Company formation in the UK can be a powerful way for non-residents to kick-start their entrepreneurial dreams. According to a study by the Global Innovation Index 2021, the UK ranks 4th on the list of the best countries to start a business in.
While it was comparatively tricky in the past to open a UK-based company from outside the country, especially for someone who was not a European Union citizen, it is not so much the case anymore. The biggest game changers for non-residents have been company formation services for small businesses in the UK.
Small business owners, and e-Commerce professionals and freelancers outside the UK can now set up a UK business bank account by creating a UK limited company remotely. This article will cover how you can register for a UK-based business account and set up your own company within the country, even if you’re a non-citizen.
Laine Redpath
Do You Need a Business Account?
Enterprises come in various shapes and sizes. There are four types of business structures operating in the UK:
- Limited Company
- Sole Trader
- Partnership
- Limited Liability Partnership
Typically, sole traders outside the UK do not need a business account to manage their work-related finances within the country. However, even if you have no legal obligations to open a business account, we recommend that you set one up.
Opening a business account in the UK will allow you to receive money from clients, pay for work-related expenses and set up direct debit payments for your mobile, accounting fees, etc. There are other benefits of opening a business account, and we’ll dive into them briefly.
Benefits of Opening a Business Account
Opening a business account in the UK is a good idea for freelancers and SMEs because this will allow you to manage and track your business and personal finances separately. Personal banks can impose limitations on what you may or may not do with your finances. Forming a company and upgrading to a company account will allow you to have more options to scale your business with time.
In addition, you can save plenty of time while filing and submitting taxes to the HMRC. Keeping track of your taxes efficiently will help you build a credit rating for your business. This, in turn, will allow you to access even better resources, business support, tools, credit, finances, etc.
Lastly, owning a company bank account lends a more professional feel to your business which is essential when building customer rapport.
How to Open a Business Account in the UK as a Non-Resident
It is completely legal to open a UK-based bank account for non-residents. No laws prevent outsiders from company formation in the UK with a bank account. However, non-residents may find the process slightly less straightforward than UK citizens.
Uk’s strict anti-money laundering laws have forced many banks to make it mandatory for business account holders to live in the UK. For this reason, most banks do not accept applications from outsiders. Although some major banks with international presence, such as NatWest or HSBC, are an exception to this, your best shot is with a digital company formation agency, such as wamo.
Mobile banks have only one requirement for non-residents and that is to register their business entity with Companies House. Account holders do not have to physically live in the UK to become eligible.
The Various Types of Bank Accounts You can Open in the UK
Digital providers allow you to open any of the following business accounts.
Startup business accounts: These are accounts for sole traders, and startups. Sometimes these accounts come with a free-period or minimal-payment plan and other support tools.
Business bank accounts for growing businesses: The limits and charges for growing business bank accounts depend on size. These accounts are usually categorized by turnover.
Enterprise, non-profit, and community accounts: These are accounts used by medium or large-sized companies. Various fees and payment plans exist for large-scale, not-for-profit, and community accounts.
Keep in mind that a traditional business bank account is different from a business account that you open with a digital provider. The latter offers many more functionalities besides transfers, cards, and statements. These functionalities include sub-accounts, payments, team management, etc.
What You Need to Open a Business Account with a Digital Bank.
Traders and service providers may open their business accounts using only their details and ID. Businesses that are registered legal entities will have to submit the following
- Registration name and number
- Memorandum and articles of association
- Shareholder structure
- Proof of identity
Directors are typically required to submit their identity documents in person physically. UBOs, shareholders, and other directors can submit a scan or a clear image.
How Long Does it Take to Open a Business Bank Account?
Usually, it can take anywhere between 4 weeks to 3 months to open your business bank account from outside of the UK. If you’re using the Current Account Switch Service, you can open it in less than 7 days.
However, if you’re using a digital provider, it can take even less than that. Digital providers, like wamo, make it extremely easy to register a company and open a business account. In order to open a wamo account you’ll need to enter basic personal and business information and provide the typical business documents required by every provider. There’s no additional unnecessary paperwork to worry about. Initial registration can take as little as 10 minutes.
Business Account and Company Formation Costs in the UK
Simply forming your company by registering at Companies House and opening your business account is free of cost but once your company is up and running, you must sign up for a monthly payment plan with your provider.
It is essential to compare the payment plans offered by your provider for different types of business bank accounts before opting for one.
wamo- A Faster, Smarter, and Friendlier Tool for Forming a Company and Opening a Business Account, in one!
wamo is more than a regular bank. It is a FinTech platform that allows all the e-payment services of a traditional business bank account and more. It conveniently allows registration of a UK company with the Companies House for only £99. They make it extremely quick, easy, and safe for account holders to send and receive payments directly in their business accounts. There are additional benefits to opening a business bank account with wamo. For example, you can set up future or recurring payments, conduct your business anywhere with SEPA and SWIFT options and open multiple sub-accounts. You can also request several cards for your employees and set limits on them. This is a great way to manage business finances. wamo allows users to track spending in real-time and have complete access to all of the expenditures and transactions made. Account holders can also allocate separate accounts by currency, employee or projects, put money aside for future costs, and get reports and analytics for each account. Finally, with wamo, businesses can issue physical or virtual cards and link them to a sub-account or visa-debit card if needed.
A Final Word
Setting up a company and business account in the UK has never been easier, thanks to company formation services in the UK offered by digital providers, like wamo, for non-residents. However, it is important that outsiders are both aware of and abide by UK’s business management and taxation laws to successfully operate within the UK regardless of where they are based globally.
To get started with registering a company in the UK with Companies House, download wamo from Google Play or the App Store. Applying for a company and a business bank account is done together and is fast and straightforward. It’s possible to be up and running with a UK business and business account within 3 days.
