Foreward by Andrew Chilvers
For companies and individuals looking to move into new jurisdictions for business opportunities, setting up a bank account is a crucial part of the process. But this is never as straightforward as it seems.
In all countries, banks are obliged to crack down on fraud and any potential financial scullduggery. As a result, they tend to be very risk averse. Regardless of where a business establishes an office in the world, local banks will generally have the newly arrived expatriates jumping through various hoops, pulling their hair out in frustration.
The new arrival will need the relevant paperwork, including personal identity papers, a personal and business address, personal references and other numerous documents. And that’s just the beginning.
Every jurisdiction has its own banks and banking rules, which are often complex and bureaucratic. Consequently, seeking advice from local legal and financial experts before setting up a bank account is imperative if a company is it get the right account for its particular business objectives. This is why it’s so important to use local advisers who are experts in the jurisdiction to provide information about the local banking rules.
What is the general risk appetite of banks in your jurisdiction and how does that affect setting up a new business bank account?
Like most other jurisdictions, financial institutions in Ireland are conservative in these times when it comes to their risk appetite for opening bank accounts for those not known to them. This is even more so since the financial crisis. Our financial institutions like to display an “open for business” attitude, but in practice prospective applicants need to fit in with their preferred business model type and their client risk assessment will then be evaluated in line with this before a decision is reached on the account opening.
The procedures for all businesses are generally consistent for companies incorporated on the Irish Registrar with one additional requirement of note for companies incorporated outside of Ireland. Such companies require a completed legal report and this form needs to be signed and stamped by a law firm in the same jurisdiction in which the company was formed. The legal report must confirm the company’s general particulars along with confirmation that no insolvency procedures are being processed in relation to the Company and the details of all charges, mortgages, liens and other security interests affecting the assets of the company.
We will advise our clients to set up with the bank that meets their objectives upon assessing their needs and taking into consideration how easily it is to conduct their banking requirements remotely. If a company feels they may have a requirement for a working capital or finance facilities we would always recommend that they open accounts with our pillar banks who have a retail presence.
Our office has established relations with all the main pillar banks operating in Ireland. Our corporate services manager previously worked with Bank of Ireland and has maintained close contact with her former colleagues. We therefore consider that we are uniquely positioned to assist and advise on the opening of bank accounts for international clients looking to set up bank accounts in Ireland.
How accommodating are banks in your jurisdiction for opening a business and personal bank account?
Financial institutions in Ireland are willing to do business both personal and business once there is a clear need for their services and compliance procedures and checks have been fulfilled. Based on our experience there is no scope for any special allowances or “once offs” to be taken into consideration when hoping to secure the banks services.
Anti-Money Laundering procedures for new business should follow a prescribed format but, in some cases, this can be varied from institution to institution. More detailed information can be requested if the company is deemed to be high risk by the bank which often leads to frustration for the client and unavoidable delays in the progress of the application. As standard practice, the following items are required for business account opening in Ireland:
• Bank Account application;
• Copy of Passport and one address verification dated within the last 6 months for each director (maximum of 2 directors), company secretary and any shareholder with 25% or more holding. If any of the above live outside the EEA, then two forms of address verification are required from two different providers;
• Certificate of Incorporation;
• Copy of Constitution or Memorandum and Articles of Association.
• In addition to the above some, financial institutions in Ireland can request additional items which are not standard listed below:
• A list on company headed paper of all directors, including occupation, address and date of birth, signed by the Company Secretary;
• A list on company headed paper of all shareholders with 25% or more of the issued share capital, signed by the Company Secretary.
Financial institutions in Ireland state that they will only open a personal bank account for non-resident individuals if they have a direct link with Ireland for example they work for an Irish company or they have a controlling interest in an Irish company. The same identification documents are required for all individuals which include a copy of passport and address verification dated in the last 6 months (two forms of address verification required if living outside the EEA). In some instances certification of these documents are required.
The processing times for opening a business account take longer than personal accounts. Personal accounts can be opened in a matter of days. The processing times we are experiencing at present can take anything from two weeks to two months in very complex cases. Once the bank has signed off on compliance and is happy to proceed the account will be opened in a matter of days.
Should you join an internationally reputable or established bank rather than a local bank?
The decision to join an internationally reputable or established bank rather than a local bank depends on the nature of the activity, the banking services needed and the planned future direction of the company. Some companies will form based on trading in a local market and for these types of companies a local bank would be sufficient. Some companies that plan on dealing on a global scale would be more suited to an Internationally reputable bank. You need to look at each client and their business plan and provide advice best suited to their needs.
We believe it is easier to open a bank account with a local bank that will have a networked, retail presence on the ground. If you are trading in the country in which your company has been formed, you have the added comfort of having a one-to-one relationship with your account manager and have easy access to the retail network. If you are dealing with an internationally established bank you may not have this type of personalised service or may not have retail offices where you can attend.
We try to educate clients and manage their expectations when it comes to advising and handling the process of opening a bank account whether it be with a local branch or alternative provider. We make recommendations based on their business needs and provide the pros and cons of each suggestion. We have developed strong working relationship with our clients and they value our input, knowledge and honesty with the process.
Based on feedback obtained from clients who we have worked with previously on international banks, their views would suggest that they undertake similar vetting procedures as the local options. In very specific high-risk cases and individual to each company the bank may request additional documentation.
