Opening Accounts in Foreign Banks

Bank Accounts Abroad

During the period of active implementation of BEPS, MLI and compliance plans, i.e. international rules for identifying and combating “erosion of the tax base” and requirements for connecting the location of financial instruments to the local business environment, the days of “export intermediaries” from Hong Kong with a Riga bank account and deliveries from Odesa to Egypt are gone. Foreign banks simply ignore such stories now.

K.A.C. Group offers the following options for opening bank accounts:

Bank Accounts in the Countries where Business Interests of the Company Can Be Correlated with Their Territory

For instance, such companies are located on the export transportation route of Ukrainian goods to final suppliers, namely: Northern Europe – Estonia, Central Europe – Poland, Central and Southern Europe – Hungary, Africa and Asia – Turkey. If the optimal requirements for compliance and the necessary document flow confirming the transportation of goods through these countries are met, local banks open accounts for such companies, even if they are from another jurisdiction.

Banks in the Countries without Strict Compliance Requirements

Such banks have their own special requirements for clients. As an example, in Switzerland and Malta, it is mandatory for the client to place the agreed amount as a deposit, or to participate in investment portfolios offered by the bank. In England, a prerequisite is that the account manager must be an English resident (we provide such a service).

New offer: K.A.C. Group opens bank accounts for international business companies without mandatory requirements for compliance (!) in the banks of Belarus, with only due diligence being obligatory. This option is already used by former clients of the “failed” Baltic banks, as well as clients from banks where they were asked to close their accounts due to non-compliance.

Payment Banking Systems

These are financial institutions with a limited banking license (without the ability to place deposits and issue loans), but the procedure for checking a client for due diligence is similar to a bank one. By the way, the cost of payments is often lower than that of banks. We offer payment systems in the Baltic states, Poland, and the Czech Republic.

Foreign Bank Accounts for Ukrainian Companies

K.A.C. Group offers opening accounts for Ukrainian companies in foreign banks. The Law of Ukraine “On Currency and Currency Transactions” of February 2019 gives the right to residents of Ukraine and legal entities “to open accounts in foreign financial institutions and carry out currency transactions through such accounts.” As for reporting information on the availability of an account with a foreign bank in the State Fiscal Service (SFS) and on the movement of funds on such an account, the old MFI Order No. 207 of December 25, 1995 (subject to amendments of May 24, 2017) and Resolution of the Cabinet of Ministers No. 419 of February 28, 2000, governing these issues, are applied. The advantages of having a foreign bank account for a Ukrainian exporter are as follows:

  • due diligence of Ukrainian companies in foreign banks, in fact, is more favorable than in Ukrainian banks;
  • accounts are opened in international network banks, which are guaranteedly reliable for Ukrainian clients and convenient for their foreign partners;
  • unlike the Baltic banks, USD accounts are available on such accounts;
  • these banks are more preferable for Ukrainian agricultural exporters in terms of the use of letters of credit, bank guarantees, etc.;
  • banks are considering lending against third-party obligations to purchase products. If these are well-known market players (buyers), the interest on the loan can be quite acceptable;
  • presence of such accounts will contribute to the formation of financial history and positive compliance for both the Ukrainian enterprise and its beneficiaries;

such account protects against raiding, motivated actions of the SFS, “custom-made” court decisions and actions of the enforcement service.

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