Opening a US Business Bank Account as a Non-US Resident Guide

Opening a US Business Bank Account as a Non-US Resident Guide

December 2, 2021
9
 Min Read

Once you’ve set up your company, the next thing you need to do is to open a US bank account. But before you jump the gun, there are few things you should know about opening a US business bank account.

This article is part of our US LLC for Non-residents Ultimate Guide. If you haven’t read it, please

Can a Non-US Residents (Foreigner) Open A Business Bank Account in the US?

Yes, it’s possible to open a bank account for a non-resident. However, this mainly works through a US LLC or Corporation. To open a bank account in the United States, you incorporate a US company and then set up the bank account through that company. Contrary to popular belief, it’s easy to open a bank account for your US LLC or Corporation, and it’s possible to do so remotely.

Benefits of Having a US Bank Account

Aside from the obvious reason that you need a Business Bank Account in the United States so that your US company can do business, get paid by customers, and pay your suppliers and employees, there are few other reasons to open a US bank account.

USD Account by Default

Most international trade is conducted in USD. A USD account in the United States means you can send and receive funds from all over the world. When you receive payments from your customers, they’ll most likely pay in USD, and you can easily accept them without having to convert the USD to your local currency (if you use your local bank account), therefore avoiding foreign exchange rate losses.

Access to Online Marketplace

If you are an online business, you might be receiving payouts from Shopify Payments, Stripe, Amazon, 2Checkout, Google Adsense etc.  Virtually all of them would require you to provide a US Bank Account so that they can pay you.

High-Reputation Banking Jurisdiction

As a banking jurisdiction, the United States has one of the best reputations in the world. Generally, payments sent to or received from the United States aren’t scrutinized very closely. Banks rarely ask about large payments going to or from US bank accounts because they’re so commonplace. This is in stark contrast to banks in other countries such as Panama, the Seychelles, France, or Malaysia, where you’re very often asked about the nature of the transaction and have to provide more proof.

$250,000 deposit guarantee

If you bank in the United States, the FDIC insures your deposits up to $250,000. That’s more than anywhere else in the world, including Singapore and the European Union (EU). The Federal Deposit Insurance Corporation (FDIC) is an independent agency created by Congress to maintain stability and public confidence in the nation’s banks. The FDIC insures that your deposits at a US bank are protected from losses due to a bank failure.

Access to US credit card perks

Credit card companies in the United States often offer huge incentives to apply for a credit card with them. Having an account with US Bank can help you build your credit score. With a good credit score, you can easily sign up for credit card programs that offer huge bonuses and perks that are 3x-5x higher than programs offered in other countries.

US Banking system is not in the CRS.

CRS is an acronym for Common Reporting Standard, an OECD-led initiative to automatically exchange financial account information between governments. The United States is the only first-world country not currently participating in the CRS. Simply put, your account balance in the United States isn’t reported back to your home country at the end of the year, which is very valuable from a privacy perspective.

What do you need to open a US Business Bank Account?

Before you approach a US Bank, it’s important to have a plan of action. You need to make sure you obtain all the necessary documentation before proceeding. The prerequisites are as follows for a bank account opening process:

  1. Incorporate a US company, either a LLC or Corporation in any state of the United States and obtain the Certificate of Formation (LLC) or Articles of Incorporation (Corporation) .
  2. Obtain a US Address.  Depending on the bank, it may be your registered agent address, your virtual mailing address, or even your physical address. Some banks will require proof of address like utility bill or lease agreement.
  3. Obtain your EIN (Employer Identification Number) from the US Internal Revenue Service (IRS). An EIN is equivalent to a taxpayer identification number at your home country. You do not need a SSN or ITIN to obtain the EIN for your US Company.
  4. Prepare a limited Liability Company Operating Agreement (LLC Operating Agreement) and in some cases some banks would require a Banking Resolution.
  5. You also need to provide some proof of identification for you and any other significant shareholders or company officers. This could be in form of Passport, driver’s license or national ID card.
  6. Obtain a US Phone Number. Some banks will require you to have a local phone number in the United States, and will even go so far as to verify whether your number is a VOIP number or a real phone number

Do I need to have an SSN or ITIN to open Business Bank Accounts?

