company or a branch of the bank, this method is remote. This is true, because in the end you draw up all the documents without going abroad.
Unfortunately, this service is not available in all organizations and not in all countries. Even less common is the ability to conduct transactions completely online. Our staff will advise you on current possibilities.
Required documents for individuals
A number of factors affect the package of documents for individuals:
Country where the bank is located;
Type of account for a foreigner;
Everything necessary is issued to a person who will subsequently be able to manage the account and will have the right to sign. This rule also applies if an account is opened for a non-resident.
An individual will need an internal and foreign passport to open an account abroad. Financial institutions sometimes put forward additional requirements, so always check the current list before opening.
Citizens of Russia, as well as other countries, have two options: to arrange everything on their own or to seek qualified support. When preparing a package of documents on your own, problems occur. And delay is one of them.
On average, after all the papers are processed and received by the bank, it takes about 7 business days to open. The more time you spend before this, the longer the processes will drag on. Contact our company. We will not only speed up the process, but also avoid annoying problems. More about our company:
Exists additional service: urgent offshore account opening. In this case, the review takes up to four days. If you combine the service and the bank that immediately provides the details, then all processes will take about 1 week.
Features for non-residents and legal entities
It is convenient that access is carried out remotely using Internet banking or a mobile application.
25.06.2018
Foreign banking for non-resident clients in Lately became 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 Better conditions, and clients could afford to choose from a variety of 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 legality of the origin of his funds. Under pressure from international organizations and national regulators in the field banking service non-residents there is a constant "crackdown".
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 you need an overseas bank account?
Corporate account in a foreign bank is necessary for convenience of calculations companies with their business partners (customers, suppliers), accumulation monetary assets, payment of mandatory payments, maintaining 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 specifically for a foreign company (and not for an individual) is no currency restrictions provided by Russian legislation for currency residents of the Russian Federation. For foreign companies do not apply obligation to notify tax authorities on 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 is needed in case of employment or obtaining a residence permit abroad, ownership of foreign real estate and in many other cases. In addition, many clients simply decide to keep and/or invest some of their funds abroad in order to preserve or increase their personal or family wealth. Only for certain categories of citizens (senior officials, civil servants) opening foreign accounts and using 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 removed only if the person loses the status of a currency resident of the Russian Federation.
Account types
Foreign banks usually offer the opening of checking and/or savings accounts.
Estimated accounts are intended for regular transactions involving frequent crediting and debiting of funds on the account, which is necessary for the company's normal operating activities (trade in goods, provision of services, etc.). Some accounts can operate in the 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 the client's funds and, as a rule, cannot be used for current settlement transactions.
How to choose a foreign bank?
Currently, choosing a bank to open a current account for a foreign (especially offshore) company is becoming an increasingly difficult task. It depends on many factors, starting with the ownership structure of the company and the type of its activity, and ending with the specifics of the policy of the national banking regulator.
Here are just a few of the questions that should be answered when choosing a foreign bank:
- does it work given bank with companies (including those from offshore jurisdictions) and individuals - non-residents?
- Does the bank offer checking accounts (i.e. accounts for frequent incoming and outgoing transfers)?
- Will this bank accept a client with this type of activity, with these beneficiaries, with these business partners and directions of payments?
- in what currencies can payments be made (this depends on the availability of an appropriate network of correspondent banks) and are there any currencies you need among them?
- what are the bank rates?
- what are the ratings, reputation, financial indicators and prospects of this bank?
- and much more.
Therefore, in order to choose a foreign bank for opening a corporate or personal account abroad, we recommend that you contact only those specialists (professional intermediaries and bank agents) who know 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 to open an account?
