How to open a business bank account in the UK

TransferWise
04.09.19
8 minute read

Britain’s international trade is a big business. According to the UK’s Office for National Statistics, Britain’s exports are worth over £160 billion pounds a year - and that staggering statistic doesn’t even include some large categories such as banking and travel. In fact, financial services is the largest segment overall when it comes to services exported overseas by UK companies.

If you do business with the UK, including dealing with British suppliers, customers or exporters, you may be considering getting yourself a business bank account there to make it easier to manage your money. This guide will cover what you need to know about opening a business account for your organisation - including:

  • Business structures in the UK
  • Opening a business account as a foreigner
  • Documents needed to open a business bank account
  • Which banks to consider if you want a traditional bank account

We’ll also look at an alternative to opening a UK bank account for your business - TransferWise.

TransferWise isn’t a bank, but with a TransferWise borderless account for business you get many of the benefits of a regular bank account, and a few more too. It can also be quicker and more convenient for overseas business owners to choose a borderless account compared to looking for a business account on the UK high street. More on that later.

You might find that to open a business bank account in the UK, you’ll need to run a business which follows one of the more common legal structures there. Most businesses in Britain are one of the following types:

  • Sole trader
  • Partnership
  • Limited liability partnership
  • Incorporation as a limited company

Can I open a corporate bank account in the UK with a foreign corporate entity?

There’s no legal barrier to opening a business bank account in the UK with a foreign registered company. However, in practice it can be tricky to do so. That’s because British banks must perform a number of due diligence on customers, to limit the scope for fraud and money laundering. Because it’s hard to check out the legitimacy of businesses, and even harder when the owners might not be UK residents, many banks simply don’t offer accounts to foreign registered companies.

If you already have a business bank account with a global bank, it’s worth talking to them about whether or not they have British branches, or even work with any UK based banks as partner institutions. If they do, your local bank may be able to help you get set up with a business bank account in the UK more easily than if you try to do it yourself.

An alternative: the borderless account for business from TransferWise

There are a number of barriers when it comes to opening a business bank account in the UK as a foreigner. Some banks don’t offer corporate account products to companies not registered in the UK, and even if they do you may need to attend a branch in person, and provide evidence of a British residential address. If this isn’t possible, it’s good to know that there are alternatives out there.

One option you might consider is opening a TransferWise borderless account for business. You can open this smart new account online, and you don’t need a British residential address to get your own UK bank details. In fact, you could get local account details for Australia, the US, New Zealand and the euro area, too, to get fee free payments in all these major regions. You’ll be able to hold over 40 currencies in your borderless account, and send and receive payments using the Google exchange rate with no markup. You just pay an upfront fee per transaction, which can work out much cheaper than traditional banks.

What's the process to open a corporate account? How long does it usually take?

The process for opening a business account will vary between banks. It’s usually necessary to visit a branch in person - or at least have a number of your directors do so - to sign the required paperwork to get the account up and running. This can mean it takes a fairly long time to get your business account working.

The documents you may need will depend on your chosen bank’s policy, as well as they type of account you want and the business you run. To give an example, the documents and details required to open a startup account with HSBC - one of the largest banks in the UK - are as follows¹:

  • Full contact details for you and your business
  • Companies House registration number if relevant
  • Estimated business turnover
  • Details of your own finances including credit and debit cards
  • Proof of your identity such as a National ID card or passport
  • Proof of your address such as a utilities or tax bill in your name

Depending on your company structure, you may need to provide details and proof of ID for more than one person. Some banks require this information for all owners or beneficiaries, or for a proportion of your directors.

If you have a UK registered business, UK Finance have a handy guide to opening a business bank account. You’ll enter a few details into the website, confirming the type of business you run and then get a helpful checklist of the documents you’re likely to need to help you prepare for opening your account.

Can I open a business bank account as a non-resident?

Unfortunately the answer to this is: it depends. Many banks are unwilling to consider applications for business accounts from non-resident business owners. To offer a business or personal account in the UK, banks must take certain steps to check the identity of their customers. In many cases, they choose to do this by checking ID documents, as well as asking for a UK residential address. This simply makes it more straightforward for them to fulfil their duty to know who their customers are, and prevent fraud.

That said, some global banks can consider applications from non-resident customers who already bank with them at home. Barclays for example, may open a UK account for customers who already bank with them overseas, so it’s worth asking your regular bank if they have a way to help you do the same.²

Can I open a business bank account from abroad?

This will depend in part on your residence status. If you’re a UK tax resident, and have a residential address there, you might well be able to open an account online based on your UK residency. However, if you’re non-resident it may be more complicated.

There are many agencies available online which can work with overseas entities and customers to open UK based bank accounts. This process may take some time, and there will be a fee to pay for the service. Make sure you know exactly what you’re getting for your money before you agree.

