Foreign Businesses Can Now Easily Open a Local Bank Account in Europe

Opening a local bank account for your business in another country is so darn difficult, it borders on an impossibility. If you have ever found yourself in such a frustrating situation, then you know it’s often as though all the evil forces in the world are out to prevent your business from going global.

For starters, let’s recount the many documentation-related hurdles in your way, shall we?

• You will need to register a business, perhaps a subsidiary, in an European country.
• Most European countries require a major shareholder or director of the registered company to reside in the country, in order for that new business to own a local bank account.
• To avoid the above, some businesses end up paying a resident lawyer to be the name on the new company.
• As if that’s not enough, many European banks require businesses to maintain a “footprint” in the country. A footprint can be in trading form, a resident staff, or an office.
• This means that simply registering your business in that country is often unfortunately not enough.
• You will be asked for proof of your local address–that is, your European address. In some European countries, a certificate of registration with the local police is needed.
• In many cases, you will need to visit the bank in person to open an account for your business. So if you are a US company, you will need to fly to Europe.
• Some banks will insist on seeing a local ID, which means you may have to wait to procure your residence permit. This can take several months.
• Then you will have to worry about making an initial deposit.
• You will also need to submit your credit history report.

By now, I imagine you are probably already wondering whether opening a Euro domiciliary account in your country isn’t a better alternative. Unfortunately, it’s not, as there are too many restrictions and heavy charges associated with that.

My Recommendation

For years, I have been testing some online banking services like Revolut, Payoneer, and TransferWise. These three actually allow foreign businesses to open local accounts in Europe. However, knowing what I know now, I would go with Wise, formerly known asTransferWise, in a heartbeat.

Here is why

• Payoneer works perfectly. They even issue you a debit card to go with your local accounts. The problem is their fees and restrictions on how bank accounts held with them can be used. For instance, you can receive money from a company account, but not from an individual account. There are few shady areas. Users have complained about seeing a minimum withdrawal of 1000 instead of 50.
• Revolut. They are also good, but they currently cater to European residents, with plans to expand to other developed countries like the US in the future. And since you are looking to open a local Euro account from outside Europe, Revolut can’t help you.
• In 2017, TransferWise, now known as Wise, introduced the borderless account, followed by the TransferWise debit card for business. You can open a local Euro account with actual bank details from more or less anywhere in the world. Everything happens online. No need to register a business in an European country. No frustrating legwork. You just sign up online, go through their simple verification process, then open your Euro account with just a few clicks.

What the verification process includes

• Your home country’s ID. This could be a national ID, your passport, or your driver’s license.
• A proof of address in your home country. This could come in the form of utility bills or a recent financial statement.
• No initial deposit involved. 

That’s it. None of the hurdles mentioned above is included. You can open a Wise account here.