For the purposes of opening corporate accounts for foreign (including offshore) companies, banks can be divided into three main groups:
1. European banks. Basically (except Switzerland, Liechtenstein and Montenegro) these are the banks of the member countries of the European Union, which are subject to the requirements of the pan-European regulator - the ECB. Within this group are:
- banks of the Baltic countries (Latvia, Lithuania, Estonia);
- banks in Cyprus;
- banks of Central Europe (Poland, Hungary, Czech Republic, etc.);
- Western European banks (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) are characterized by increasingly lengthy processing of applications for opening an account, requesting various additional information from the applicant, 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 no longer possible to open an account in a Latvian bank for an offshore company or for an LP or LLP partnership formed from offshore companies).
Only a few banks, despite the general negative attitude towards offshore companies, continue to consider opening investment accounts of offshore companies on favorable terms for the bank (namely, investing in bank products or maintaining a significant minimum balance), of course, with the client fully satisfying all other requirements.
2. Asian banks(Hong Kong, Singapore).
Asian banks as a whole are focused on business, one way or another working in the Asian region or with partners from it. They are also characterized by a general trend towards deoffshorization and strengthening of due diligence procedures.
Hong Kong banks today have practically refused to open accounts for residents of Russia and other CIS countries or companies with beneficiaries from such countries. In order to open a bank account in Hong Kong, a face-to-face interview with a Bank manager in English or Chinese is always required without the help of an interpreter (directly in Hong Kong). At the same time, banks consider only those companies that have a real office in Hong Kong (it should be borne in mind that such companies are subject to taxation in Hong Kong).
To date, only Singaporean companies can open a bank account in Singapore, 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 its bank account.
A relative disadvantage of Asian banks is also more complicated communication between the bank and the client, due to the lack of Russian-speaking support, as well as a significant difference in time zones (which is important 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 servicing non-resident clients. However, today such banks not only do not have any significant advantages over banks from onshore countries, but also lose to them - primarily because of the offshore image and extremely limited possibilities for settlements with certain countries and in certain currencies.
The point is that most developed countries have a negative attitude towards offshore banks, which complicates the establishment of correspondent relations with them and prevents 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 practically does not differ from similar procedures in other banks. As elsewhere, the client is obliged 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 client exceeds the risks for the bank. During settlement service offshore banks can, just as regularly as conventional banks, request supporting documents for current client 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 banks, are subject to Russian legislation and the requirements of the Central Bank of the Russian Federation. Foreign banks, about which in question here, these 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, which 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 in 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 authorized bank partners in your 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 holder 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.
- Waiting for the decision to open an account.
Each bank has its own requirements for the form and content of client documents. However, generally speaking, the following is required from the client (opening an account for the 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 for which the account is opened (often also copies of contracts and invoices confirming the declared activity);
- data on counterparties for incoming and outgoing payments;
- expected parameters of work on the account (annual turnover, number and frequency of operations, etc.).
The activities of the client's company within one opened account must be fully understandable bank, legal and more or less homogeneous(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 about the beneficial (that is, actual, ultimate) owners of the company. This information includes:
- personal identification documents;
- proof of residential address;
- data on sources of income (this can be any documents confirming the 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) companies of the client (including links to their websites, other materials);
- resume with information about education and career (as noted above, it is important that the beneficiary has work / business experience in the area that is declared as the main activity of the company for which the account is opened).
Recently, banks pay special attention not only to data about the client (applicant) and his beneficiary, but also about his partners which should be as understandable and transparent for 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 finding out the resident business of the beneficiaries of such a partnership. Further, the presence of a counterparty in any sanctions lists, or even just a relationship with third parties from such lists, may result in a refusal to open an account.
The term for consideration of an application for opening an account can currently be 2 months or more. There is no expedited application process. At the same time, there are no guarantees that the account will necessarily be opened.
If the application is approved, the client is assigned an account number, means of access to the online 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 has had to open foreign accounts and fill out bank forms.
Banking compliance is the bank's internal procedures for identifying and assessing the compliance of a client, based both on information provided by the potential client himself, and obtained from other sources available to the bank. The Bank collects and analyzes such information, implementing the “know-your-customer” principle, and, in a broader context, the “due diligence” principle, which is used not only in banking practice, but also in business in general.
