How to Successfully Open a Business Bank Account in the UK as a Non-UK Resident Director?

Setting up a business in the UK can be a challenging process, and one of the most difficult parts is opening a bank account. There are two options available for opening a bank account, either through a traditional bank or an EMI. For those who may not be familiar with EMIs, they provide digital payment services, including the issuance of electronic money, money transfer services, and digital wallets. EMIs are authorised and regulated by financial authorities and can operate either as standalone institutions or as subsidiaries of traditional banks. EMIs and banks in the UK are subject to strict regulations such as the Money Laundering Directive (MLD) and Know Your Customer (KYC) policies, which makes onboarding a new customer a high-standard process. This process can be even more complicated for non-UK resident directors, especially after Brexit. However, with the right approach and understanding of the process, non-UK residents can open a business bank account in the UK.

Using Nominee Directors is Not Recommended

Prior to sharing some tips with you, we would like to mention that certain companies may suggest the utilisation of nominee directors as a means of streamlining the bank onboarding procedure. A nominee director is a person appointed by a beneficial owner or shareholder to act as a director on their behalf. While legally considered a director of the company, the nominee director’s role is typically limited to fulfilling administrative or legal requirements, as they are appointed to represent the interests of the beneficial owner or shareholder. Despite this, nominee directors are still subject to the same legal responsibilities and duties as any other director of the company.
Although it may appear to be a feasible option for non-UK resident directors to engage a UK resident nominee director, it is not recommended. This is because nominee directors may lack the same level of comprehension of the business as the beneficial owner. Nominee directors may be required to attend meetings with high-street banks and respond to queries regarding the business, which could raise concerns and result in the bank denying the opening of a bank account. An additional disadvantage is that the beneficial owners would need to rely heavily on the nominee directors, needing their assistance for every bank-related procedure. This reliance also entails a significant level of trust since the nominee directors are the ones with access to the bank account. This scenario could also be perceived as a potential money laundering scheme intended to conceal the identity of the business’s beneficial owner.

Therefore, are there any other options available for opening a bank account that do not involve the use of nominee directors?

If you’re a non-UK resident director looking to open a bank account, there’s good news: some banks or EMIs are open to this possibility, particularly if the financial institution has branches abroad where the director resides. However, it’s important to do your research and exercise caution, as certain banks or EMIs come with high application fees and monthly charges, including balance and transaction fees for inbound and outbound payments. To help you navigate the different options available, you can check out a list of EMIs in Europe on https://thebanks.eu/, which highlights Lithuania as a country where financial institutions are more open to opening bank accounts for UK companies with foreign directors. And if you prefer a British bank, rest assured that there are still a few choices out there for you.

After you have selected the bank that suits you best, there are several tips to keep in mind.

Tip 1: Verify if Banks or EMIs Accept Applications from the Country of the Beneficial Owner’s Residence

Before submitting your application to a bank or an EMI, it’s essential to confirm that they accept applications from the country where the beneficial owner of your business resides and that you can provide adequate proof of address. Be aware that some banks or EMIs may require certain documents to be legalised, and it’s crucial to ensure that you complete this process with the appropriate body, as certain legalisations may be refused. By following this tip, you can avoid potential hurdles in the application process and expedite the opening of your bank account.

Tip 2: Provide Comprehensive Information on Your Business Activity

When applying for a bank account or EMI, it’s essential to provide as much detail as possible regarding the activity of your business. Firstly, make sure you have a clear Standard Industrial Classification (SIC) code that corresponds to your business activity, as this might be checked on Companies House. The bank or EMI might also ask for invoices or contracts to prove the legitimacy of your business activity. If you’re a new business, this might be challenging to provide. However, you can build credibility by creating a website for your business and having a LinkedIn profile ready for the business owner to demonstrate legitimacy. It’s critical to ensure that all information on invoices from customers or suppliers is scrutinised, as it will be verified. For example, registration, VAT numbers, or websites of customers will be analysed to ensure that they are correct and can be found. By following this tip, you can increase your chances of a smooth application process and a successful account opening.

Tip 3: Obtain the Necessary Licenses or Authorisations for Your Business

It’s crucial to ensure that your business has the appropriate licenses or authorisations if you engage in regulated activities. Banks and EMIs may refuse to open an account for your business if you lack the necessary authorisations. For instance, if you operate a business involved in finance, you must obtain the required licenses to prove the legitimacy of your business activities. However, some businesses might still face difficulties obtaining an account due to the high-risk nature of their operations such as gambling companies. Thankfully, solutions exist in the market for high-risk businesses that provide alternatives to traditional banking options. These solutions might involve working with specialised financial institutions that are experienced in serving businesses in high-risk industries. By following this tip, you can avoid potential setbacks and ensure that your business is compliant with all necessary regulations.

