Corporate bank account opening Europe

Corporate bank accountCurrently, opening a corporate bank account in a European bank demands a lot of effort due to the increased requirements for the beneficiaries and activities of the companies as well as complex application processing.

Our team here at IB-IA GROUP UAB has eight years of experience in helping clients to open corporate bank accounts across Europe. We use our wide network of trusted partners in the European banking industry to offer the most suitable and efficient options that improve the functioning of the companies we serve.

The benefits of a corporate bank account include the following:

  • Professional image
  • An opportunity to build a credit history
  • More organised accounting records
  • Online tools for invoicing and other accounting processes
  • Annual tax reporting (it’s imperative to ensure business transactions are separated from any personal transactions)
  • Business account allowances and benefits (a bank can offer reduced fees, free business advice or competitive interest rates to new business account owners)
  • A European bank account enables easier management of funds and transactions within the Single Euro Payments Area (SEPA)

You may consider opening a corporate bank account if:

  • The amount of the company’s transactions is high
  • The company’s income and expenditure have increased significantly and you need to simplify tax self-assessment
  • You’re preparing to incorporate a limited liability company
  • Your company needs a business credit card
  • If your company intends to accept card payments from clients
  • There’s an intention to apply for a business loan

Things to consider before choosing a bank:

  • Whether it’s friendly to your business area (e.g. crypto) and operational framework (e.g. connectivity with PayPal)
  • Business bank account fees (admin, various types of transactions, etc.) that might seem non-obvious from the first glance
  • The level of customer support (communication channels and whether it can be tailored for you)
  • Interest fees
  • Transfer limits
  • Insurance of the deposited money
  • Offshore banking

An Overview of the European Banking Industry

 

The European banks are thoroughly regulated and therefore trusted by many international businesses, which can add an extra level of security to your company’s operations. The European Banking Authority is the EU’s regulatory agency whose role is to enforce transparency and integrity across the financial industry and who can override national regulations in order to achieve its goals. Another impactful institution is the European Investment Bank whose purpose is to fund strategic EU projects.

The total of the balance sheet is one of the key indicators of a bank’s success. While you can choose from a huge number of European banks, keep in mind, that the following banks are the largest (and the most successful) with regard to total assets:

  • BNP Paribas (France)
  • HSBC Holdings (UK)
  • Credit Agricole Group (France)
  • Deutsche Bank (Germany)
  • Banco Santander (Spain)
  • Barclays PLC (UK)
  • Societe Generale (France)
  • Groupe BPCE (France)
  • Lloyds Banking Group (UK)
  • ING Group (Netherlands)

Corporate Banking Services in Europe

Many European banks aim to cater to the varying needs of businesses and thus offer services that boost business efficiency and keep up with technology-led solutions. That said, it’s crucial to evaluate how much your company is willing to spend on banking services prior to making the decision.

Traditional European banks provide the following services:

  • Digital onboarding
  • Online (internet and mobile) banking, including forex, shares trading, and wire transfer abroad, that will enable you to access business accounts from anywhere in the world
  • Credit and debit cards
  • 24/7 customer service
  • Personalised customer service, including a personal banker
  • Harmonised service and pricing models across the countries where their branches are available
  • International debit cards
  • Connectivity of bank accounts with virtual wallets and such online payments systems as PayPal
  • Business advice
  • Harmonised reporting formats

In addition to traditional banks, companies can also explore options within the digital banking industry, which boasts plenty of advantages. The most popular digital banks in Europe, inter alia, are Wise, Monzo, Revolut, Bunq and N26.

Benefits of digital banks:

  • The speedy digital onboarding process
  • Streamlined transaction processes, which normally leads to reduced administration fees
  • Borderless multicurrency accounts
  • Facilitation of transfers and collection of payments, including bills, taxes, and transfers to suppliers
  • Exchange from euro into other currencies and vice versa
  • Instant access to and management of funds
  • Instant inspection of the current balance, available balance, monthly statements and other records of information
  • Protection from the fluctuation of exchange rates
  • Lower administration fees

European banks offer the following types of business accounts:

  • Business current account – an active account created for everyday payments, withdrawals, and transfer of funds
  • Business savings account – its purpose is to store extra funds and earn interest
  • Business certificates of deposits (CD) account – a savings account with fixed and usually higher than regular interest rates
  • Business money market account (MMA) – a savings account that has characteristics of a current account (e.g. a certain number of monthly transactions)
  • Merchant account – created to accept debit and credit payments from customers, which are then processed and transferred to other business accounts
  • Foreign currency account – an account denominated in a currency other than local currency which allows you to avoid exchange rate fees

Requirements for Businesses

Generally, requirements vary depending on the type of legal business structure, the country where you wish to open a corporate bank account, as well as your company’s residence status. Banks from various countries usually offer different services to sole traders, limited liability companies, partnerships and other types of businesses.

For a limited liability company, the following requirements may apply:

  • Transfer of a specified amount of capital to a new business account, which enables the registration of the business in that particular country (the required amount varies in each bank)
  • Registration of the company with local authorities (usually a national commercial register)
    • The transferred capital can only be accessed once the company is fully registered with the local authorities
  • The head office should be located at the same place where the registered office is located

While different countries require different sets of documents for resident and non-resident companies, the following documents are generally required to open a bank account in Europe:

  • Articles of Association, Memorandum of Association or other company documents (e.g. partnership agreement)
  • A certificate of company’s registration
  • The company’s business plan
  • Identity documents of the company’s shareholders and directors
  • Proof of company’s registered address
  • Samples of signatures by individuals to use the business account

In terms of requirements by country, Switzerland and Scandinavian banks tend to have the strictest requirements as they are the most regulated in the global context. You’ll normally need to attend a face-to-face meeting in the country where your selected bank is located and also have your background checked in order to open a corporate bank account. If you wish to avoid the pain of having to prepare a mountain of paperwork, we highly advise exploring the possibilities available in Estonia, where the e-residency programme opens doors to foreign non-residents as long as they own an Estonian company.

How to Open a Corporate Bank Account in Europe

In the digitalised world, you can normally open a corporate bank account remotely from any corner of the world. Depending on the selected country, bank, and the number of applications they receive, the process can take from several weeks to several months.

To open a corporate bank account in a traditional European bank, you should take the following steps:

  • Determine your business needs and the types of accounts your company requires
  • Choose a European country and a bank where you wish to open a corporate account
  • Reach out to the selected bank to clearly define specific requirements
  • Collect required documents
  • Submit an application to the selected bank

To open a corporate bank account in a digital bank, you should take the following steps:

  • Determine your business needs and the types of accounts your company requires
  • Research and select a digital bank
  • Use a corporate email address to create a business account with a selected digital bank
  • Fill in an online application form – provide your company’s details (company name, legal structure, registration number, registered and trading address, information about directors and ultimate beneficial owners, etc.)
  • Submit the application to the selected digital bank

If you intend to open a corporate bank account in one of the European countries, highly experienced consultants of IB-IA GROUP UAB will be delighted to assist you. Over the last eight years, we’ve developed a wide network of trusted relationships across the European banking industry, which will streamline your application processing at a selected bank. Book a personalised consultation now to receive advice that will accelerate your business success.