Securing a UK business bank account for non residents is a challenging, often frustrating task for many business owners who are based overseas.
Whilst a non-UK resident can easily register a limited company in the United Kingdom, they often run into complex snags trying to open an account to support the business. This is frustrating on multiple levels, but especially considering that the account is a practical necessity. Without a business bank account, managing the businesses accounting, finances and bookkeeping will become increasingly difficult, as will avoiding large overseas payment and depository charges.
This complexity isn’t entirely fair, but thankfully is resolvable due to a wealth of options available for non UK residents who are registering a business from overseas.
Where does the problem stem from?
Across the past decade there has been a global emphasis on preventing money-laundering. Whereas in the past non-UK residents could apply for an account from overseas and then deposit cheques and pass money through the accounts, nowadays banks in particular face more scrutiny for ensuring the reasons for the account are legitimate.
This has led to heightened acceptance criteria, and particularity about who they will allow to open an account. Unfortunately due to this scrutiny, UK banks will more than likely decline requests to open an account, rather than navigate the compliance challenges they will have to face.
Do you really need a business current account for a Limited Company? Find out what we think here.
Available Banking Options for Non-Residents
Options may be limited for non-UK business bank account owners, but they are still existent. The most popular options include:
- Traditional High Street Banks
Despite everything we’ve just said about it being unlikely, high street options are still worth a try, especially if the entity is controlled by an overseas parent company itself. Companies with larger trading histories who are used to handling overseas businesses and transactions will also be more willing to do business. Banks worth trying include HSBC, Barclays International, and Lloyds.
- Online Payment Providers
Online payment providers or global payment platforms can either be short or long term solutions depending on how much trading the company is expecting.
Online payment providers will issue a UK bank account with a sort code and UK IBAN (International Bank Account Number). Most providers will also issue credit cards, and have the infrastructure possible to allow HMRC VAT refunds to be deposited into the account. For small to medium size businesses who will be trading in different currencies, the exchange rate provided by these outlets is often much more attractive and affordable than rates quoted by traditional high street banks.
Good examples of online payment providers are Transferwise.com, Payoneer and MoneynetInt.
- UK Branches of Overseas Banks
An overlooked option is to check whether the bank in the domestic country offers banking services alongside a local branch in the UK.
This can be a great option if you already have a longstanding or good relationship with the overseas bank but the fees are higher than high street or online banks. Examples of banks offering overseas branches include Leumi and Bank Mizrahi which have a UK banking license.
- Virtual Bank Accounts
Another solution for businesses with non-resident directors are virtual banks. Just like a traditional UK bank account, virtual banks will provide a UK bank account number, sort code, and IBAN (International Business Account Number).
A virtual UK bank account will allow you to receive payments in GBP through either credit card or bank transfer, and will allow you to make payments to supplier bank accounts. You can also connect the account with HMRC to pay taxes, receive refunds, and receive payments from marketplaces like Amazon.
What’s more virtual bank account owners can make payments through a bank transfer, use ATM cards and withdraw funds to their local bank accounts in their domestic country, making it a much more convenient and effective option for many individuals.
Necessary Documentation Non-Residents Will Need
To apply for any of the above options, any non-UK resident will be required to show any of the following registration documents:
- An in date Passport
- A driving licence
- National identity card
- A proof of address, usually in the form of a utility bill which clearly shows the signatory’s name and address. (Paperwork for proof of addresses should not be more than 3 months old.)
- Company registration documents
- Recent bank or credit card statements (No more than 3 months old)
- Banker’s references
- Board resolution appointing signatories to the account.
Need help getting a UK business bank account?
At MachFast, we can help. Our app is the UK’s only free company incorporation app, and it comes with the ability to register your business and open a UK bank account. In just a few clicks your company will be set up, saving you time and hassle and letting you get on with building your empire. Download our app today!