Choosing a Bank for an Internet or IT Business.
Whilst the need to open an offshore bank account is evident, the question of choosing a specific bank in a specific jurisdiction is not as straightforward. For instance, due to the nature of online business, namely that all payments are typically electronic, the approach to choosing a bank can differ significantly from choosing a bank for traditional businesses. Usual criteria such as service charges, online banking convenience, and the availability of Russian-language support become secondary in this case. The most crucial factor becomes the ability to open a “Merchant Account”, necessary for accepting payments from credit and debit cards. You can find more details about Merchant Accounts or payment acquiring in the respective sections of our website.
Regardless of the specific requirements of the business model for opening a merchant account, it is necessary to consider the following when choosing a bank:
- It is desirable that the bank is located in the same country as the operating company; this eliminates the need to make international payments each time to pay for the current expenses of maintaining the company
- It is necessary to carefully study the tariffs for transactions; in some cases they can reach 50 euros for any (!) operation to withdraw funds
- To avoid difficulties with the withdrawal of funds, it is necessary that the bank issues VISA credit cards for citizens of the “Visa Eastern Europe” zone countries
- Reputable European banks, as a rule, require the disclosure of the names of the true owners of the business (beneficiaries)
- Reputable European banks can report to tax authorities, including Russian ones, information about the income of foreign individuals who have opened accounts with them
- Banks of classic offshore jurisdictions, as well as small banks operating on the verge of legality in the Baltic States and Oceania, can “turn a blind eye” to many things and offer very favourable conditions. The price for this is often the right of the bank, in case of any suspicion, to freeze accounts for an indefinite period
- In some particularly attractive jurisdictions, there may be a legislative tax on the withdrawal of funds on any grounds for payment from the territory of these jurisdictions. Moreover, bank representatives, as a rule, do not report this
- It is also important to know the type of bank license in payment systems such as VISA or MASTERCARD. If the license is valid only in the region of the bank, it may turn out that credit or debit cards issued by the bank work, for example, only in Latin America. An attempt to withdraw money from them, for example in Moscow or Kyiv, will fail
Offshore banking is very diverse. Unfortunately, banks, like any normal organisation, diligently conceal their negative aspects. As a result, making the right choice can be very difficult.
Before opening an account with a foreign bank, we recommend that you consult with our specialists
