Opening a business account for UK subsidiary

Discussion in 'Accounts & Finance' started by LanceUk, Jan 22, 2020.

  1. LanceUk

    LanceUk UKBF Newcomer Free Member

    3 0

    I am trying to open a business account for a UK Limited company (already registered) tat is 100% owned by a US Private Company (LLC). All of the directors of the local company are directors of the US company and are US resident/citizens. They currently have 1 PT employee and are looking to add on 5 FT employees. It is a completely legitimate operation. First year revenue with current contracts is expected to be between £1.5 - £2m and given the industry they operate in and their specialist expertise, it is expected to grow.

    The bank has to be FCA regulated for legal reasons. I have tried most of the main high street banks, by contacting them and two simple questions: a) Can a local employee open the account and be a signatory even if they are not a director? And/or b) Can a foreign director, if they front up with the right paperwork to identify them and the parent company as well as accounts of the parent company if required, open and operate an account (no need for cheques/cards - just a way for clients to pay in and for them to remit to their employees/suppliers... And of course some divident back to the US company if required).

    I was gobsmacked at the fact that their front of house reps would anser yes to either and then progress to the next stage, which was an interview or call with the director. Even at this stage, 1/2 of the banks took the relevant information saying it was OK to proceed and not untile presumably their Compliance team looked at it was it rejecteed. Unbelievable how badly trained their staff are.

    Does anyway know what the best way to proceed is - if it is possible - to open a bank account for UK (England/Wales) registered company where the directors are all US resident/citizens?

    Thanks in advance,
    Posted: Jan 22, 2020 By: LanceUk Member since: Jan 8, 2018
  2. consultant

    consultant Your Business Community Staff Member

    5,548 773
    Speak to a US bank that operates in the UK or a UK bank in the US!

    You could also speak to the new 'challenger' banks in the UK who tend to primarily be online - some of those may be able to help as it is the business that will have the account, not individuals.
    Posted: Jan 22, 2020 By: consultant Member since: Jan 21, 2008
  3. eteb3

    eteb3 UKBF Regular Free Member

    145 17
    Sorry front of house have been so numpty. It's very common that they don't know the compliance rules, sadly.

    Worth a try, I guess. My experience: trying to get HSBC in Beirut to treat me like an HSBC UK customer. I might as well have asked them to recognise my account with Bank Audi in Beirut: they were completely separate entities. But a letter of introduction from your US bank to its UK correspondent may help, I guess. They can't really introduce the UK entity, though, I suppose.

    On the UK High Street, I've found Metro Bank more risk averse because of being a challenger, rather than less.

    Another possible avenue might be to have a UK *secretary*, if an employee won't cut it. As an officer of the company they might count for more?
    Posted: Jan 22, 2020 By: eteb3 Member since: Jul 18, 2019
  4. LanceUk

    LanceUk UKBF Newcomer Free Member

    3 0

    Thanks - tried the US banks in the UK - they only handle high net worth accounts or large cop (revenue > £10M). Santander has branches in the US, but, they may have well been HSBC in Bierut. The challengers I saw (Metro, Tide, et al) all wanted resident directors.

    Trying one more high street bank tomorrow. If no go, then the PT employee will have to become secretary/director.

    Thanks again!
    Posted: Jan 22, 2020 By: LanceUk Member since: Jan 8, 2018
  5. eteb3

    eteb3 UKBF Regular Free Member

    145 17
    If they do accept a secretary (less powerful than a director, but still...), I imagine you could limit their authority by contract. Quite possibly in the articles, too, so outsiders are on notice. I imagine The Resolver (lawyer/mediator on the forum) could tell you.

    Or there are any number of secretarial companies, and many high-street accountants would do it, too.
    Posted: Jan 23, 2020 By: eteb3 Member since: Jul 18, 2019
  6. eteb3

    eteb3 UKBF Regular Free Member

    145 17
    Final thoughts -

    If you're worried (as I would be) about handing the crown jewels to your p/t employee, you could look at making him/her joint secretary with your accountant (while probably sole signer at the bank up to £x).

    Or if it's not important that the bank account is in the company name (ie, it's just important that the providing bank is FCA registered) that may open up other possibilities for you? This thread refers to someone in just your position:
    (ht @Scalloway )

    If you do find a creative solution, let us know! :)
    Posted: Jan 24, 2020 By: eteb3 Member since: Jul 18, 2019
  7. UK Contractor Accountant

    UK Contractor Accountant UKBF Big Shot Full Member - Verified Business

    4,833 829
  8. gpietersz

    gpietersz UKBF Enthusiast Full Member

    672 139
    I think that is typical because of the amount of work they have to do because of money laundering regulations - the UK's regulations appear to be carefully designed to make life as difficult as possible for legitimate SMEs while not interfering with the operations of profitable people like Russian organised crime.
    Posted: Jan 24, 2020 By: gpietersz Member since: Sep 10, 2019