A virtual company bank account can play an important role in your corporate banking stack.
This is especially true if your company deals with high-risk countries, industries, or transactions – which makes it prone to account closures, freezes, and investigations.
In this article, we’re going to be specifically looking at how entrepreneurs can use digital banking options to open a business IBAN account in Europe.
Feel free to use the table of contents to jump ahead to the sections most relevant to you.
Table of Contents
- Virtual Bank Accounts 101
- Should You Open a Virtual Company Bank Account?
- Who Can Open a Virtual Company Bank Account?
- Frequently Asked Questions
- Do You Want Help Opening Bank Accounts?
Virtual Bank Accounts 101
Virtual bank accounts can mean a lot of different things. In fact, a virtual bank account can refer to a simple tech company with zero financial licenses all the way up to a fully licensed bank.
Ultimately, the licensing the financial institution has depends on the jurisdiction where the virtual account is held and how it operates accounts. For example, in Europe, there are three popular licensing jurisdictions for virtual accounts:
- Lithuania
- Malta
- United Kingdom
Other countries offer licenses related to banking and payments as well, but these three jurisdictions tend to have the most popular options available.
So, why does this even matter?
Well, if you are planning on opening a virtual company bank account, you should know where your money is deposited, who controls it, and what the restrictions (and limitations) are at that financial institution. Right?
In the case of Europe, this often means that your funds are either deposited with the Central Bank in one of the countries mentioned above (e.g. European Central Bank or the Bank of England), or they’re held with a correspondent bank. This isn’t too dissimilar to what you would expect from traditional banking.
But, in certain instances, you might find that the virtual service provider you are using is just subleasing a license from another service provider. And that can sometimes add both operational and correspondent risk.
Alternatively, if you’re looking for a sophisticated banking jurisdiction that accepts large corporations in need of a business IBAN account, you might consider opening a bank account in Luxembourg.
Before diving in, if this is your first time visiting GlobalBanks, don’t forget to download your FREE Business Banking Starter Guide. It’s designed to help your business find and open accounts with the services you need around the world.
Should You Open a Virtual Company Bank Account?
In general, we suggest using a virtual company bank account as a backup account or a transactional account for your company. In other words, you shouldn’t use a virtual account as your primary banking option or as a place to hold large deposits for extended periods of time.
With this in mind, if you are looking for a primary banking option, you should consider one of the traditional brick-and-mortar banks that your company can access instead. If this is something you need assistance with, don’t hesitate to contact us and let us know your requirements.
Depending on your company structure, another suitable banking jurisdiction that might be worth considering is Jersey. Individuals who are interested in foreign investment into the UK or a business bank account in Jersey can follow this link to learn more about Jersey business banking.
Who Can Open a Virtual Company Bank Account?
When it comes to opening a virtual company bank account, there is typically more flexibility in terms of eligibility and what types of entities will be accepted.
In fact, certain European virtual account providers will even accept companies in high-risk industries and from offshore jurisdictions. It just depends on which platform you choose and whether you can pass due diligence and meet the account opening requirements.
To help you with choosing the right virtual account provider, our team has published two detailed reports on European virtual accounts:
- European EMIs for Non-EEA Businesses
- European EMIs for Non-EEA Individuals
Each report lists the specific virtual banking options available in the EU, their client preferences, unique account opening quirks and sensitivities, important considerations, and much more.
You can get immediate access to both of these reports (and many more) when you join either GlobalBanks IQ or GlobalBanks Insider.
Frequently Asked Questions
Below are some of the most common questions that we receive from people looking into opening a virtual company bank account. If you have further questions you would like answered, don’t hesitate to get in touch with us directly.
Can I Open a Virtual Company Bank Account?
Most companies can open a virtual bank account. To do so, business owners need to select a provider that will realistically accept them, be able to meet the account opening requirements, and provide specific supporting documents for both themselves and their company.
While it sounds straightforward, many entrepreneurs get tripped up and end up sabotaging their applications because they give poorly thought-out answers, incomplete documents, or don’t understand what is being asked (or where the sensitivities are).
Which Banks Offer Virtual Accounts?
In most cases, virtual accounts are offered by financial technology companies that have a separate financial license (and are not banks). That said, there are certain banks that do exclusively offer virtual bank accounts.
Are Virtual Accounts Safe for Foreign-Owned Businesses?
Virtual accounts are a suitable option for transactional business accounts which are needed to send and receive transfers in Europe. However, we do not suggest using virtual accounts for holding deposits for extended periods of time.
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.
GlobalBanks Insider is a dedicated account opening solution that involves direct support from our team and direct introductions to the banks of your choosing. It gives you instant access to the…
+ Direct support from a team of banking experts
+ Direct introductions to your desired banks
+ Answers to your most pressing questions and challenges
+ Expert insights on which banks to choose & why
+ Plus FULL access to our entire suite of account opening tools and intelligence!
And “yes!” GlobalBanks Insider is designed to help foreign and non-resident individuals and companies open bank accounts.
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