Can I open a business bank account online?

Some banks do allow customers to open a business account online, while others may let you complete the paperwork online but still need you to call into a branch with your ID before you can open your account fully. Check the requirements for your chosen bank and account type, as the policy may vary depending on your personal situation.

If you need to open an account online, you may be better off considering an alternative to the high street banks, such as the TransferWise borderless account, or a business account from a challenger bank like Starling. Starling Bank offers business accounts to sole traders and some owners of limited companies, but there are some limitations to who can apply.³

TransferWise will verify your details based on an upload of your documents and a photo, while Starling may ask you to send a short video to prove your ID. It’s worth knowing though, that Starling will carry out UK credit reference checks to make sure you’re eligible for an account. If you don’t have a residential address in the UK, and therefore only have a limited credit history there, this may mean you’re unable to get your account approved.

Which bank should I choose?

In the UK there are 4 dominant traditional banks, known as the ‘big four’. These banks have large numbers of branches, and a wide range of products for personal and business customers. However, it’s worth casting your net wider if you’re looking for the perfect account for you, as the best account may be from an alternative or challenger bank.

The UK’s ‘big four’ banks are:

  • Barclays
  • HSBC
  • Royal Bank of Scotland
  • Lloyds Bank

Barclays:⁴

  • 1,600 branches in the UK, with some 4,750 globally
  • Start-up business bank accounts from £6 a month
  • Some new companies can access 12 months free banking with a Barclays account
  • Mobile and internet banking and specialist support for businesses

HSBC:⁵

  • Said to be the 4th largest bank globally, and the most profitable bank in the entire world
  • Business bank accounts for a wide range of different business types and stages
  • Help to switch if you already have an account with a different bank
  • Best tariff promise means HSBC will make sure your account is reviewed annually and inform you if you could save with a different account type

Royal Bank of Scotland (known as RBS):⁶

  • RBS Group serve some 18.9 million customers globally
  • 2 years free banking for start-ups, and a range of accounts for different business types and charities
  • Open to customers over 18 who have the right to be self employed in the UK
  • Perks include mobile banking, a relationship manager and ‘accelerators’ to help grow your business

Lloyds Bank:⁷

  • 16 million personal and business customers
  • Business accounts are available based on the annual turnover of your company
  • Lloyds states it approves 9 out of 10 applications for overdrafts
  • Use the Lloyds resource centre to get support for growing your business

Banking fees

When you’re choosing the right business account for your needs it’s important to look at the fees you’ll need to pay to operate it day to day. Some accounts have monthly fees, which may be waived as an opening offer for new customers. However, you’ll likely also have to pay some transaction fees for things like sending and receiving payments, depositing cash or using your company credit or debit card. The fees you pay can vary widely by bank and account type so you’ll need to read the small print carefully.

When you’re checking the fees, don’t forget to look at the price you’ll pay to send and receive international payments. This is one area where traditional banks may fail their customers, charging high fees and adding a markup to the exchange rate they use. It’s worth looking at the exchange rate offered, and comparing it to the mid-market rate for the currency pairing, which you’ll find on Google. Check out the cost of the same transaction with a specialist provider such as TransferWise before you go ahead, and you may save yourself money.

Getting the right support for your business - including a bank account which works for you - is essential. Invest some time finding the right account for you, looking at the biggest banks in the UK alongside some of the modern alternatives like the TransferWise borderless account for business to make sure you get what you need at a great price.

Sources:

  1. https://www.business.hsbc.uk/en-gb/everyday-banking/business-accounts/start-up-business-bank-account

  2. https://www.barclays.co.uk/help/business/accounts/overseas-open-uk/#back=%2Fcontent%2Fbarclaysuk%2Fen%2Fhelp%2Fresults.html%3Fq%3Dbusiness%2Baccount%2Beligibility%26_charset_%3DUTF-8%26offset%3D0%26origin%3Dhelp.barclays.co.uk

  3. https://www.starlingbank.com/business-account/

  4. https://www.barclays.co.uk/business-banking/accounts/start-up-business-account/

  5. https://www.business.hsbc.uk/en-gb/everyday-banking/business-accounts?DCSext.nav=foot-mat

  6. https://www.business.rbs.co.uk/business.html

  7. https://www.lloydsbank.com/business/home.asp

Sources accurate as of 22 July 2109


This publication is provided for general information purposes only and is not intended to cover every aspect of the topics with which it deals. It is not intended to amount to advice on which you should rely. You must obtain professional or specialist advice before taking, or refraining from, any action on the basis of the content in this publication. The information in this publication does not constitute legal, tax or other professional advice from TransferWise Limited or its affiliates. Prior results do not guarantee a similar outcome. We make no representations, warranties or guarantees, whether express or implied, that the content in the publication is accurate, complete or up to date.

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