For international clients, opening a bank account in the UK during or just after company formation is often an unexpected challenge.

The UK enjoys a reputation as a business-friendly destination and London is a major centre for international finance. So it’s surprising that setting up a UK Bank Account so often delays an overseas business seeking to become established in the UK. Furthermore, the reason isn’t always obvious.

The reality is that many overseas firms are unattractive to UK banks because the cost of running anti-money laundering checks (AML) makes it financially non-viable for all but the biggest accounts.

The good news is the market is innovating and there are more options available than ever before. We asked our company secretarial and accounting colleagues to share some of their experiences of helping overseas clients in the UK with bank accounts as part of our complete company formation solution.

Many overseas firms will miss out on receiving the UK corporate banking treatment. Either because they fall below the revenue threshold or because they are not taking additional services like loans. For these firms it can often be a shock to discover just how difficult it is to secure basic banking facilities.

Nick Lindsay
Director of Governance and Corporate Services

Options for setting up a
UK Bank Account

High Street Bank

High Street Bank

Approaching one of the main UK High Street Banks eg HSBC, Barclays etc

Pros

Good functionality at low levels of cost.

Established reputation.

Fully regulated and holding regulated capital.

Cons

The majority of applications will be rejected if there are no UK directors or shareholders.

We have seen greater levels of success where clients are able to leverage an existing personal or historical business banking connection.

Ease

*

Globe

International Banks

Approaching an International Bank with a UK presence, where there is a pre-existing relationship.

Pros

Clients may enjoy a more seamless service across borders as well as good value.

Often fully regulated in the UK.

Cons

UK banks are increasingly reluctant to liaise with their overseas arms for KYC purposes and need to complete their KYC independently.

Ease

**

Non-Traditional Financial Services

Non-Traditional Financial Services

Challenger banks and alternative providers are looking to fill the gap.

Pros

Excellent user experience focused on technology.

Easier to complete applications and AML checks.

Cons

Generally not regulated as a bank, although still financially regulated in the UK.

Higher account fees may apply.

May work well initially but often not a long-term solution.

Not all offer actual bank account numbers and sort codes

Ease

***

Map of Europe

Non-UK Bank Account

Certain European banks will open accounts for UK companies denominated in sterling, euro or dollar.

Pros

This is a perfectly legal approach.

Some have London Branches.

Cons

A non-UK sort code and account number, will mean you will not be able to receive refunds e.g. HMRC. It is also less attractive for customers.

Ease

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Group Structure

Group Company Bank Account

If the company is part of a group of companies, the company could utilise the bank account of another group company.

Pros

There is no legal obligation for a company to have a bank account.

Cons

Unable to receive refunds e.g. HMRC.

Causes mingling of company funds.

Ease

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How Elemental can help

Elemental has strong relationships with a number of UK banks and other financial institutions that can provide UK current accounts for our customers. We regularly work with our overseas clients setting up a UK company to ensure they have the banking facilities they need to operate their business.

The increased focus by UK banks to reduce risk and associated costs have made it harder for overseas companies to open bank accounts. However, over the years we have been able to advise our existing clients on putting in place the right type of ownership structure that can increase the chances of success.

Request a proposal

Find out more about how we help overseas clients incorporate in the UK with a bank account as part of our integrated approach.

    We’re here to keep things simple

    If you would like to find out more about our services and how we can help support your business, please get in touch.

    +44 (0)203 286 6229