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 for the EU countries also - supranational) regulator and regulations aimed at combating money laundering and terrorist financing (AML/CFT). This work has always been carried out by banks in one volume or another, however, in the last decade, the “rules of the game” have changed a lot 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 be the reason for its closure.
A relatively recent innovation is the requirement to specify in bank forms a place tax residency company and its beneficial owners (as well as their identification tax numbers and information about the active or passive nature of the company's activities) for the purposes of implementing automatic information exchange according to the CRS standard.
Another complicating factor was the policy of anti-Russian sanctions. In connection with it, both a Russian citizen directly and a foreign company, the shareholder or beneficiary of which will be a Russian, one way or another appearing on the sanctions lists, can be denied opening an account.
Considering that the approach of banks to assessing the compliance of a client has long ceased to be formal, when opening a foreign account, you must be ready to provide the bank not only with standard information about the company for which the account is opened, but also
- details of your existing resident business,
- identification and biographical details of the beneficial owners of the company (including detailed work experience),
- comprehensive information about the sources of origin of their funds,
- and other information required by the bank.
Therefore, adapting to the new rules means carefully and in advance documenting the operations of your foreign and resident business, personal income, sources of wealth, taxes paid, and not only while working with foreign account, but also for several years preceding the moment when it became necessary to open an account abroad.
Key trends in account opening
So, the choice of reliable foreign banks that are ready to service the accounts of non-resident companies (especially offshore ones) is currently very limited and continues to narrow. Why? Here are some reasons:
- Avoid offshore. Foreign banks reduce the share of offshore companies in their client portfolio or refuse to serve them at all (moreover, the criterion may be not only the offshore jurisdiction of the company, but also the lack of real economic content - such companies are called "shell companies"). Somewhere it will happen at once, somewhere - in stages. For example, in the light of the well-known events related to the self-liquidation of the Latvian bank ABLV in the spring of 2018, many other banks stepped up the purge of their portfolios from "undesirable" clients. In Latvia, the decision to stop servicing shell companies' accounts was taken at legislative level. In the very near future, other countries may follow this example, first of all, Cyprus, where the introduction of new requirements for banks is expected in the summer of 2018.
- Business reality. Preference is given to companies whose country of registration coincides with the country of the bank, or companies that have a real economic presence in their country (office, assets, personnel) financial statements and those who pay in it taxes, as well as having any connection with the country of the bank in which the account is opened.
- Understanding and transparency of the client. Banks strive to accept clients with a fully understandable business, transparent source of income and character cash flows, as well as with fully acceptable (in a number of parameters) beneficiaries and counterparties.
- Strengthening due diligence requirements. Such requirements continue to increase both in relation to potential and existing clients of foreign banks (in particular, on the identification of beneficiaries and documentary evidence of transactions).
- Close to zero odds foreign start-up companies (who are not yet able to confirm relevant experience of previous activities and indicate counterparties), as well as companies representing “high-risk” business categories (for example, blockchain and cryptocurrencies, unlicensed forex, payment systems, gambling business, dual destinations, precious metals, etc.). Traditionally, banks are loyal (subject to other conditions) to international trade, forwarding and logistics activities, understandable IT projects, financial services licensed in EU countries.
- U.S. dollars. The situation with transfers in US dollars has deteriorated sharply (for example, Latvian banks, 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 relevant 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 a refusal to open an account.
- Clients from Russia. There is almost targeted discrimination Russian clients(in relation to clients from Russia and other CIS countries, a kind of “presumption of guilt” is formed). However, even such circumstances do not exclude the use of an individual approach and the search for acceptable solutions.
- Automatic exchange. In September 2018, the “second priority” countries, including Russia, Switzerland, Austria and many classic offshore jurisdictions, enter the practical phase of the automatic exchange of information on financial accounts according to the CRS standard. This means that data on personal and corporate bank accounts (primarily accounts of companies with predominantly passive income), whose beneficiaries 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. tax information in the world.
