How do I open a business bank account in the UK?
Foreigners doing business in the United Kingdom join the growing number of smaller companies that dominate the UK market. As of 2018, these small and medium-sized enterprises (SMEs) of 250 or fewer workers made up more than 99% of the businesses registered in the UK.
Although you do not always need to open a UK bank account to conduct your business, it can help to cut down on transfer fees and other financial hassles. Read on to learn who should open a business bank account in the UK and how to go about doing it.
Who Needs to Open a Business Bank Account in the UK?
There are three types of legally accepted corporate entities in the UK: sole trader, limited companies, and business partnerships.
Only limited companies and business partnerships require a UK business bank account to trade.
Sole traders do not need a business bank account, but most banks recommend it and offer special accounts for these smaller businesses.
Who is Eligible to Open a Business Bank Account?
UK citizens with good credit histories stand the best chance of opening an account, but you do not need to be a native UK resident to open a business bank account. However, banks tend to view non-resident applications cautiously to avoid fraud.
It's much easier to open an account from abroad with a locally based business partner. Most banks require that you come in person before they accept your application.
You should also know that opening an account as a foreign corporate entity rather than registering as a UK business makes it very difficult to get accepted.
How to Open a Business Bank Account in the UK
First, check with your current bank to see if they have branches in the UK. Although not necessary, it may be more convenient for you to stick with the same bank if you do a lot of transfers. Transfer fees add up when you move money between two banks unless you use a low-cost option like Remitly Money Transfers.
If your bank does not have branches in the UK, don't fret. Most of the big UK banks offer business bank accounts.
The requirements to open a business bank account are as follows:
- Proof of your identity and the identity of all named company directions - a copy of your driving license, national ID card, or passport
- Proof of address - a recent utility bill or bank statement
- Your business's name and registered address (either in the UK or abroad)
- Phone number, email, or other contact information
- The nature of your business
- A business plan (possibly)
- Be aware that you may need to prove your personal financial situation in some cases as well. A poor credit score and history makes acceptance less likely.
Stay Up-to-Date on the Latest Business News from the United Kingdom
Now you should know whether or not you need to open a business bank account in the UK and how to do it.
If you want your UK-based business to succeed, you must stay informed about vital financial and business regulations. You also need to stay up-to-date on any business news.
Never miss out on important updates from the UK business world when you read the Exeter Business Daily. Follow The Business Daily for all the latest business news along with great advice to help your UK business thrive.