Contrary to popular belief, it’s possible to open US business bank accounts without an SSN or ITIN. There are some banks that will accept applications even if you don’t have an SSN or ITIN, but if it’s possible, get one and you’ll have a wider range of options. Regardless, the EIN is a must for your business

Your Options for opening Business Bank Accounts in the US as a Non-Resident

You have few options when opening a business bank account in the United States. It all depends on whether you can travel to the United States, because that’s an important factor in the availability of banking options. In this Post-Covid world, traveling could be a hassle, and we’ll look at some banking options that depend on your ability to travel.

Brick-and-mortar Banks + Remote Opening (Not able to travel)

Brick and mortar banks are traditional banks that have a physical presence in a specific location. Normally, you would need to visit their office and open a bank account in person, but there are certain cases where you can open a business bank account remotely if you know the right person at the right branch.

In addition to this, the nature of your business, and also the minimum deposit plays an important factor in the remote bank opening process.  You would be expected to put in from $10,000 to $100,000 as a minimum deposit to be considered for remote account opening. We know for a fact that Bank of America and JP Morgan Chase allow remote opening if you are the right fit for them.  

Brick-and-mortar Banks + Correspondent Bank (Not able to travel)

You can open a US bank account if the bank in your home country has a relationship with a US bank.

For example, as a Citigold customer in your home country, you could request your bank account manager in your home country to help you open a remote account with Citibank USA. The same goes for HSBC Premier account holders, since HSBC also has branches in the United States. Be creative: If you’re an esteemed customer at your local bank with branches in the United States, talk to your account manager and ask how they can help.

Neo banks + Remote Opening (Not able to travel)

In recent years, there has been a rise in Neo-banks - online banks that offer deposit taking and other banking features, but don’t have a physical branch network. Sometimes they’re referred to as virtual banks. Before you rule out this option, keep in mind that most Neo-banks in the United States operate like a real bank in terms of security. Most Neo-banks work with real US banks and the bank accounts are FDIC-insured, meaning the money deposited in the account is insured by the Federal Deposit Insurance Corporation (FDIC) up to $250,000 in case of collapse of the bank.

Neo-banks are useful if you’re looking for a US Bank account that do not require any minimum deposit and the ability to issue physical and virtual debit cards to you and your employees. In addition to this, Neo-banks are very competitive when it comes to fees, sending and receiving international wire could be as low as $0.  

Neo-banks are the most user friendly for non-residents and foreigners. You can open a business bank account from anywhere in the world and your application would be processed online without having to travel to the bank.

Brick-and-mortar Banks + Apply in Person (Able to travel)

If you are able to travel to the United States , your choices for opening a US bank account is wider and you can use the old school method. You can visit a branch and open a business bank account in person. Depending on the branch that you visit, the bank would either insist you need a SSN or ITIN. We would advise you to avoid the ones that insist on SSN/ITIN as it is totally possible to get a Business Bank Account even when you don’t have one. Two different branch for the very same bank could give you very different opinions on this issue. Some banks or branches make it easier to open a business bank account as a foreigner, if you don’t have a SSN/ITIN, simply mention it to your banker and he/she may waive this requirement for you.

You would want to choose banks that are bigger with international networks as they have higher chance of dealing with non-resident customers before and thus have the experience needed.  Even better, go to cities that have a high number of foreign expats and immigrants. Florida is a good example of a state that has a large number of expats and immigrants.

In any case, the bank would require you to have your EIN ready when applying for an account in person.  Most of them would also need you to provide proof of your US company address in the form of utility bill or lease agreement, be sure to have these ready before you fly into the United States.

Why a Neo-bank is better than Brick-and-mortar [Todo]

US banking has a reputation for being rather old-fashioned, even though it’s a very technologically advanced country. Foreign transaction fees are high, and they aren’t particularly multi-currency friendly either.

Most banks prefer face-to-face contact, and if you’re accessing your bank account from abroad most of the time, this can set off alarm bells and suddenly get you blocked. This is certainly a less than ideal situation for a global entrepreneur or a digital nomad

Given any day, brick-and-mortar banks would prefer to deal with customers who reside in the United States. On the other hand, some neo-banks are more flexible and work with customers who're not necessarily residents of the United States, and they're aware of the needs of non-residents.

