- What constitutes the cost of opening a foreign bank account?
- What documents are required when opening an account in a foreign bank?
- Why do you need professional intermediaries, and what is the cost of their services?
- Bank fees for reviewing a new client
- Courier document delivery
- Other non-banking technical expenses
- Account maintenance after opening
- How to open an account in a foreign bank
The cost of opening an account in a foreign bank is higher compared to a similar service offered by local banks. Let’s delve into the factors that contribute to the price of a foreign account and identify the associated expenses.
What constitutes the cost of opening a foreign bank account?
In a local bank in your country, you can simply visit a branch to open an account or do it online through the bank’s website. For most customers, the process itself will not incur any charges, and only standard fees for account maintenance or card issuance will apply later.
However, the situation differs when dealing with foreign banks. The cost of account opening can range from several hundred to several thousand dollars or euros.
The components of the account opening cost in a foreign bank include:
- document preparation, including translation into English or another language (depending on the country)
- payment for services provided by a professional intermediary (why use such services will be explained further)
- bank fees for reviewing a new client
- document delivery by courier
- other non-banking technical expenses
- account maintenance after opening.
Depending on the chosen bank and your citizenship/residence, certain stages may be inexpensive or free, while others could be considerably more expensive.
What documents are required when opening an account in a foreign bank?
The cost of document preparation for opening a foreign bank account depends on your citizenship, country of permanent residence, and the bank where you intend to open the account.
In most cases, two documents are sufficient to get started:
- document verifying your residential address, not older than three months.
These documents will need to be translated and certified. Translation costs typically range from USD 10 to USD 50 per page, depending on the language, while certification fees follow the rates set by the notary. If additional documents are required, such as proof of the legality of funds, CV, or recommendations, they will also need to be translated.
The bank reserves the right to request additional documents at any time.
It is important to note that documents play a crucial role in the bank’s decision to accept you as a client. Even minor errors or inconsistencies can lead to a denial of service. This is one of the reasons why seeking assistance from professional intermediaries is advisable.
Why do you need professional intermediaries, and what is the cost of their services?
In the world, despite the complexities involved, there are a sufficient number of banks willing to work with foreign clients. However, due to stringent laws, high penalties, and other risks, it is not advantageous for banks to open accounts for just anyone. Of course, you are not just anyone, but the bank has no way of knowing that. Therefore, there is no reason for a foreign institution to trust you implicitly.
The only way to demonstrate your legitimacy as a prospective client is by providing impeccably prepared documents. And this is where numerous pitfalls lie.
For example, among our partners, there is a bank that rejects clients if they fill out the application forms in black ink instead of blue ink. There are also banks that refuse clients because their signature exceeds the designated rectangular area. Such cases are not uncommon.
In addition, there can be factual errors or inconsistencies in documents that automatically raise a red flag. This serves as a signal to the bank of potential problems or risks which may result in the termination of client services. The intermediary ensures that such issues do not arise and diligently oversees the process.
However, there is a more grounded reason why utilizing the services of professional intermediaries is justified: many banks do not accept clients off the street and only work with individuals or entities represented by trusted partners. This can be as serious banks requiring million-dollar deposits from clients, so ordinary retail banks that prefer not to advertise their collaboration with foreign clients openly.
Therefore, an intermediary is not only someone who verifies your documents and provides guidance on completing them. They become your colleague and representative within the bank. Sometimes this acquaintance is purely virtual, while other times, you may be accompanied to the bank to open a bank account.
The cost of intermediary services depends on the type of account (personal or corporate), the financial institution (payment system or bank), and the financial institution’s country. You can find our prices in the services section for further information.
Additionally, an intermediary will assist you in selecting a bank that suits your specific conditions and requirements. The range of available options is extensive, but each bank has its nuances. While you may dream of a particular bank, it may not be willing to open an account for you at this time, and approaching it could create an adverse history for future applications. Our experts will guide you toward banks ready to collaborate with you today and assist you in opening a foreign account.
Please note that our experts provide the account selection service absolutely free of charge, so we recommend taking advantage of it right now:
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with seasoned professionals on international
banking and where it is best to open
non-resident corporate accounts.
with seasoned professionals on international banking and where it is best to open non-resident corporate accounts.
Bank fees for reviewing a new client
The cost of opening a foreign account further depends on the specific bank’s requirements. More and more often, banks and payment systems charge a fee for reviewing an application. In some cases, this fee amounts to a few hundred dollars, while in others, it can reach a couple thousand.
These fees cover the hours of work by the compliance department, the verification process through various databases, and even the analysis of your social media presence and online mentions.
Banks adhere to KYC (Know Your Client) and AML (Anti-Money Laundering) legislation requirements.
In some banks, transferring a security deposit may also be necessary. Sometimes this deposit is required even before the bank makes a decision, while other times, it must be transferred immediately after approval but before access to the account is granted. Typically, this applies to cases involving contracts worth millions of dollars or activities falling into the high-risk category.
Check out the ranking of the largest and safest banks in 2023.
Courier document delivery
When opening a foreign bank account remotely, significant cost savings can be achieved if documents are transmitted electronically. This is the case with many digital banks and payment systems.
However, traditional banks, such as Swiss banks, prefer paper documents with all the necessary signatures and notarized stamps. This means that courier delivery is required. In some regions, this service may cost around USD 100-300, but this price ensures timely delivery of the documents. In some countries, international couriers do not provide services, necessitating the consideration of alternative methods, which can increase costs.
If a personal visit to another country is still required, the cost of opening the account should also include expenses for accommodation, airfare, and visas.
Other non-banking technical expenses
Some banks impose additional requirements on foreign clients, which increase the cost of opening a foreign account. These requirements may include:
- Having a local phone number for internet banking access or receiving notifications.
- A local address (or an address within an economic zone, such as in the EU) – this should be a verified address where the individual permanently resides or has a long-term rental agreement. A local/relevant residence permit or permanent residency may also be required.
- System verification of the accuracy of the provided data (addresses, documents, proof of residence, etc.).
Please consult our experts to determine the specific requirements you need to fulfill to open a foreign account.
Is offshore banking legal? Find out the answer in our new article!
Account maintenance after opening
Despite having already listed the main components of the account cost abroad at the time of opening, it is worth mentioning the following. Naturally, there will also be fees associated with using a foreign account. These expenses include:
- monthly fees ranging from a few euros for individual accounts to USD 1000+ for corporate accounts engaged in a high-risk business
- transfer fees, especially for international transfers
- fees for receiving funds (particularly in offshore banks)
- currency conversion costs
- ATM cash withdrawal fees
- issuance fees for credit and debit cards
- inactivity fees, penalties for falling below a minimum balance, and fees for violating other rules.
It is essential to study the costs of all the necessary services before opening an account. In some cases, paying for the bank’s verification during the opening of a foreign account may be preferable rather than paying higher monthly fees.
How to open an account in a foreign bank
To open an account in a foreign bank at a reasonable cost and with a high level of reliability, we recommend the following algorithm:
- Determine the objectives you wish to achieve, the services you require, the expected transaction volume, and the countries you operate in.
- Seek a free consultation for selecting a bank account from our team by emailing us at email@example.com.
- Once you receive our recommendations, gather the required documents and proceed with us to open an account in a foreign bank.
Thanks to our experience, the account opening process will proceed smoothly, quickly, and at a reasonable cost. After it, you can begin using the account for your intended purposes, just as planned.