A Comprehensive Guide to Opening a US Business Bank Account for Non-Residents

Being the largest economy in the world, the United States remains a major focal point for international business. Every other entrepreneur and company from other parts of the world dreams of getting involved in doing business in the US market. However, opening a US business bank account for non-residents is one of the most important steps that an international business owner should take care of. A US business bank account plays a very vital role in streamlining transactions and even aids in bringing credibility among clients and partners.

In this guide, we will walk you through the process of opening a US business bank account if you are a non-US resident. We will discuss the challenges and best banks catering to non-resident entrepreneurs.

Read more: U.S. Company formation for non resident with bank account

Why Open a US Business Bank Account for Non-Residents?

Having a US business bank account for businesses based outside the US has manifold benefits:

1. Smoother Transactions: A US business account aids your company in managing the issuance of payments in US dollars, thereby steering clear of currency conversion fees and the extra delays involved with international transfers.
2. Business Credibility: Having a US bank account increases your company's credibility in transacting business with US-based clients, suppliers, and business associates. This is because having a US bank account proves that you are a legitimate and serious business entity with activities within the US borders.
3. Access to the US Payment Systems: A bank account for your US business opens your access to the US payment system, including credit card processing, ACH transfers, and wire transfers, thus allowing US-based customers to make easy payments for your services.
4. In other words, all services-from US-based payment processors like PayPal and Stripe through cloud platforms all the way to ecommerce solutions-require a business checking account in the US in order for non-US residents to use the full range of their features.

Discover the Benefits of Opening a US Business Bank Account as a Non-Resident!

Can Non-Residents Open a US Business Bank Account?

Yes, it is possible to open a business bank account in the US, though as a non-US resident, it's more problematic than doing so for a US resident. Generally, most US-based banks need to reach a certain threshold of paperwork and adherence to KYC/AML laws. Some banks are more friendly to non-residents than others.

The good news is now that most banks, especially digital and online ones, welcome international entrepreneurs and have devised quite flexible solutions. Besides that, there is a plethora of service providers specializing in assisting non-residents open US business bank accounts.

Exploring Possibilities: Can Non-Residents Really Open a US Business Bank Account?

Essential Guide to Business Checking Accounts for Non-US Residents

Opening a US business bank account as a non-resident requires some preparation. Here's a step-by-step guide to help you through the process:

1. Create a US-Based Entity

In general, you'll first have to create a US-based entity before you can be allowed to create a US business bank account. These may be in the form of LLCs or corporations. Business setup in the United States is not very complicated; you do not need to be present in the country. The best states to incorporate a company are Delaware, Wyoming, and Nevada due to their respective business-friendly regulations and tax breaks.

• Delaware is famous for its lenient corporate laws and therefore the most popular state of all for forming either an LLC or corporation.
• Wyoming has low fees for formation with even stronger privacy protection.
• Nevada does not have state corporate taxes and, basically, no regulation.

2. Apply for EIN (Employer Identification Number)

Once your company is set up and registered, you'll need to apply for an EIN with the IRS. In other words, this is the tax identification number for your business, and most banks require it before they can open a business account for you. You can apply for an EIN online or through any service provider who specializes in helping non-residents go through this process.

3. Choose a Bank That Supports Non-Residents

Not every bank in the US supports opening business accounts for non-residents. Therefore, finding out which banks work with international entrepreneurs will be very important. Most of the more traditional banks require a visit to the US in person, but a number of online and digital banks currently offer the possibility to open an account remotely. Here are some of the best options for non-US citizens:

• Mercury: One of the well-known digital banks for startups and international businesses. They offer easy online applications without requiring a visit in person. They target tech startups, SaaS, and ecommerce in general. You can apply remotely from outside of the US.
• Brex: Brex provides business banking-international founders, a corporate card, and a cash management account. While it is more focused on high-growth startups, it has flexible services for non-resident companies.
• Silicon Valley Bank: The favorite of the tech companies and startups is SVB. It provides business banking to non-residents; in some situations, though, this may require an in-person visit.
• Wise, formerly TransferWise, gives a multi-currency business account where you can hold US dollars and get paid as if you own a US account. It is really good for non-residents who desire to reduce fees in international transactions.

4. Prepare the Required Documents

Opening a US business bank account as a non-resident calls for a few documents that become indispensable during the process of opening an account. These are the following:

• Company formation documents: This includes your Articles of Incorporation or Certificate of Formation.
• EIN: Your Employer Identification Number from the IRS.
• Proof of identity: A valid passport or national ID.
• Proof of business address: While some banks will let a non-resident provide only a virtual business address, most require an actual US address, which can become a problem. You may want to use a registered agent or virtual office service.
• Operating Agreement: Some banks do require an operating agreement, showing the ownership and structure of your business, especially if your business is a multi-member LLC.

5. Apply for the Business Account

After you choose which bank you want to apply to and prepare all the documents, you can proceed with your application. With some banks, this process can be fully processed online, but with others, you will need to visit one of its US branches. Almost every fully digital bank and fintech allows options for opening an account remotely, which is super convenient for non-residents.

The Essential Guide to Business Checking Accounts for Non-US Residents

Best Banks for Non-US Citizens

Setting up a business checking account is considered tough when you are out of the US. However, certain banks and financial institutions do offer services that cater to their needs. The following are some of the good banks for non-US residents:

1. Mercury

Mercury is an online-first bank, and through it, getting a business account as a non-US resident is pretty easy without necessarily visiting the US. Opening an account is totally online, and it provides tools for managing your business finances, invoicing, and making or receiving payments.

2. Brex

Brex offers a financial operating system for businesses, including business checking accounts and corporate cards, all in one account. Brex serves international companies and high-growth startups. The Brex account was made to be easy and straightforward, with no minimum balance or monthly fee.

3. TransferWise (Wise)

The multi-currency account by Wise is quite a budget-friendly solution for international businesses needing to send, receive, and hold money in US dollars, among others. Though it is not a bank in the full sense of the word, it allows many really important features that make non-resident handling of US-based transactions much more comfortable.

4. Payoneer

Payoneer offers its services for both companies and freelancers: offering global payment solutions. They allow opening a US virtual bank account to receive payments from US clients and platforms. Though it is not a full-fledged bank account, it is helpful for a non-resident business owner who wants to deal with payments in the US.

Discover the Best Banks for Non-US Citizens

Challenges of Opening a US Business Bank Account for Non-Residents

While it is possible to open a US business bank account as a non-resident, there are still a few challenges:

1. Physical Presence Requirement: Generally speaking, most traditional banks require that the business owner must physically present themselves to open the account in the US. Fairly significant disadvantage for international entrepreneurs.
2. Strict Know Your Customer and Anti-Money Laundering Requirements: Financial institutions in the US have very strict requirements when it comes to KYC and AML. Simply put, being a non-resident means you could be looked at with higher scrutiny when opening a business account compared to others.
3. Proof of Business Activity in the US: You might be asked by certain banks for proof that your business is active in the US through means such as contracts with US clients, a business address based in the US, or employees based in the US.

Conclusion

Having a US business bank account for non-residents can hugely simplify the operations for a non-resident entrepreneur and add to your credibility in the US market. Opening a business checking account for non-US residents has some challenges, especially with traditional banks. However, several digital and online banks offer more flexible solutions today.

When choosing the best bank for a non-US citizen, one should consider options like Mercury, Brex, and Wise that will allow remote opening with minimum fees and flexible service. With proper preparation and the preparation of documents on time, it would be successful to open a US business bank account and benefit from the US market entirely.