Opening a business in the United States is not possible unless you have a business bank account there. As a non-native entrepreneur, if you want own a business in any state in the nation, then how to open a US bank account for foreign entrepreneurs should be the first thing you should search for. The bad news is that you cannot operate a business in any state without it but the good news is that you can create one even if you don’t live in the United States.
As an international entrepreneur, it is understandable why you wish to include the US in your business portfolio. For that purpose you need to maintain a separate business account in a bank in the state where you wish to establish a business. This way the IRS will not hound you and it will also provide you with a better way to manage your new company’s cash flow.
Granted it might not be easy to do. After the events of 9/11, the Patriot Act was passed which prevented foreign investors from opening a bank account in the US. For that reason strict regulations have been set in place for all banks in the nation and this includes stringent document verification practices to confirm the identity of a new client.
However, you can open an account in a US based bank if you follow a few steps and fulfill important requirements. There are methods and alternatives both which can work for a potential foreign business owner.
Typically it is possible to open a US based bank account from foreign locations online if the bank offers this service. Some of the ones that do offer online banking include EverBank, Silicon Valley and eTrade even though it is basically a brokerage. There is no harm in trying this especially if you cannot make it to the US to open an account in person.
However, keep in mind that most banks that offer online banking also require a SSN or social security number beforehand. On the other hand you can also use a ITIN or Individual Tax Identification Number as a replacement if you have one. This has the same number of digits as a SSN and can be used to verify your identity.
Use a Prepaid Debit Card Account Rather Than a Bank Account
You actually do not need a bank account per se if you think about it. You need the options that come with opening one in the United States and that can be accomplished with a reloadable or prepaid debit card. You can get these made from a number of services such as Payza and NetSpend which will come complete with an account number along with ABA and routing numbers you can use to manage your business finances.
With an account like this you can also create a Direct Deposit for your paycheck and the card can also be loaded easily through designated locations. In fact, if you want to make your options more diverse, you can open a debit account with a number of services at the same time.
Travel to the United States
Rather than looking up how to open a US bank account for foreign entrepreneurs online and getting nowhere, open one immediately by traveling there. That is probably the best solution especially if you cannot open one online. That way the bank will be able to confirm your identity instantly and you can avoid a lot of back and forth as well.
Just make sure that you have all of your documents on hand. This includes both business and personal documents that the bank may need for their verification processes. It is also a good idea to contact the bank directly before you arrive and book an appointment and to confirm all of the documents you might need to bring. You cannot go back to get them after all and who knows when your next trip will be.
Confirm Your Identity at the US Embassy
Some banks also accept verification of identity if their foreign client goes through the US Embassy to have it verified. If you visit one in your country you could get your ID verification form signed there from the concerned authorities. Needless to say this is only practical for those who have actually have a US Embassy in their hometown. If there isn’t one then it might be more practical to visit the United States to open a bank account but make sure that the bank you choose actually accepts foreign investors as clients first.
Collaborate With Someone
If there is no US embassy where you live and if you cannot visit the US to open an account then consider collaborating with a local preferably someone you know. It is extremely important that the person you consider will have your best interest at heart. We are talking about your business finances after all and it would be unwise to entrust its maintenance or account to someone who has a questionable background.
The person will have access to all of your company accounts and will also be listed as your company representative in the US. In other words, they can access those funds anytime they wish and the bank will let them because you gave them legal clearance to do so. Since you will not be listed as a co-signer in the company, that person will have all exclusive rights to that money and that includes blocking access and running away with it.
If you want to eliminate those chances completely and want to be known as the sole owner of the business then an alternative would be to hire an executive officer or a manager based in the US. These individuals are professionals and can be your representatives at the bank.
A LLC for instance can be listed on your business’s Articles of Organization but unlike a family member or friend they are legally bound by the business they work with to manage your account on your behest and cannot take over. You will have to pay them a salary though but the expense will be worth the peace of mind you will get that your business account is in good and reliable hands. Make sure you get a Certificate of Incumbency beforehand so that the bank can verify that the manager is your representative
Provide Relevant Information
There are a few crucial documents you need to provide the bank whether you visit the country or decide to open an account online. Some of them include:
Proof of Address – As a company representative the bank will expect you to provide proof of address so that they know that you actually are who you say you are. Some of the documents that can prove that include tax bills, utility bills, housing or rent agreements, insurance certificates, local bank account statements and any other documentation that has your current address on it. Make sure that the document is in English before sending it to the US for verification. They will be rejected otherwise. If they are not in English then get them translated and notarized officially from banks in your locality that have multilingual bankers working for them.
