Looking to expand your business into the UK? As with any move into a new market in another country there are many considerations, not the least of which is determining how to best receive money from and send payments to those individuals and organizations with which you do business.
The most traditional approach is to establish a business banking account in the UK. In doing so, you can pay your UK suppliers via cheque or by wire transfer. Likewise, your UK customers and clients can pay you by cheque, by direct deposit or by wire transfer into your UK bank account.
The tariffs with a UK bank account may include international wire transfer fees, chequeing fees, exchange rate fees. As with any bank, tariffs may vary based upon your meeting minimal balances within your account.
However, there are a number of steps to be completed before ever stepping into a bank. We outline these requirements below. In addition, we address alternative options and approaches to the tradition approaches establishing a business bank account.
What is needed to open a business account in the UK?
As with just about every country in the world, the UK has strict controls on how — and if — UK banks can establish accounts for non-residents and for businesses located outside the country. Regulations may vary depending upon a number of factors, including, but not limited to:
- The type of business you wish to establish
- The type of goods or services related to your business
- Anti-money laundering/countering the financing of terrorism (AML/CFT) laws
Some of these regulations may vary not only by each specific country within the UK, but also by regions within each respective country.
Furthermore, most commercial banks will have internal policies that govern how they handle accounts from overseas customers — both to comply with law, and to protect the bank against potential fraud or other possible losses. These policies may also be different in each bank so be prepared to do your research. The best approach is to directly contact the bank in the specific country of the UK and the region of that country in which you will be opening the account and ask about their policies and procedures.
The general requirements for establishing your UK business bank account are outlined below.
- Establish a physical UK business address
Whether or not your business requires a physical presence in the UK, you must provide a UK based address to establish a business bank account. (An address is also required when registering your business, but more on this later). Some businesses use the offices of a Solicitor, a Registered Agent (perhaps a Chartered Accountant), or other specified representative of the company. You will need to set up these arrangements before opening the account. (Perhaps when evaluating your bank options you need to inquire if the bank has specific requirements as to what type of address is acceptable).
- Register your business in the United Kingdom
Registration of your company must be completed prior to opening your bank account. Before registering you need to consider the implications of the type of business you are establishing: an LLC, a business partnership, or sole trader (running your own business as an individual or self-employed). (Note that this decision will affect downstream implications related to taxes and potentially your bank tariffs.)
Note that within the UK, when registering with the Companies House, a physical address for the company must be in the same country that your company is registered in (for example a company registered in Scotland must have a registered office address in Scotland).
Registering your company is done with the Companies House and can be performed online (https://online.gov.uk/registration).
- Obtain a UK tax identification number
Upon registration of your business, the Companies House will issue you a 10-digit Unique Taxpayer Reference (UTR), which is required by the bank, and your business, for reporting information to the UK tax authority, HM Revenue and Customs (HMRC). You can obtain this number directly from the website www.online.hmrc.gov.uk.
- Determine Bank Requirements
With few exceptions, you will need to visit the bank in the UK where you wish to open the account. This is required to:
- Verify your identity — official photo (passport) ID
- Physical address
- Verify and note your company registration
- Verify and note your Tax identification number (UTR)
- Again, ask the bank for specific details on what is required.
There are other options to the traditional approach of establishing a UK bank account to conduct business with UK countries.
For example, you may already have an account with a large international bank that also has banking operations in the UK, and they may be able to help you establish an account in the UK. Keep in mind that, depending upon your bank, the tariffs incurred may vary based on the pounds of business being exchanged. There are also firms, based both within and outside the UK, which offer services to foreign companies looking to open UK bank accounts. Their fees and services vary widely.
Whether you work directly with a UK bank or utilize firms that act on your behalf, these approaches have different costs associated to them in terms of both time and money.
Perhaps the simplest option for individuals, freelancers, and small businesses outside the UK are global payment platforms such as Payoneer, which doesn’t involve opening a UK bank account at all.
Payoneer provides a fast payment path between buyer and seller, across borders and currencies, with relatively simple setup, entirely online – no matter where you are located. Both buyers and sellers can register themselves on the Payoneer service in a matter of hours, in some 200 countries worldwide, and be exchanging in a matter of days — for far less than the wire transfer fees or other tariffs charged by conventional banks.
Payoneer’s Global Payment Service gives users access to receiving accounts in various countries, enabling them to receive money easily from clients and companies abroad. If you’re doing business in the UK and need to receive GBP, Payoneer offers a UK receiving account which will allow you to do so easily.
The Payoneer approach provides many features and benefits, all of which mitigate the costs associated with other approaches, in terms of both time and money.
» Payoneer allows you to apply for your account on-line, negating the need for you to physically be in the UK to open an account.
» Payoneer simplifies your experience, asking for only necessary documentationand handling the entire process quickly and online.
» Payoneer provides per transaction pricing, reducing your overall cost. Compare this to the many tariffs you are likely to incur with the more traditional approaches.
» Payoneer provides a solution that is quickly established within hours, not days or weeks that it may take with more traditional approaches.