Banking is a current issue for many international business operations and for investments and family wealth.
Whilst the advantages of privacy or low taxation in a banking location are typically considered, it is safety that is now the main concern.
Protection against local, political, or financial instability is currently the most important feature in international banking. The UK offers that protection.
* Z/Yen & Qatar FCA Jan 2013 – Based on over 80 indices from organisations such as the World Bank, the OEDC and the Economist Intelligence Unit.
Do you require safe banking from the UK?
– Offering protection against political and financial instability.
International clients located outside of the UK may need third party help to operate bank accounts through transaction management services.
Banking services generally include credit facilities, deposit taking, foreign exchange, fund and investment management, letters of credit and trade finance, trustee services and funds transfers. The latter and all services for processing receipts from customers and payments to suppliers, together with associated multi-currency operations, are considered to involve transaction management.
Put simply, a transaction is the process of money transferring from one place to another. However transaction management is not just about moving cash; it is about the security requirements that come with it. It is about the assurance that complex processes are as streamlined as possible. Moreover it concerns the confidence that such arrangements operate within a global banking system that is now increasingly regulated against money laundering.
Is this Off-shore banking?
We can appreciate that for many of our international clients a UK bank is located outside the country of residence and thus can be considered as being off-shore. That is a status that can be often associated with suspicion of tax evasion or money laundering. However as home to some of the World’s most respected international banks the UK can offer all required banking services from a highly regulated, and widely viewed as safe, location.
Opening a bank account
Traditionally, in order to open a new business account, a bank needed to know the background of a new customer or its business. In modern times banks in all countries also need to be aware of international arrangements to fight money laundering. Indeed it is these arrangements that now represent the principal focus for procedures to establish banking arrangements.
As an established base for international banking and finance the UK banking industry operates very strict compliance. The central feature involves Customer Due Diligence, being a Know Your Customer (KYC) approach which is based on knowledge of a customer and the related business.
Opening a bank account is an event that is focused on controlling money laundering. Consequently that is a key issue that needs to be fully understood at the time that banking arrangements are sought.
Money laundering means the exchange of money or assets that were obtained criminally for money or other assets that are “clean”. The clean money or assets do not have an obvious link with any criminal activity. So the source and ownership of criminally derived wealth and property is changed to give it a perception of legitimacy.
Simply stated, international and national measures to combat money laundering, require the reporting of any suspicion of money laundering in business activities. Usually most attention is given to banking transactions.
The most common source for suspicion features international banking. Countries of the EU must comply with directives on transfers and payments which set out key tests. Transfers in major currencies are regularly monitored by powerful systems operating from the principal World financial locations. The KYC tests for both remitter and receiver of funds are very important in these controls.
In business, as in life, those that follow the Law should have no fear of it. However it is important to recognise that, against all general principles of fairness, suspicion is enough to suggest that business activities might involve money laundering. Effectively a business can be “guilty” of suspicion before being shown to be innocent of money laundering.
Our concern is that clients should avoid any business practice that can give rise to suspicion. Banks share that view.
Choosing a bank
International business is best served by a bank with an international presence. The UK is home to some of the World’s best known international banks. So in terms of image a UK registered company benefits from operating with a UK located bank.
Bank requirements for a new bank account
The usual requirements for a bank to consider a new company customer cover the following guidelines. First they need to know about the business:
- Incorporation details of the company
- Business name and address, and legal status
- Contact details
This can be provided from the information recorded at the Companies House.
- Nature of business
- Start date (if applicable), anticipated turnover and funding requirements
For a new UK company that is associated with an international owner with an existing business, this can require release of much information.
A bank will also need some personal details about those who will be involved in the business banking arrangements:
- Personal name and address
- Date, country and city of birth; and country of nationality (this is easily discharged by reference to a passport)
- Details of residency / home address
- Date you moved into your home address
- Previous address details
- Existing bank account details
Note here that there is considerable reliance placed on residency. If this involves several addresses, or even several countries, then all must be revealed. Moreover evidence of residency is required. Such evidence usually requires sight of original utility invoices, or any official documentation that records a residential address.
Personal details must be verified on the “banks premises”. A visit to UK would be best but this can be at a foreign branch of an UK bank
Introduction to a bank
A full range of banking services are available from all UK based international banks. We recommend use of Internet banking systems and have developed applications for our clients to ensure their participation and direction to transaction management.
Banking cannot operate in isolation from the overall arrangements for the business and any links to investments or family wealth. Consequently consideration and re-assessment of a client’s corporate structure may also be needed.
We are aware that nationals of some countries may need to consider currency regulations in their home country and how these might be compromised by their personal involvement with a UK bank.