How To Open A Foreign Bank Account: All Explained
Whether you're working overseas for a year or moving to the other side of the world for several years, you'll almost probably need to open a foreign bank account in your new country immediately. But how to open a foreign bank account when you are not even in that country? To make the best decisions, you must anticipate this process by being knowledgeable about the financial system, transaction fees, and your prospective liabilities.
You may be wondering what international accounts are. Foreign financial accounts are defined by the IRS as any financial accounts situated outside the United States. This includes checking and savings accounts, securities accounts, international retirement and pension accounts, and even prepaid debit cards! There are exceptions, and consulting an expert before opening a foreign bank account may be beneficial if you want clarity or have a particular scenario.
When it comes to open a foreign bank account online, there are two primary options:
Working with a global digital bank or working with a high-street bank in another country. Most of the time, traditional banks want several documents to ascertain your ID, income, residence address and sometimes they want to conduct even more detailed inspections.
But digital banks - and digital-only banks demand less paperwork, offer much more flexible options particularly about the place of residence. And it makes them more preferable. Let’s consider that you need to open a foreign account in the US but do not live there physically, digital only banks offer solutions to overcome physical address solutions and can provide you with local bank account info.
Caption: Digital banks are convenient when it comes to open a foreign bank account online via speed, integration with multiple payment methods.
For the last decade, challenger banks have come up with digital solutions for most tasks that traditional banks do with lower fees and high speed. And they also made the process of opening a foreign account in a different country much less painful.
These banks include N26, Revolut, Monzo, Monese, Bunq, and Starling Bank in Europe, among others. Digital banking is also growing in popularity in the United States and Canada, with banks such as Chime Bank and more.
The answer is digital banking and online payment systems. As indicated before, challenger banks enable you to make or receive online payments without the hassle of obtaining documents, which we shall address in further detail below for traditional street banks.
The default option for the majority of individuals whether relocating to a new country or looking for a foreign bank is to open a foreign bank account with a traditional bank.
Traditional – international banks have several branches over the world. But having a branch in a country does not necessarily mean accepting non-citizens for your other branches. They will still require documents and proofs to open a new account in their foreign branch.
When you open a foreign bank account, you will need to bring identification with you. Generally, your passport is sufficient, but you may be required to carry two forms of identification, one of which must be international.
Often, you will be required to present evidence of address as well. Alternatively, you may bring your rental agreement or a utility statement to establish your residence.
Additional documents that may be required, depending on the bank, the type of account you are opening, and the financial services you require; including an initial deposit, a bank reference or recent financial statement from your home bank, your employment contract, etc. As we see, international banks can be that strict too.
Lastly, banks may request information about the source of your deposits to open a foreign bank account. You can deposit funds into your account with a debit card or through wire transfers.
International accounts may be offered by banks having a global presence. This might be a helpful alternative for foreigners who do not have a US address. You may create an account from your native country, eliminating the need to go to the United States in advance to open a foreign bank account in the US. The majority of banks even provide web-based services that enable you to open a bank account online.
Caption: International banks such as HSBC or Citibank has several branches globally and facilitate the process of opening a foreign bank account.
HSBC, Charles Schwab, and Citibank are just a few of the leading banks having a significant worldwide presence in the United States and elsewhere. Citibank, with operations in more than 30 countries, may have the broadest reach of the three.
The following are some of the most often encountered criteria to open a foreign bank account:
- Minimum initial deposit.
- Evidence of residence.
- An identification card issued by the government.
Once again, restrictions differ by country and bank. Before attempting to open a foreign bank account, confirm the criteria with your local bank.