Is there a higher success chance if you establish a business bank account through an agent or accountant? In fact, it is because they have a deeper understanding of the preparation of account establishment and related essential factors. Pacers is therefore going to explain everything for you, and you can then open a business bank account more easily.

Documents prepared before the account opening

Before the account opening, you may first prepare the originals of the below documents. Not only will the successful possibility be increased, but also the need to submit additional documents can be avoided, which can shorten the process of account opening.

1. Identity proofs, certificates of nationality (for Non-Permanent Residents or Non-Residents), and address proofs of two directors and all the shareholders who hold more than 10% of the company’s total shares.
2. Valid Business Registration Certificate（which the valid period of BRC covers the application date）
3. Valid Certificate of Incorpration. A Certificate of Change of Name is required for companies that have changed their name.
4. Business address proof (if the address differs from the company registered address)
5. Memorandum and Articles of Association
6. Ownership structure chart showing all beneficial owners
7. Certificate of Incumbency if shares are held by another company
8. Company seal
9. Company documents submitted to the Companies Registry (such as the most recent annual return (NAR1), Incorporation form (NNC1), etc.)

#If the originals of the above documents are lost, certified true copies will also be accepted.

Factors affecting account opening

When the above documents are prepared for the bank account application, it does not mean that it will be opened successfully. This is because the bank will consider the background and other information of the company and its directors. The following are some factors affecting the account opening.

i) Status of documents submitted to the Companies Registry

To understand the company background, company documents submitted to the Companies Registry are one of the pieces of information that the bank must check. If any documents submitted are being processed or with problems, as the bank cannot confirm the company background, the account application will not be processed before the documents are approved. Therefore, you may check whether any document is being processed by the Companies Registry before applying for a bank account.

ii) Whether the company, directors, or beneficial owners are on the International Sanction Lists

If the company, directors, or beneficial owners are on the International Sanction Lists (such as the U.S. Department of the Treasury, Office of Foreign Assets. Control Sanction List), the bank will reject the application.

iii) Business Nature

Banks will also evaluate the business activity of the company. If a large amount of capital flow is required in the daily operation (such as currency exchange stores and jewelry stores), the bank will regard it as a high-risk industry, making it more difficult to open a bank account. In addition, if the company has not actually operated for a long time, the bank may doubt the reason for opening an account. Unless there are acceptable reasons, the bank will generally reject the application.

iv) Directors’ background

The directors’ background is also one factor affecting the account opening. Banks will evaluate the sustainability of the company when considering the application. For example, if directors’directors’ working experiences and education are helpful for the business operation, there will be a higher chance that the application will be approved. Directors’Directors’ personal bank accounts will also be considered. If there are frequent unusual large withdrawals in personal accounts, it will raise the difficulty of setting up the account.

In addition to the above factors, there are other factors affecting the account opening, such as directors having personal accounts and purchasing funds and stocks in the same bank. But since each bank has different screening requirements, we are not going to discuss all the factors.

Account Establishment Fee and Minimum Balance

Different banks charge different account establishment fees. In general, bank will charge $800-$2,000 for opening an account. Furthermore, as banks will evaluate a company’s sustainability, there will be a general minimum balance requirement of $50,000. Banks may charge an extra handling fee if the minimum balance is not maintained.

Conclusion

Banks have strict requirements for account opening and multiple departments for application review. Even if the agent or accountant has acquainted staff in the bank, it is impossible to open an account without any requirements. But if you have prepared sufficiently and understood the requirements, you can open an account successfully on your own.

Pacers is a diversified company providing professional consultancy services. We always think a step further for our clients. If you have encountered any difficulties when purchasing a company, please feel free to contact us directly on our website or email info@pacersconsulting.com. Want to hear more techniques and examples of company acquisition? Follow us on Facebook, Instagram, and Google now to stay on top of our latest news!