Many Russians are wary of the national 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, which were opened by international banking groups, or banks with the participation of foreign capital cannot be classified in this category, since they are issued a license for the right 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 the performance 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 their country: some banking institutions allow documents to be sent by mail.
What to look out for
Citizens who plan to place money abroad on condition of anonymity may face difficulties. As part of the total fight against dirty money, foreign 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 in favor of the client was carried out remittance by a sender, information about which is missing or only its code is available, Cypriot bankers are entitled to transfer funds after receiving from the correspondent bank full information about the person who transferred the money.
What does the law say about it?
Can a citizen of Russia open a deposit account in a bank abroad? Yes, current legislature does not provide for a ban on the keeping by residents of the Russian Federation of funds in bank accounts abroad. Moreover, in last years the procedure for opening deposits was noticeably simplified. If earlier this transaction required obtaining a special permit from the Central Bank of Russia, today most Russians can become a client of a financial institution operating under foreign jurisdiction (with the exception of the categories of citizens defined by federal law No. 79-FZ).
At the same time, the legislation clearly defines cases when a Russian citizen has the right to place funds abroad. This:
- opening a deposit for the purpose of accumulating personal funds;
- investment.
The placement of funds for the purpose of doing business is prohibited.
There are some restrictions in relation to the states with whose banking institutions cooperation is allowed. Countries where you can freely place funds are members of the international organizations Organization for Economic Co-operation and Development (OECD) and Financial Action Task Force on Money Laundering (FATF).
The opening of deposits by residents of the Russian Federation in banks of countries that are not members of these organizations is carried out in accordance with the procedure established by the Central Bank of Russia. Directive No. 1411-U dated March 30, 2004 contains a requirement to pre-register such accounts. However, the registration process itself is still missing. Therefore, if we are formally guided by the rule “everything that was not prohibited 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 a little differently.
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 offers of foreign financial institutions, get acquainted with their reputation, data on their stability, credit ratings and forecasts. Having chosen the appropriate option, you should proceed to opening a deposit. You can do this on your own 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 registering a deposit can last from one week to several months.
Citizens who are independently engaged in registration must collect the necessary package of 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 have used the services of intermediaries do not have to travel abroad and personally visit the bank. Depositors 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.
At the same time, cooperation with intermediaries does not mean at all that the depositor will not have to undergo an interview with representatives of a foreign financial institution. Many banks provide for communication with a potential client via video or telephone. Contributors may also be required 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 particular bank. The average package of documents includes:
- passport of the depositor, as well as his family members (wife / spouse and children);
- a certificate of the amount of income received for the last 6-12 months;
- information about the composition of the family;
- a certificate stating that the depositor is not under investigation, issued by the police.
The most stringent requirements for potential clients are put forward by the financial institutions of the United Kingdom. Bankers from the UK may require a variety of additional documents, including paid utility bills showing the actual address of residence and the name of the depositor, as well as letters of recommendation about the citizen's trustworthiness written by his employer or a Russian bank.
Who is considered a resident under currency law
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 permanently residing in Russia.
Obligation to notify the opening of an account
Residents of the Russian Federation who have placed their funds in banks located in other countries are required to notify the tax authorities of the opening of accounts. Notification of the operation must be sent within a month from the moment the deposit was opened. There is also a requirement for mandatory notification within a month of the tax authorities of the closure of the account.
Citizens can send reporting documents:
- personally visiting the tax office;
- by mail with acknowledgment of receipt;
- online via Personal Area on the website of the Federal Tax Service (an electronic signature is required).
The requirement for mandatory notification of tax authorities was legally enshrined several years ago. Nevertheless, today this rule does not fully work, since a single procedure and form of notification have not yet been developed. Therefore, some depositors, at their own peril and risk, ignore the requirement and do not report information about foreign accounts to the Federal Tax Service.
