If you’re wondering how to open a bank account in the USA or have already tried and found the process to open a US bank account as a non-resident incredibly challenging, then you’re certainly not alone. Fortunately, things have improved drastically and there are FinTech solutions that have made the process to open a USD bank account significantly easier. In fact, you can now open a bank account in the USA right from the comfort of your home – and that applies whether you’re a business, individual or freelancer.
Despite being the world’s largest economy and a major export market for countries around the world, doing business with the US has been notoriously tricky. Not least because the process to open a USD bank account in the USA with the likes of Citi, Chase or Bank of America is nigh on impossible.
In this article we use examples to explain how to open a US bank account from the UK, though the same process will apply to many countries around the world. It’s just a case of getting familiar with the FinTech providers that accept clients in the country you operate. The same can apply to businesses and individuals from Europe, Australia, and those looking to open a US bank account from Canada.
Increased Demand from Businesses to Open a US Bank Account From UK
According to data from the Office for National Statistics, the US is, on a per-country basis, the UK’s largest export market for goods and services, accounting for 18.9% of total UK exports in the year ending Q1, 2019. Here we look at the types of businesses who might want to open a US bank account from UK:
Ecommerce sellers who utilise marketplaces such as Amazon, Ebay and NewEgg can begin selling in new territories with relative ease. If they are testing the US as a new market, they don’t want to be jumping through hoops to open a USD bank account. Nor do they want to be using the Amazon Global Seller program or PayPal. With fees of 4%+ this can have a huge impact on profit margins. These FinTech solutions for digital bank accounts allow users to open a bank account in the USA which is local – meaning domestic USD transactions can be made. And if FX is required to convert funds back to a seller’s base currency, a 0.5% fee is applied – significantly cheaper than Amazon and PayPal.
Medical & Pharmaceutical Companies
Medical companies will often have to go through a long and rigorous process to receive FDA approval. In this time, sellers may even start to receive demand for their product from the US. Once FDA approval is granted they don’t want to be wasting further time having to incorporate a business in the US in order to open a USD bank account. A multi-currency digital bank account is the best place to start.
Agricultural Producers / Food & Drink Companies
UK exports of agricultural products to the US totaled $806 million in 2019 and we know that following Brexit, this is an area the UK wants to boost even further. Leading categories include; snack foods ($126 million), cheese ($60 million), wine & beer ($52 million), red meats, fresh, chilled, or frozen ($46 million). As more agricultural produce starts being shipped to the US the more demand there is going to be for efficient payment solutions.
Benefits for Businesses who Open a USD Bank Account
If your business is selling into the US, the major benefits to opening a USD bank account are time and money. Here we explain these in detail.
Operational Efficiency / Increased Competitiveness
Once you are selling into the US, your contract or invoice with a US buyer will specify the terms for payment. When agreeing terms, having a USD account held in the US can be a major advantage. Firstly, it gives sellers the ability to invoice in US dollars, which naturally increases competitiveness, but secondly, it even allows buyers to make a local transfer to your account for payment. You’re doing business like a local.
Convert Funds When it Suits You
Not only does a USD account provide more convenient payment solutions to buyers, it also provides sellers with the flexibility to make a decision as to when they want to convert funds back to their base currency. Meaning sellers can make the most of when exchange rates are in their favour.
Save on Fees / Avoid Unnecessary FX
Perhaps as a seller there are certain liabilities in the US that you have to pay for yourself – rather than converting funds back to GBP everytime you make a sale, it might be worth running a balance in USD and creating a natural hedge so you’ve already got funds in account as and when USD expenses arise.
Is it Possible to Open a US Bank Account as a Non Resident?
If you’re talking about a fully fledged current account, provided by the likes of Bank of America or Citibank, then the short answer is no. These banks will absolutely not provide a US-based USD account for individuals who are from outside of the US. Even multinational corporations who have a long established relationship with the likes of Barclays will find the process of opening a bank account with their US division much more complicated than adding a USD bank account to their existing setup in the UK.
One alternative which is often suggested in order to become eligible for a “big bank” USA bank account is to incorporate in the U.S. You can as a foreign entity incorporate in the USA and then become eligible for a bank account.
“Virtual” USA Bank Account to Receive Payments
For non-residents (including those who might even soon be emigrating to the US for work) opening a current account with a major US bank has long proved a nightmare and in this regard there is no best US bank for non residents. Without a US address you simply haven’t been able to register for a US bank account – until now. Products, such as the Wise borderless account or the OFX Global account (known as multi-currency accounts) now make it possible for individuals and businesses to open currency accounts with ease. These accounts can still be in your name and work just like a normal transaction account, with the only exception being that standing orders or direct debits (referred to as ACH debits in the US) cannot be set up. Payments in and payments out can be made with ease though, and with the case of Wise, a debit card is even issued and can be used anywhere mastercard/visa is accepted (just like with a debit card for a GBP account).
Functionality is more than enough to get started and individuals can always open a fully-fledged current account upon arriving into the US. Many choose not to however as they are getting on absolutely fine with their digital currency accounts.
With OFX or Wise, clients can register for a multi-currency account from any of the territories in which they offer their services. As experts in international payments, they often have a much wider global footprint than most domestic focused US banks do. Individuals and businesses alike from Australia, New Zealand, Canada, Europe and many more countries can open a USD bank account (held in the USA) through OFX or Wise.
View our best USD currency accounts in the UK below.
Declaring a U.S Bank Account to HMRC
Please note that you need to declare any foreign bank account to HMRC, otherwise the process will be unlawful and you can get criminally prosecuted for it.
A Note on Freelancers…
Just as with individuals, non resident freelancers can open a bank account in the USA with a FinTech too. A freelancer may never be planning on moving to the US but by having a USD account they are allowing clients to pay them in the world’s most popular, and least volatile currency. And if clients are actually based out of the US, then it’s an added bonus they can make a local transfer to your USD account too.
How to Open a Bank Account in USA
If you or your business needs to open a dollar account in the UK then you should know the process is much more straightforward if you use a FinTech or international money transfer firm listed on this page instead of applying with US retail banks such as Citi. The steps involved are simply:
- Choose the provider you wish to open a USD account with from our selection above.
- Start your account application online (this shouldn’t take any longer than 10 minutes).
- Complete the registration by uploading personal documents to verify your account for compliance purposes. Security and safety of client money is just as paramount with a FinTech. The same compliance protocols apply, these companies just value their clients and provide much more convenience and speed in overcoming the early compliance hurdles.
- Activate your USD account in the UK, as well as any other currency accounts you require. Once you’ve generated your USD account you will receive complete USD bank account details – including wire number, routing number and account number.
- Upload funds to start making local USD payments today / include your unique account number on future invoices to start receiving payments into the account.
Final Word – Is It Worth Opening a Bank Account in the USA?
If you are an individual set to move to the states, a freelancer who bills in USD, or a business that is looking to conduct business with the US, then there is certainly enough merit for you to open a bank account in USA. Particularly now that the process to open a USD bank account has become significantly easier with the FinTechs listed on this page. Individuals will no longer find themselves stuck upon arrival into America with only the cash they have to hand. Businesses will certainly enjoy the benefits of having a local USD account too. By opening a bank account in the USA, doing business not only becomes easier, it becomes significantly cheaper.
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