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Where to Open a Foreign Account for Your IT Business?

Companies related to information technologies (IT) are perceived as high-risk businesses by banks and financial and credit institutions. This fact complicates the procedure of opening a bank account in the same way as for other high-risk undertakings, like those related to gambling, Forex, and brokerage companies.

A Foreign Account for Your IT Business

This fact should be taken into consideration first of all when you choose a bank to receive the services from and the country where it is located. The location is just as important due to the limitations set by the countries and the banks themselves regarding the jurisdiction where the company is registered and the residency of its beneficiaries (founders or shareholders). 

Corporate Account for IT Business: Reasons for Refusal and Alternatives

When you apply to open a corporate account, few people expect to be turned down if their business is related to information technologies. This is one of the most popular niches in the present-day world, and it seems that banks, on the contrary, have to be interested in such customers.

The reasons why the bank may refuse to open an account for an IT company may include some standard errors that may result in service denial for any customer (mistakes, typos, false information, and so on) and specific reasons related to the high-risk business area. In the case of IT companies, refusal may be related to the following:

  • Banks check their customers and request them to confirm the sphere of activity and the source of income. This is in no way their whim as they take care of their reputation and implementation of compliance control norms as part of anti-money laundering and financial fraud measures.
  • And even though IT companies are not related to high-risk niches by their structure, they still may have direct connections with these. For example, they may develop software for a porn site or a brokerage company. They may also provide hosting services to fly-by-night websites, fraudsters, or high-risk companies.
  • The bank may check all of its customers for the origin of funds, which requires submission of a contract with corporate documentation that specifies the addresses and names of partners and assets. The problem is that an IT company that provides the services of various mobile apps development may be unable to provide signed agreements with potential customers in 100% of cases. 
  • And even if an IT company has a website (and it must have one) and it contains clear and understandable information, who can prove that it is true to life? It is not always possible to track the purpose of the software or determine the subject of a transaction at the stage of account opening, which carries the risk of fraud.

However, not all financial institutions are so undeterred in their decisions: some of them simply set individual conditions for high-risk niches. These may include different tariffs, requirements for the company’s real presence in the country where the bank is located, more meticulous verification of transactions, and so on.

Want an alternative to traditional banks? It exists! You can read more details about it here.

Where Can IT Companies Open an Account?

You can open an account for an IT company in practically any country if you know where to go and what to do. So where can IT companies open an account and expect their application to be accepted with the highest degree of probability?

  • European banks and payment systems. Some of them service high-risk companies, such as IT businesses. However, they may request confirmation of all their operations and conduct stringent due diligence on the company and its partners. In 90% of cases, they will open an account to companies based in EU countries or EU-friendly European jurisdictions. You can also add the UK here as it offers several financial channels for high-risk business spheres and does not require the company to be present in the country of registration.
  • Banks and payment systems in the CIS (not in all countries, though) are also open for foreign IT companies. For example, Kazakhstan is ready to open an account to such companies subject to certain conditions, including higher rates and commissions.
  • Banks in Asia and on other continents are a good option for IT companies that operate in many countries. For instance, you can opt for Mauritius where you can open an account for different business spheres, including IT specialists. You can also explore the promising continent of Africa where IT companies are free to open an account for personal and corporate purposes. In addition, you can opt for Singapore whose banks are also willing to work with IT companies.
  • Offshore banks and global payment systems are one more promising option for companies related to information technologies or other high-risk niches. 

In any case, the choice of banks suitable for IT specialists is limited and should be based on the recommendations of seasoned experts who have practical experience in dealing with the financial industry. You can read more details about an option that we consider highly recommendable.

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Where to Open a Merchant Account for IT Business

As the IT industry is not directly related to a particular jurisdiction or any physical objects or assets, for instance, a production site or warehouse premises, its geography encompasses all territories. That is, you can work everywhere regardless of the country where the customer resides. 

The first important thing is to competently organize the company’s website. But how will you accept payments? You will have to deal with various countries, continents, laws, and currencies, and this may be tricky.

You can use cards and transfers via a website.

The majority of accounts open merchant accounts along with corporate ones. A merchant account will make it possible to set up payments acceptance from customer cards whose data is entered on the company portal or via a POS terminal to pay for the services. The procedure is identical to the one used in any Internet store: input, transfer, and confirmation.

As the IT sphere belongs to a high-risk category, not all financial institutions agree to open merchant accounts for such companies. You can set up a merchant/acquiring account in one institution to simplify the company’s operation. However, you will need to study the products and the conditions offered by a payment system or a financial institution.

FYI: you can open a bank and a merchant account in the same financial institution only if the payment system is linked to the bank or it allows opening individual IBANs inside its system. However, you will have to open two accounts in most cases (a merchant and corporate one) – and sometimes use different financial institutions for that.

Guaranteed Account Setup for an IT Business

No one will give you a 100% guarantee, but you can reduce the risks of service denial by doing two things at once: account + IT company registration. That is, you will need to start a business in a country with beneficial tax rates and conditions (you may even get a residence permit for business registration) and simultaneously open a bank account for it.

However, this may be quite challenging if you venture on your own. If you feel that your expertise in the field may be insufficient, you can use the services of our experts

If you want to complete the procedure by yourself, keep in mind that it is much easier to register a company than to obtain the bank’s approval afterwards. That’s where the pre-approval service will come in useful: you will be able to send an application to several financial institutions.

If you have any questions left, do not hesitate to ask them. We will help you satisfy your needs quickly, and you can rely on our professionalism and confidentiality.

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