There are so many IT companies in the world, and they may still face challenges if they decide to open a foreign bank account. However, they need one to receive payments from customers from across the globe and mitigate the risks of keeping all their assets in a home bank. What is the root of evil? Well, the IT industry is considered a high-risk undertaking by banks and credit institutions, in the same way as forex or gambling spheres. This may sound surprising, but we will explain the reason for that later on. Anyway, if we eliminate emotions from the process, this fact should simply be taken into account to elaborate a strategy that will work.
Bank Accounts for the IT Sphere: Reasons for Refusal
People who have an IT undertaking usually don’t expect any failures in opening a corporate account as they are working in one of the most popular niches. It looks like the banks should be interested in such customers, so they may be greatly surprised when their application is turned down.
There are some standard reasons why an application may be rejected, like the provision of false information, typos, mistakes in documents, and so on. However, there are other reasons related to the IT industry as a potentially high-risk industry, which may be connected with the following:
- The bank needs to check the origin of its customers’ funds. You may need to submit a contract with corporate documentation for that purpose which contains the addresses and names of assets and partners. It often happens that an IT company cannot provide signed contracts with its customers in all cases.
- Banks subject their clients to stringent verification procedures and want them to confirm the area of their activity and their source of income. That’s where many IT companies encounter problems.
- An IT company may have a website that contains transparent information about their company, but they have to prove that the facts written there are true to life. At the stage of account opening, you cannot identify the subject of the transaction or track the purpose for which the software is used in all cases. As a result, the bank cannot have 100% assurance that the company is not related to fraudulent activities.
- It is true that IT companies are not high-risk undertakings by their nature and structure. However, they may have direct connections with fraudulent businesses, like being engaged in software development for a brokerage company or a porn site. Providing hosting services to high-risk companies, fraudsters, or fly-by-night websites may be yet another part of the problem.
Not all banks are so reluctant to deal with IT companies, however: there are many institutions that simply set special requirements to be met by high-risk businesses. Such companies may need to have a real presence in the country where the bank is located, have higher service fees, pass more stringent transaction verification, etc.
Where to Set Up an Account for an IT Company?
The good news is that you can open an account in any country if you know the ropes! If you have any doubts, you can use professional help.
Here are the options you can use:
- You can take a good look at global payment systems and offshore banks that willingly work with high-risk niches, including IT.
- If your IT company operates in many countries, banks in Asia and on other continents may be exactly what you need. For instance, Mauritius offers beneficial conditions for account opening in various business areas. Explore Africa: not all countries are suitable, of course, but there are very good options. You can read the details by following the above link. Finally, Singapore is an excellent destination for banking: opening an account may be a little challenging, but your reputation will be sky-high.
- Use banks and payment systems in some CIS countries. For instance, you can explore the opportunities in Kazakhstan: while the rates and fees may be higher than for regular companies, the country’s institutions willingly cooperate with foreign IT companies.
- Want to open an account in Europe? The local banks and payment systems are available to you as well. Not all of them are ready to work with high-risk businesses, but you can still find good options. They may need confirmation of your transactions and onboard you only after a stringent due diligence procedure on the business and its partners. In the majority of cases, they will set up an account for a company based in the EU or an EU-friendly European jurisdiction. In addition, you can use financial institutions in the UK: they offer banking to high-risk business areas and impose no requirements related to the company’s presence in the country.
The choice of banks is limited, even though the geography may seem quite broad. The best way out is to rely on the recommendations of specialists experienced in the financial sphere. If you feel that this option will be better, you can follow the above link for a free session with a professional.
Opening a Merchant Account for IT Business
Most financial institutions will open a merchant account for you along with a corporate one. Thus, you will be able to accept payments from customer cards with the information entered via a POS terminal or on the company website to pay for the services. Your clients will use a procedure similar to the one used in any online store.
Keep in mind that you can set up both types of accounts in one financial institution only if the relevant payment system is connected to a bank and has the right to open individual IBANs inside the system. In any case, you will have to open two accounts, not one, and sometimes it will require using the services of two different financial institutions.
No one can give you a 100% guarantee that the bank will open an account for you (except for scammers). However, working with a specialist will considerably increase your chances. Please follow the above link to get more information or talk to an expert using live chat or other channels of communication.