As for costs, almost all neo-banks have no minimum deposit for bank account opening, which is awesome if you're just starting out. Also, the cost of sending and receiving international wires is cheaper than traditional banks, and in some cases it's even free.

Neo-banks have come a long way in recent years. They're growing fast and becoming very popular, and it's worth considering them. They're much more technologically advanced and customer-focused than their traditional peers, offering high-quality services at low fees - something that's very hard to find in traditional banks.

Neo-bank Business Banking Recommendations

We have compiled a list of Neo-banks in the United States that are suitable for non-resident and foreign entrepreneurs to apply remotely.  

Mercury

Mercury is an online banking platform that’s friendly to non-residents and foreigners. Mercury features both a business checking account and a business savings account, both of which have no monthly fees. One of Mercury’s main advantages is its simple offering and user-friendly platform. In just 15 minutes, startups can apply for and gain access to a FDIC-insured business checking and savings account, as well as a debit cards. Mercury bank accounts offer API access, physical and virtual debit cards, team management and other features, all accessible through a mobile banking app.

RelayFi

RelayFi, a digital banking platform for small businesses, accepts non-residents and remote bank account openings just like Mercury. With RelayFi, you can easily set up recurring payments and automate multi-step approvals for bill payments. Just like Mercury, you can instantly issue physical and virtual Mastercard debit cards for your business and team. RelayFi also helps you speed up  your accounting by allowing you to enter bank information directly into QuickBooks Online and Xero.

Brex

In recent years, Brex has shined as a rising star in the fintech industry. Brex offers you a business charge card with many benefits without the need for personal credit or a guarantee. A charge card balance is due in full at each billing cycle, and you can’t carry the debt over to the next month like you can with a regular credit card. The good thing, though, is that there’s no interest. Brex also rewards you with points for various purchases made on the cards for you and your employees.

Brex does allow non-resident applications, but you must’ve a physical real address in the United States to have your account approved.

Wise

Wise has been around since 2011 – you probably know it better by its old name TransferWise. Although not strictly a bank as their bank accounts are not FDIC-insured we are still including them in this list because their service is extremely useful for non-resident entrepreneurs who own a US Company. With a Wise Borderless Account you will have access to various foreign currency accounts around the world. You’ll get local bank details to receive fee-free payments in multiple different currencies, and keep them as a balance your account without converting it.

Wise charges lower and more transparent transfer fees and convert the money at the true middle rate. In other words, the exchange rate has no markups. Traditional banks, on the other hand, usually charge consumers a markup on the market rate; the margin is included in their costs and they’re usually opaque. Instead, Wise charges a variable conversion fee and a fixed fee when you transfer the money, which is usually 0.74% to 2%.

Airwallex

Similar to Wise, Airwallex is an emerging fintech platform that offers many more features at lower rates. When you apply for an account with Airwallex, you get several bank accounts in different currencies and deposits are completely free of fees. It’s worth noting that unlike Wise, Airwallex’s USD bank accounts are FDIC-insured. Airwallex charges a 0.2% to 1% surcharge on the interbank rate during foreign exchange. The markup for currencies such as USD/CNY/HKD is 0.2% and EUR/SGD/CHF is 0.3%; only for rarer currencies such as MYR, THB, KRW the markup is 1%.

Unlike Wise, whose debit cards are only available to certain nationalities, the cards offered by Airwallex support a wider range of nationalities. In addition, with an Airwallex account you can process credit card payments, just like Stripe does.

Need Help Setting up your US Company?  

At StartFleet we help U.S. and non-U.S. founders to set up and manage their companies in the US.

  • LLC and Corporation formation in Wyoming, Delaware, Florida and all other U.S. States
  • Over $500,000 perks from our partners
  • US Business Bank Accounts Opening
  • Expedited EIN Application
  • Stripe/Paypal application consultation
  • Shopify and Amazon FBA setup consultation
  • Customized Website Policies for your website

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