Tip 4: Provide Detailed Information About Your Business Model and Transactions

When opening a bank account for your business, you must provide accurate and precise information about your business model and transactions. The bank or EMI will typically ask for details such as the volume of transactions and the countries in which your business operates. This is to verify the legitimacy of your business and ensure that it’s operating from the UK and not another country. EMIs or banks might be intrigued if you only have customers from outside of the UK. This may raise questions about the motive to have a business registered in the UK. It’s important to be consistent in your project and be transparent with the bank as they will verify the information provided. To ensure that your account application is successful, you should provide complete and truthful information about your business operations and be prepared to answer any questions that the bank may have. Additionally, it’s important to verify that the countries and currencies you deal with are not restricted by the bank or EMI. This information can usually be found on their website. By following this tip, you can avoid potential complications and ensure that your account application is approved swiftly.

Tip 5 – Provide A Clear forecast Of Your Business Activity

One crucial factor in the bank onboarding process is providing a clear forecast of your business activity. This may include forecasted cash flow or financial statements to give the bank or EMI an idea of the viability of your project. It’s important to ensure that your company filings with Companies House are up-to-date and that there are no irregularities. This can help build trust with the bank or EMI and increase the likelihood of a successful onboarding process. Additionally, having a solid business plan and strategy in place can demonstrate to the bank or EMI that you are a serious and committed entrepreneur. This can go a long way in securing their confidence in your business and facilitating a smoother onboarding process.

Tip 6 – Have A Solid Business Plan

Developing a comprehensive and convincing business plan is crucial when it comes to obtaining a bank or EMI account. The bank or EMI will want to understand the nature of your business and how it will generate revenue. Therefore, you need to provide a well-structured and thought-out plan that outlines the goals, objectives, and strategies of your company. The business plan should contain detailed information on the target market, competition, marketing plan, and financial projections. By doing this, you are not only convincing the bank or EMI that your business is viable but also showing them that you have a clear understanding of your business and its potential. Having a solid business plan will also help you stay focused and motivated towards achieving your goals.

Tip 7 – Be Patient And Persistent

Opening a bank account in the UK as a non-resident can be a tedious process that requires a lot of patience and perseverance. The application process can take longer than expected, and it can be frustrating waiting for updates from the bank or EMI. Therefore, it’s crucial to remain calm and persistent, regularly following up with the bank to ensure your application is progressing. However, keep in mind that banks may require additional documentation or information, and it’s important to be prepared to provide it promptly. Remember, the key to success is perseverance and being prepared for any additional requests that may come up during the process.

Tip 8 – Consider Using A Professional Service

If you find yourself overwhelmed or struggling to navigate the process of opening a bank account as a non-UK resident, don’t worry, you’re not alone. Consider using a professional service that specialises in assisting non-UK residents with opening bank accounts. These services are specifically designed to make the application process easier and more efficient. They can help you gather the necessary documentation, ensure that your application is properly filled out, and increase your chances of success. Moreover, they can provide valuable insights into the UK banking system and offer advice on which banks or EMIs are most suitable for your needs. While there is usually a fee associated with these services, the time and energy saved may make it a worthwhile investment in the long run.

Tip 9 – Maintain Good Communication With The Bank

Maintaining good communication with the bank or EMI is crucial after opening a bank account as a non-UK resident. It’s essential to keep them informed about any changes in the business and provide them with accurate and updated documentation. Good communication helps build a strong and trustworthy relationship with the bank, which could potentially result in additional financial services being offered. Moreover, regular communication ensures that any issues can be addressed promptly, avoiding any complications or misunderstandings in the future.

Tip 10 – Stay Compliant With Regulations

To ensure a smooth and long-lasting relationship with your bank or EMI, it’s crucial to stay compliant with the regulations they’re subject to. Anti-money laundering (AML) and know-your-customer (KYC) requirements are just a few of the regulations that banks must follow. It’s essential to be aware of these regulations and to comply with them to avoid potential legal consequences or even the closure of your account. Keep in mind that once the bank account is opened, the bank may review some transactions and may request additional evidence.

In conclusion, opening a bank account for a non-UK resident director can be a daunting and frustrating process, especially in the post-Brexit era. However, it is not impossible. By following the tips provided in this article, you can increase your chances of success and obtain a business bank account in the UK.
Remember to do your research and choose a bank or EMI that is willing to work with non-UK resident directors. Be prepared to provide detailed information about your business and ensure that you are compliant with all regulations.
It’s also important to maintain good communication with the bank or EMI and to stay patient and persistent throughout the application process. If you find the process overwhelming or too time-consuming, don’t hesitate to contact operviser, and our experts will guide you through the process.