What Do Banks & Fintechs Require To Open A Bank Account?
This post was first published at our BankApply blog.
Opening a bank account in Europe is a lot like dating. You have to do your research (or use BankApply which has done the research for you) to find the banking options you like and trust, and the banks or fintechs have to “like you back”. The most complicated part is finding the right banks and fintechs. Fintech companies, which are usually licensed as e-money institutions, have a list of documents and information which must be submitted. It goes without saying that for high-risk clients, such as crypto companies, companies with residents outside of EU, non-EU companies, offshore companies, gambling, adult services, the list of documents is quite extensive.
To set up a company, one does not need to have a payment account. However, in order to be operational, it is a must. In Fintech world, it often happens that an account is needed urgently for different reasons. The company cannot raise funds, pay salaries or just accept payments for its services/products. This article is about what a company will need to have in place to fill in the application and respond to additional questions in a smooth and fast way during the account opening process. Let’s take a look at the standard requirements you will face once you start the account opening process.
1. Information about the company, directors and UBOs
Data about the company and persons involved such as name, telephone, email address, resident/registration/actual addresses etc.
2. Description of your business
You know your business better than an online bank. Prepare a clear short description of what you are planning to do and why you need a bank account.
3. Official documents
You will need to submit Articles of Association and registry extract where all the data about founders, directors and beneficial owners are available. More often than not, these documents need to translated, notarized and apostilled.
4. Group structure
If you have a group of connected companies, prepare a group structure chart for a better understanding, so the banking provider has a clear understanding of how the structure is set up. It’s vital that the (online) bank would see that you have nothing to hide and you’re very transparent how things are set up.
5. Documents
Prepare the identification documents of directors and UBOs. These can be passports or national ID cards.
6. Proof of address
You will need to prove your residency. Usually, a utility bill is required to prove your address and residency.
7. Proof of website
On some cases, you will need to prove that the domain address of your website belongs to you.
8. Transactions information
Estimated amount and number of outgoing and incoming transactions per month is asked by all (online) banks. That’s a standard question with all account opening applications, business or personal accounts.
9. Latest annual report
If you have a financial annual report, it will be required by the (online) bank. If you don’t have one, then you do not have to submit one. It will be a problem if your company is many years old, but has not prepared nor cannot submit the annual reports for previous years. In some countries, it’s not a requirement to prepare and submit financial year information, but this also means the jurisdiction is a high-risk category.
10. License
If your business needs a license, apply for a license first and then apply for an account. If you have a license, please prepare the document proving this.
11. KYC/AML compliance documents
If you are an obligated by the law to undertake KYC/AML due to diligence measures of your customers, be ready to submit the internal AML rules of the procedure along with the application.
12. Agreements with KYC outsourcing partners
Continuing with AML compliance, in most cases, some parts of KYC/AML are outsourced. Therefore, online banks want to see these agreements with KYC/AML providers. Such agreements can be for ID verification (for example, Veriff) or checking the blockchain addresses for AML risks (for example, AMLbot).
13. Proof of source of funds
Be prepared to submit your proof of source of funds. It can be dividends, salary, sale of a business, third-party funding, etc.
14. Agreements with business partners
Banks would like to know your business partners. It is good if you have an agreement with them to present to the banks. If you don’t have an agreement in place, you might have a price quotation or offer, e-mail communication, or list of potential partners you can present — something is better than nothing, as it shows your intent to do real business.
15. Legal kit for the website
Some banks require a Privacy Policy, Terms and Conditions, and the AML policy of the website. This type of documentation is another sign that you mean business and you follow all the required best practices. Banks and online banks want to see the signs that you’re a trustworthy business. Comistar can help you to prepare the required legal documentation for your bank account opening.
Conclusion
These are the things that are required to open a business bank account or Fintech account in Europe. Low-risk clients usually have fewer requirements to meet compared to high-risk clients like crypto businesses. For low-risk clients, it’s usually sufficient to supplement all company legal documents like Articles of Association, UBO data, business description, and sometimes business partners information/agreements.
For personal accounts, it’s mostly passport copy, utility bill, the purpose of the account. You may need to prove tax residency as well.
Read how you can find a banking provider for your crypto business here.
Read why it makes sense to have a bank account in multiple jurisdictions here.
