Opening an account abroad for high-risk business in 2023

International banking services are available to all companies, regardless of their commercial activities, including those considered high-risk businesses. However, opening an overseas account is much more challenging for companies that work in high-risk market sectors. Difficulties occur at every step, from choosing a banking institution to undergoing stringent compliance controls. Even after successfully obtaining the coveted foreign account, it is crucial to maintain its active status. In this article, you will learn the opportunities existing for high-risk companies that require an overseas account in 2023.

Which areas of business are considered high-risk?

The online business sector is constantly growing, and the events connected with the pandemic further encouraged many entrepreneurs to expand the geography of their operations. However, in practice, entering the international market is challenging. More precisely, it is not easy to establish business relationships with financial institutions.

For example, there is a business structure engaged in telemarketing. It urgently needs an overseas account. The owner gathers all the necessary documentation and fills everything out correctly. And still, the bank refuses to provide services due to categorizing the company’s activities as high-risk. At this stage, further progress becomes impossible.

In the banking world, there is the concept of high-risk business. This type of activity is more susceptible to risks such as fraud, payment reversals, or conducting suspicious transactions.

High-risk sectors:

• Currency market operations;
• Adult entertainment;
• Online auctions;
• Multi-level marketing;
• Forex;
• Dating websites;
• Selling vitamins and dietary supplements;
• Online games;
• Online casinos;
• Brokerage, intermediary activities;
• Operations related to cryptocurrency.

Companies can be engaged in various businesses, and there are no universal offerings for financial services abroad and no specific choice of a bank to work with. All foreign banks are different, and it is important to understand in advance with whom they are willing to cooperate and with whom they categorically are not. Do not waste your time searching for a universal solution. Contact us to request a consultation during which we can help you choose a foreign bank account that best suits your goals and preferences.

Why high-risk businesses get special treatment from foreign banks

Why do foreign banks have a negative attitude towards high-risk companies? Let us take commercial activity related to the gambling industry as an example. Several factors contribute to the fact that gambling is classified as a high-risk business:

• Chargeback disputes;
• Resolution of complex legal issues;
• An international customer base;
• Risk of gambling addiction (due to which gambling is illegal in many countries);
• Potential for running money laundering schemes.

Any successful online business generates a sizable turnover in US dollars and other currencies. Naturally, it is vulnerable to fraudulent transactions from clients and from the company itself.

Suspicious transactions such as chargebacks may raise a number of questions for a banking institution. And it will be fair. After all, such transactions can lead to fines from regulatory authorities.

Naturally, no foreign bank wants to risk its license, reputation, and customer trust while conducting financial activities. Therefore, opening an account abroad for a high-risk company is not impossible. However, it is quite challenging to do it yourself.

Where can you open an account abroad for representatives of high-risk businesses?

Above, we have already described the activities of companies classified as high-risk businesses. The tightening of international financial monitoring rules and the development of KYC/AML procedures have resulted in high requirements imposed on clients, which are often next to impossible to meet. Consequently, banks refuse to provide services to these companies.

The question arises: where can companies with a high level of risk open an account abroad? It is possible to obtain such an account through a payment system, a non-bank financial organization, or a specialized foreign bank that works with such companies. However, there is also a risk. The market for banking services is highly competitive, and various financial structures prefer to focus on their specific target audience. Therefore, there is always a risk that without experience in collaboration, one might make the gravest mistake – opening an account in an unreliable foreign bank.

What are the guarantees when opening an account abroad for a high-risk business?

It is impossible to give a 100% guarantee that a bank will open an account for a non-resident business. Before this happens, the bank must conduct an inspection check to ensure the client company complies with various criteria, risk parameters, KYC, and AML procedures. Only the  foreign bank decides whether or not to open an account for the company in question. That is why expert support when opening an account abroad is crucial. With our help, you will be confident that all KYC, AML, and compliance procedures are executed correctly.

Our services for opening bank accounts

For over ten years, our team of specialists has assisted businesses from several dozen countries in entering the international market. Our extensive database of banking and non-banking institutions allows us to select a bank based on specific requirements and best suited to the client’s circumstances. We work with reliable licensed banks, non-banking organizations, and payment systems. If you would like to know more about the options for opening accounts abroad for high-risk companies available in 2023, contact us via any convenient communication channels.