Cash flow statement
Residents of the Russian Federation who have opened a deposit abroad are obliged to provide the tax authorities with a report on the movement of funds on the account. This report reflects balances at the beginning and end of the calendar year, as well as amounts credited to and debited from the account. Attaching any additional documents to the report is not required. However, in addition to the report, the tax authorities may require the depositor to provide 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 certain legal entities.
Administrative responsibility (responsibility for non-submission or late submission of documents)
Residents of the Russian Federation who did not notify the Federal Tax Service of opening an account with a foreign financial institution or filed a notification in violation of the deadlines, as well as citizens who did not provide or submitted a report on the movement of funds with a delay, may be held administratively liable. The amount of fines is:
- for failure to submit a notification - from 4 to 5 thousand rubles;
- for violation of the deadline for providing a notification - 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 a report - from 300 to 3 thousand rubles.
Who is prohibited from opening accounts abroad
In order to ensure national security In Russia, Federal Law No. 79-FZ of July 27, 2004, prohibits certain categories of citizens from keeping funds in banking institutions that are outside the country. These categories include:
- persons who hold high public office;
- members of the Board of Directors of the Central Bank of Russia;
- top managers of state-owned companies;
- citizens appointed to the position 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 the persons referred to in Article 7.1.
Persons who violate the ban are subject to dismissal from their positions or dismissal from work due to loss of confidence.
Where and how can I 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 located under any jurisdiction. The most popular banking jurisdictions among Russians are:
- Cyprus;
- Latvia;
- Switzerland;
- Hungary;
- Czech;
- 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 deposit less than $50,000 on their account, and Swiss financial institutions specializing in private banking are open to cooperation with individuals who deposit at least $100,000.
Bilderlings
An alternative to placing deposits in foreign banking institutions may be to open a European and British account with individual details (IBAN) at. An innovative fintech platform that offers various types of banking services, carries out its activities on the basis of the license of the issuer electronic money 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 advantage of Bilderlings is high quality service and high speed of service. If opening an account for a Russian resident by a foreign bank can take from a week to several months, then 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.
Bilderlings account holders have the opportunity to accept and make unlimited payments from all over the world (more than 100 countries), as well as exchange euros, dollars and other currencies at the interbank rate (21 currencies in total).
How do the Russian authorities see it?
The simplification of the procedure for opening deposits by Russian residents in foreign banking institutions can be regarded as loyalty on the part of the authorities. However, the outflow of funds from the Russian financial system not welcomed by the government. Despite the statutory permission, currency operations may be considered by the Federal Tax Service as potentially risky, which is why this issue is constantly under the control of the tax authorities.
Is it profitable to have an account abroad
What preferences does Russians get from opening a deposit in a foreign bank? Statistics will help answer this question, too. In Switzerland, which is one of the most popular banking jurisdictions, no more than 60 financial institutions have ceased their activities since the beginning of the 21st century, while in Russia over 400 banks have gone bankrupt over the past 8 years alone. At the same time, the Swiss authorities and the authorities of European countries promptly respond to the emergence 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 clients, an individual approach to each depositor and the quality of asset management.
Opening a foreign account with Bilderlings: step by step instructions
To open an account with Bilderlings, the depositor must register on the site by providing an email address, phone number and access password. Next, the investor should fill out an online questionnaire, and then submit to in electronic format the minimum package of documents, which includes:
- Passport copy.
- A copy of the document confirming the place of residence.
Also, the contributor must send an electronic photo (selfie), in which he is depicted with his passport.
Opening an account is carried out after the depositor provides all the necessary documents and takes no more than one business day.
Where can I get legal advice
You can get comprehensive advice on opening an account after registering on the Bilderlings fintech platform. Each registered user has a personal manager who is ready to answer any financial questions.
You can also contact Bilderlings representatives by phone, email and in social networks. Customer service is not handled by a chatbot or a call center employee, but by a highly qualified financial specialist.