When you’re busy globetrotting with a glamorous expat job, the last thing you want to worry about is how to open a bank account as an expat.
But, as you already know, having an international bank account is critical to supporting your expat lifestyle.
In today’s article, we’re going to help you navigate the tricky process of opening expat bank accounts, including how to choose the best European banks for expats and what other banking jurisdictions are worth considering.
Feel free to use the table of contents to jump ahead to the sections most relevant to you.
Table of Contents
- How to Open a Bank Account as an Expat?
- What Is Expat Banking?
- When Should You Open a Bank Account as an Expat?
- What Matters When You Open a Bank Account as an Expat?
- What Are the Requirements for Opening Bank Accounts as an Expat?
- Where Can Expats Open Bank Accounts?
- Do You Want Help Opening Bank Accounts?
How to Open a Bank Account as an Expat?
Opening a bank account as an expat requires careful consideration and preparation. This includes understanding your specific banking needs and financial goals, knowing which banks offer the products and services you’re after, and meeting the bank’s specific account opening requirements.
Before diving in any further, if this is your first time visiting GlobalBanks, don’t forget to download your FREE Non-Resident Banking Starter Guide. It’s designed to help non-residents open an international bank account in top banking hubs around the world.
What Is Expat Banking?
Expat banking is international banking for employees living and working outside their home country. Expats are usually high earners with large salaries and lofty relocation packages. Banks know this and want them as clients, so some create entire expatriate banking divisions to serve them. Other banks, however, couldn’t care less.
Unfortunately, opening an account as an expat isn’t always an easy task. The ability to access the best expat banking options depends on a few important factors, such as which part of the world you’re in, the documents you have available, how much you can deposit, your source of income, if you have a pre-existing relationship with the bank, and several other factors.
Expat banking is also painfully annoying to set up and comes with major constraints. This is especially true if you’re looking for expat banking in Europe and want to open a bank account in Hungary.
Some banks likely limit how many transactions you’re allowed to send per month. Other banks have restrictions on transfers to certain countries or currencies. Customer service might be slow and non-existent, and some reps are unable to speak English (unless, of course, you’re an expat in a banking hub like Singapore or Switzerland).
Another downside is that the fees can be painfully expensive and impossible to avoid. And then, when you leave the country, closing or transferring your account can come with even more headaches and sometimes unexpected tax consequences.
This is why bank and account selection as an expat is so critical. If you choose your banking relationships carelessly and aren’t aware of the pitfalls, you could end up with tons of problems and paying thousands in unnecessary fees.
But don’t worry, when you open the right expat bank account, you can reap some serious benefits and make money.
When Should You Open a Bank Account as an Expat?
That depends. The first question you need to ask yourself is…
Do you need to open a bank account before or after you arrive in the country?
Your answer to this question dictates your banking options and which banks accept you. This determines fees, service quality, which documents are required for account opening, and how much money you need to deposit.
Simply put, if you need to open a bank account before arriving in your new country, your options could be limited. This is because opening an account remotely has become extremely difficult and not all banks allow it. Most banks that allow remote opening for lower-level retail customers are often lower quality. Better banks usually only allow remote opening in special cases. The bank may also require a higher minimum deposit or balance and charge additional fees.
For these reasons, and those shared below, we recommend opening expat bank accounts in person. Unless you are opening an account in an offshore banking hub where remote opening is more common.
Many expats want to have various home and life essentials set up and arranged before they arrive in a new country. This can range from an apartment and cars to schooling for their children. This might also include setting up basic public services, like the internet, water, gas, and electricity. But these living necessities in foreign countries almost always require a local bank account.
In this case, you will likely want to open a local bank account remotely. If you’re an expat in this situation, stay tuned, because we’ll outline a remote account opening option for you below.
If you’re one of the lucky expats who get to visit their new country before relocating, then you need to plan carefully. More specifically, you need to take advantage of the trip from a banking perspective. In such instances, we strongly recommend choosing your desired banks before and then opening the best expat bank account possible during the visit.
Of course, you’ll still need to know which bank to choose, which documents to provide, which branches and bankers to contact, and which account opening strategies are best for expats in that particular country. But we’ll help you get started with all of this below.
What Matters When You Open a Bank Account as an Expat?
There are a few common reasons that attract expats to open more international, expat-friendly accounts. We already shared a few of these above.
Expats have a unique set of banking needs, concerns, and requirements that most people who live in their home countries never have to deal with or even consider. How a bank deals with your particular set of expat-centric needs ultimately dictates which bank will be best for you. So, with this in mind, we’ll cover a few more expat-specific challenges that often get overlooked when choosing a bank in more detail.
Getting Paid as an Expat
One of the most obvious reasons for wanting to open a bank account as an expat is to receive your salary. And, it makes sense. Many expats want to have their salary available in the country where they live and pay expenses.
In other cases, your employer may tell you to open a local bank account. This is because some companies will only deposit salaries in local bank accounts or in certain countries. Companies may require their expat employees to be paid via their local bank accounts for various reasons. These can range from anything from tax efficiencies, to cost savings and operational convenience.
While most accounts will happily receive your money, you should pay careful attention to the fees. At the very least, you should check the fees for inbound transfers and currency conversion.
Being Charged Expat Fees
Many banks catering to expats increase fees significantly higher than they would normally charge local clients. If you’re not careful, this can take a big chunk out of your monthly salary.
With this in mind, be sure to ask your banker for a clear list of all fees related to your account before the account is opened. This should include all fees related to inbound and outbound transfers. It should also include any recurring fees for account maintenance, monthly reporting, and more.
Lastly, be sure to ask if there is a fee for closing the account. This is one fee that can end up costing you significantly later on.