Business Address in the US – If your US based business does not have a presence in any state it is possible that no bank will do business with you. How to open a US bank account for foreign entrepreneurs can be a hassle if their business does not exist in name yet. Of course, if you need a bank account to establish it then most banks will be accommodating but you have to get your company registered first. If your business works online then the bank will not be stringent in this regard but some might refuse to give you an account if your business is not physical or if it is based at a distance from them.
Deposit a minimum amount – This should be fairly obvious but before your business account can be opened it needs to have a minimum amount deposited in it. The amount varies from bank to bank but most require at least $100. Check the amount your US based bank is asking for and if it is different for foreigners.
Get a Letter from your CPA – If your business is registered in one state and its bank account is in a bank in another state then you need to get a letter from your CPA or certified public accountant verifying the link. The bank will expect this and it should state that your company does not do business in the state your bank account is in and never will do business in that state. Your business attorney can also take care of this if hiring a CPA is not an option.
Acquire a Certificate of Good Standing – This is also known as a Certificate of Existence or Authorization and as the name implies, it is used by banks to verify that your company actually exists or not and if it is authorized to do business in the state it is registered in. If they determine that your business is in ‘good standing’ then that means they have confirmed that its documents are up to date according to the secretary of state’s office and according to current tax laws in the jurisdiction it is registered in.
This is important for two things. While some banks might ask for it before you can open a business account others might ask for it when you ask for financing for it. Most foreign business owners and business owners in general tend to take both routes so that they can hit two birds with one stone – registering their business and obtaining finances that can help them develop it as quickly as possible. However, you can only order them one at a time rather than together but when you are able to verify both you can open your business successfully and on a positive note.
Acquire a Certificate of Incumbency – How to open a US bank account for foreign entrepreneurs also requires a Certificate of Incumbency which is also known as a Secretary Certificate or a Register of Directors. This is an official and legal document that has the names of all of the directors, partners and business owners in your company along with their designations in it.
It is used to verify their identity since they are the signing authorities in the business besides you and it also proves that they can legally enter into transactions for the business and as its representatives. The certificate can be acquired on demand and even though you can find a number of samples online, it might be best to ask your CPA or business attorney to fill it out and have it sealed with your business seal as well.
Acquire Banking Resolution – A Banking Resolution refers to a business document that is provided by the Board of Directors which gives certain people the authority to open an account on behalf of the company they represent, which in this case is yours. Some banks might ask you to have it translated to a specific language and will provide you a sample of what they are expecting. On the other hand other banks might also accept resolutions from your business if it clearly verifies the identity of the aforementioned individuals. This includes how much authority you have given them when it comes your business accounts in the bank so make sure that you call them to check what they require.
Acquire Articles of Incorporation – In order to open a business account in the United States and your business has to be registered in any one of the 50 states. A representative from your business also has to provide proof of this to the bank you decide to work with and the type of documentation needed will also depend on this choice as well. This includes Articles of Incorporation and Organization but not all banks will accept receipt and some will ask for copies as well.
Obtain an Operating Agreement – An Operating Agreement or OA will allow your bank to verify that the person or representative that is opening the bank account in your business name is genuine and if he/she are authorized to take such action on your behalf. This agreement is actually an agreement between members of the LLC that govern the business along with it financial obligations and managerial duties as discussed before.
This is one of the easiest and best ways to acquire critical information such as corporate bylaws which are concerned with how the business is managed, operated and which procedures will be used to run it in the future. These are often accompanied by minute meetings which result from a meeting of the Board of Directors. Your bank might also ask the representive or LLC manager to provide a copy of all of those documents when they come to open a bank account for your business.
US Banks to Try
So how can you decide which bank in the US will be a suitable option for your business? There are a number of different ones you can choose from such as Wells Fargo, HSBC, Chase, Bank of America, Citi Bank and others which have a number of branches across the globe as well. If you have any of these where you currently live you can ask them what you can do to open a business bank account in their US based branch.
On the other hand you can also try the online route with online banks such as EverBank and Silicon Valley Bank or HSBC Advance if you want more convenience and less hassle. These are also more flexible when it comes to foreign investors so you won’t have to search long for how to open a US bank account for foreign entrepreneurs.
If opening a bank account in the US is not an option or you cannot travel there to open one then the online route might be the best one to take. Depending on the needs of your business, you can choose online financial services such as PayPal. If you face difficulties opening a merchant account or bank account in the United States using it or other such website such as Amazon Payment or Google Wallet to collect payments is a viable option that should be explored. You have nothing to lose and a lot to gain if you think about it.
Some businesses that are registered in the US might not even need an account there to remain functional. For instance if you provide services to business owners there then you might be able to wire the money to US dollar bank account in your own country. For example, if you want to open a merchant account and you are not a resident of the US, then the only thing you can do is to open an account in a bank your own country for which you will have to create an account for.