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US bank account for LLC or Corp owned by non-resident

Recently, the banking industry in the U.S. has undergone major chances that greatly complicate the process of opening bank accounts for non-residents as well as companies owned by non-residents. One way to reduce the risk of being denied a bank account is to have a resident of the United States as the director or the officer of the company.

Legally, there are no restrictions in the United States on the opening of bank accounts by non-residents as well as companies (LLC or C-Corp) owned by non-residents. However, the opening requirements are set by each bank independently. Theoretically, any person could walk into a bank with two forms of ID in English (passport and government identification), the statutes of the company (charter, operating agreement, certificate of registration, and the letter of assignment of the tax number “EIN”), a document confirming the address in the U.S., a small amount of cash to deposit, and a completed application to open an account. Non-residents must file tax form W-8BEN. However, the exact process is determined by the Department of Homeland Security, the Department of Treasury, the Federal Bureau of Investigation (FBI), and each bank’s internal safety measures. Each bank has a risk analysis department, which sets internal criteria on which a decision is made whether or not to open the account.

The decision on opening the account is based on an analysis of the business profile as well as the credit history of the individual(s): 1) authorized to open an account on behalf of the company and 2) have the right to sign on behalf of the company. Banks check the credit histories and criminal records of the individuals. Since non-U.S. residents often do not have a credit history in the U.S., it can be difficult to pass such a check.

The situation for non-residents has been recently complicated by changes in BSA (Bank Secrecy Act) and AML (Anti-Money Laundering) rules, as well as other regulations. In the risk analysis associated with the decision to open the bank account, the bank must ensure that the new client will be able to comply with the rules of BSA and AML and will not require constant supervision by the bank.

When consider applications for opening a bank account, the bank collects the aforementioned information, and then critically analyzes it to search for the presence of “risk factors”. Based on this analysis, the bank can not only refuse to open an account, but can also share their concerns about the risks of the applicant with other banks through the filing of a SAR (Suspicious Activity Report). If this happens, the company will have difficulty opening an account at any other bank in the U.S., as well as transferring money through corresponding accounts in the U.S. The applicant may not even be informed that the bank has reported their case in a SAR.

Examples of high-risk criteria looked for by the bank’s security department at this stage:

  • Any mention of offshore companies owned, international business operations through companies or banks registered in off-shore zones;
  • Import-export operations;
  • Scheduled transactions with companies in developing countries, and
  • A complex system of ownership.

Another important factor is the business classification code as specified by the North American Industry Classification System (NAICS). Specific codes will automatically require more testing and follow-up monitoring.

 

Risk Factors (BSA / AML)

 

Bank Secrecy Act/Anti-Money Laundering High Risk Indicators

 

Nontraditional financial entities, such as:
61553; Currency exchange houses, also known as “giros” or “casas de cambio”.
61553; Money transmitters.
61553; Check cashing facilities.
61607; Casinos and card clubs.
61607; Offshore corporations and banks located in tax and/or secrecy havens.
61607; Leather goods stores.
61607; Car, boat, and plane dealerships.
61607; Used automobile or truck dealers and machine parts manufacturers.
61607; Travel agencies.
61607; Brokers/dealers.
61607; Jewel, gem, and precious metal dealers.
61607; Import/export companies.
61607; Auctioneers.
61607; Deposit brokers.
61607; Pawn brokers.
61607; Professional service providers (lawyers, accountants, investment brokers).
61607; Cash-intensive businesses, such as convenience stores, restaurants, retail stores, and parking garages.
61607; Ship, bus, and plane operators.
61607; Telemarketers.

Banking functions and transactions
61607; Private banking.
61607; Trust departments.
61607; Offshore international activity.
61607; Deposit-taking facilities.
61607; International correspondent banking activity.
61607; Internet banking.
61607; Wire transfers/cash management functions.
61607; Transactions in which the primary beneficiary or counterparty is undisclosed.
61607; Loan guarantee schemes.
61607; Transactions involving large amounts of traveler’s checks, official bank checks, money orders, and stored value cards.
61607; Pouch activity.
61607; Electronic transactions that permit the rapid movement of currency (e.g., foreign exchange transactions followed by payment into another jurisdiction).
Trade financing transactions with unusual pricing features.

High-Risk Countries
Countries in which the production or transportation of illegal drugs may be taking place.
Bank secrecy havens.
Emerging countries that may be seeking hard currency investments.
61607; Countries identified in FinCEN advisories.
61607; Major money laundering countries and jurisdictions.

 


 

 

 

 

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