Covering Expenses Back Home as an Expat
Just because you can receive money in your account doesn’t mean that you’ll be able to send it out whenever and wherever you like. Unfortunately, there are often restrictions and limitations that many expats only discover after their account is open.
For instance, they discover that their bank (or the country) restricts outgoing transactions in certain currencies, charges absurdly high conversion or transfer fees, requires them to physically come into the branch to make an outgoing transaction, or won’t sync to services like Transferwise.
These inefficiencies waste a lot of your time and money. They can also make it difficult and expensive to send money to your home country. For instance, as an expat, you might have expenses back home that you still need to pay. If your expat bank account doesn’t allow you to do this cost-effectively (or at all), you have a big problem.
So, before you open a bank account as an expat, you need to make sure the account you’re choosing isn’t going to give you problems and cause a world of pain.
Making Local Payments as an Expat
Naturally, you will also be looking to use your expat bank account to pay for expenses locally. This might include fixed monthly expenses as well as payments for everyday items such as groceries, restaurants, or transport.
While many people use credit cards from their home country to cover local expenses, this isn’t always economical. Depending on the card you have and the policies of vendors in your host country, you might have problems. For instance, your credit card company might end up charging extortionate foreign exchange fees for purchases made in local currency. They could also charge you additional fees for foreign transactions.
Another problem that expats run into in some countries is that local service providers can’t accept foreign credit cards. For instance, in Panama, many delivery services and local service providers only accept locally-issued credit and debit cards..
If any of the situations above happen in your host country, then you should get a local debit or credit card to replace the card from your home country. But not all banks will offer this to you. Depending on which country you are in, some banks will even require you to have a certain type of visa to be issued a debit card. Ultimately though, whether or not you need a local debit or credit card will depend on your needs and the country you are in. Regardless, make sure that the bank you’re opening an account with actually offers such services.
Investing as an Expat
As a well-traveled member of the professional world, there’s a strong chance that you’re investing a portion of your salary. Whether your investments are managed by a professional advisor or you manage your investments yourself, you need to make sure that your expat bank can transfer money into your investment accounts.
This is a common problem that most expats don’t realize until it’s too late. For instance, the first time they try to send a large sum of money to their overseas investment account, they’ll discover that the transaction is blocked, that there are enormous fees attached, or that the bank requires them to come into the bank to execute the transaction.
Not talking to your banker before making an abnormally large outgoing transfer is almost always a bad idea.
As a quick recap, here’s a list of items that you should confirm with the bank before opening an account.
- Account maintenance and transaction fees
- Restrictions on the frequency and value of incoming and outgoing transactions
- Restrictions on countries or currencies that you can send money to
- Currency conversion fees
- Availability of credit and debit cards
- Ability to manage the account without visiting a branch
- What can be done (and not done) via online banking
- Quality and speed of their English language customer service
What are the Requirements for Opening Bank Accounts as an Expat?
Account opening procedures are slowly starting to become more standardized internationally. However, the process still varies dramatically from country to country and bank to bank.
This means, that in addition to the questions outlined in the previous section, you’ll need to confirm a few other items before applying.
What Requirements Should Expats Prepare For?
- What specific documents do you need to open the account
- What form(s) of authentication (if any) do you need for the documents
- Are there any other fees you need to know about?
- What is the minimum deposit that you need to open the account?
- What is the minimum balance you need to keep in the account?
- And more…
Let’s take a closer look at these requirements.
When it comes to the specifics of the documents required to open an account, most banks have their particular requirements. So it’s important to know what these are before applying or visiting a branch to open the account.
Many of the documents are from foreign countries and this is where many expats get tripped up in the opening process. Many don’t realize that the bank needs to verify the authenticity of these documents and that each bank has its specific procedures for authentication.
For this reason, you need to know what types of authentication are required before you start compiling documents. This is important as the process can be costly and time-consuming.
As for the minimum deposit and balance requirements, these are often negotiated directly with the banker opening your account. So be sure to ask beforehand.
Where Can Expats Open Bank Accounts?
As promised, we’re going to share one of the best places to open a bank account as an expat. But before doing so, we want to introduce a relatively new concept, which is opening an international expat bank account instead.
Most expats open a new bank account every time they move to a new country. Local accounts are useful and are sometimes necessary, however, opening and closing accounts every time you move to a new country is time-consuming and expensive.
Ideally, you want to have at least one international bank account with reasonable fees that you use for transactional banking and keep over the long term, no matter which country you move to next.
Over the years, we’ve seen a growing number of banks in traditional banking jurisdictions making moves to meet the needs of expats and location-independent individuals. These offshore banks often tailor their offerings to appeal to the very unique needs of their international clients.
One example of an offshore banking hub where UK bank accounts for expats are available is the Isle of Man.
Expat Banking in the Isle of Man
The Isle of Man is an interesting banking jurisdiction for several reasons. Including the fact that it’s economically sound and has a relatively stable currency. On top of that, it has a long history of providing banking services to non-residents and international clients.
Today, some international and UK banks operate from the Isle of Man. Although, we do not recommend banking with many of them.
Like most banks in the UK and Europe, many banks in the Isle of Man have subpar financials. And as far as their liquidity is concerned, some of them make our analysts a bit uncomfortable.
However, there are a couple of strong options. And, if you choose the right bank (and bank account) in the Isle of Man, you can capture all of the key benefits that expats look for in a bank.
We outline the entire step-by-step process for getting the best bank account and all of the expat banking services you need in our premium report Banking in the Isle of Man: Expat Bank Account Opening.
If you are already a GlobalBanks Insider and you’re looking for expat banking services, we strongly recommend reading this report now in the members-only Intelligence Reports section of the website.
Do You Want Help Opening Bank Accounts?
If so, you can access GlobalBanks Insider and start the process of applying for an offshore account in a few clicks.
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