7 Problems An Overseas Company Can Face When Setting Up A UK Bank Account

When an overseas company decides to expand their business into the United Kingdom, one of the first steps is to set up a UK bank account. However, this can be a challenging and time-consuming process.  

Here are seven problems an overseas company can face when setting up a UK bank account: 

Lack of UK Credit History 

One of the biggest problems for overseas companies trying to open a UK bank account is the lack of a UK credit history. UK banks use credit scores to assess the risk of lending money to customers. Without a UK credit history, an overseas company may struggle to convince a bank that they are a low-risk customer. This can make it difficult to open a bank account or access other financial services, such as loans or credit cards. 

Company Formation Requirements 

In order to open a UK bank account, an overseas company will need to have a registered office and a UK business address. Additionally, the company may need to provide documents such as a certificate of incorporation and a business plan. This can be a time-consuming process, especially if the company is not familiar with UK company formation requirements. A UK based resident director may also be required, in some circumstances, depending on ownership structure together with expected turnover of the UK Company.  

Identity Verification 

Banks in the UK are required to verify the identity of their customers as part of their anti-money laundering (AML) and counter-terrorism financing (CTF) obligations. This can be a challenge for overseas companies, especially if they do not have a physical presence in the UK. The bank may require the company’s directors and shareholders to provide proof of identity and address, such as a passport or utility bill. 

Language Barriers 

Language barriers can also be a problem for overseas companies trying to open a UK bank account. Many UK banks require all correspondence to be in English, which may be a challenge for companies whose first language is not English. This can lead to misunderstandings and delays in the account opening process. 

Different Banking Systems 

The UK banking system may be very different from what overseas companies are used to. For example, many UK banks do not offer the same types of services that are available in other countries. Additionally, the bank may have different policies and procedures for opening an account or accessing financial services. This can make it difficult for overseas companies to navigate the UK banking system. 

Brexit Implications 

Brexit has also had an impact on UK banking regulations. As the UK is no longer part of the European Union (EU), overseas companies may need to comply with additional regulations and requirements when setting up a UK bank account. This can add to the complexity of the process and make it more difficult for overseas companies to open a UK bank account. 

Financial Regulations 

Finally, overseas companies may face financial regulations when trying to open a UK bank account. UK banks are required to comply with a number of regulations, such as the Financial Services and Markets Act (FSMA) and the Payment Services Regulations (PSR). Overseas companies may need to provide additional documentation and information to comply with these regulations, which can be a time-consuming process. 

Setting up a UK bank account as an overseas company can be a challenging process. From a lack of UK credit history to language barriers, there are many obstacles that can make it difficult to open a bank account in the UK. However, with the right preparation and understanding of the UK banking system, it is possible to successfully set up a UK bank account and access financial services in the UK. 

Whatever your growth vision, setting up in the UK can be made a lot easier by sourcing the right advice. We’re right here for all your needs, and you can contact us for help and support in a number of areas, from tax and payroll to accounting and banking.