It seems so simple: move to the Land of the Free and the Home of the Brave, start a business, and open a bank account.
Except, as it turns out, it’s not so simple at all. Despite the ease withoh which American citizens can open multiple accounts, foreigners have a different experience. What takes a minute for Americans can take weeks—even months, or years—and still never come to fruition. So we are asking the question:
Can a non-citizen open a bank account in the U.S.?
The short answer is “yes”. But it is difficult—and getting more difficult as time goes on.
Why is it so hard?
Opening a bank account offers security and helps individuals build a stronger credit score. Similarly, having a bank account allows us to conduct business, get paid, and pay others. Unfortunately, restrictive algorithms mean we are unable to enjoy a seamless account setup on U.S. soil.
Firstly, foreigners, non-residents, expats and travelers can absolutely open a bank account in the U.S.—it’s just really complicated. Under the Civil Rights Act of 1964, traditional lending institutions can contract with non-resident persons. Banks—which operate as independent businesses or part of a corporate chain—are entitled to make their own decision on these matters. Since many banks believe that offering bank accounts to foreigners is a high-risk practice, they either don’t offer the service, or avoid it wherever possible.
Secondly, after 9/11 changed the international landscape forever, the Patriot Act set strict rules for foreigners opening bank accounts, or entering into financial transactions in the U.S. The regulations were set up to help stamp out money laundering, tax evasion, and the funding of terrorism. One of these regulations is the verification of our identity. Because many countries don’t offer our high level of ID verification, these countries are deemed unsafe.
Finally, U.S. laws require that all account holders have a U.S. postal address, or an ITIN number.
With so much going on, it’s no wonder opening a bank account in the U.S. is almost impossible.
So who needs a U.S. bank account, anyway?
For starters, anybody who operates a business in the United States of America. Small to medium-sized businesses are already thriving, but may struggle to expand if they have to rely on international transfers.
Any individual who offers a product or service—whether as a freelancer or as a larger corporation—can appeal more to a U.S. audience by using local payment methods, supported by ACH transfers.
International students are another part of the core demographic of people needing to have a U.S. bank account. To streamline tasks like family travel, homework, and socializing with friends, a locally based bank account can work wonders. Frequent visitors to the United States, tourists, and those on short-term work visas can all benefit from an American bank account.
Finally, online shoppers can benefit in a big way. Many online stores will only accept U.S. banking options. To avoid extra fees and breakdowns in the way currency is exchanged, a U.S. bank account could be the pivot-point in your online shopping experience.
How do I open a U.S. bank account?
There are several effective methods when it comes to opening a U.S. bank account. Each method has its benefits and drawbacks, which we’ll explore here.
1. Set up your bank account online.
This is by far the least efficient solution, as it involves a long processing time and doesn’t necessarily translate to success. If you don’t have sufficient ID, for example, your online application is likely to be declined.
Although each bank has its own set of qualifying conditions, one common factor to all is that you have an ITIN. The Individual Taxpayer Identification Number, in conjunction with other photo ID, will increase your chances of successfully opening a bank account.
2. Go to an international bank.
Not in the States yet? Head to your local branch and submit an application to open a new account. By verifying your identification and data in your home country, you may smooth the path to creating a U.S. bank account later.
Executives often use this method to open accounts in the United States prior to travelling there. It tends to be a successful option, although many believe visiting a U.S. bank in person is the best way to achieve our goal.
3. Travel to the U.S.
The third—and most common—option for opening a U.S. bank account is actually being there. It is easier than most methods, and virtually guaranteed to be approved at this stage. Certain banks can push through this application quickly, and painlessly, especially those like Wells Fargo and Citibank, who have a robust foreign policy.
What do I need to open a U.S. bank account?
Security measures across the United States are stringent. Some banks, no matter how progressive they seem, may even require a full background check in order to approve your account application.
You’ll need to come prepared, with:
- Two forms of photo ID. Your passport & driver’s licence should be effective.
- Immigration documents. These are used to establish the length of time you are likely to remain in the United States.
- Employer Identification Number (EIN). This number is assigned to each foreign business by the IRS.
- An initial deposit amount: A minimum deposit is required across most banks. The deposit amount might be $10, or it could reach as high as $100.
- A U.S. postal address. Not having a permanent address in the United States is likely to be your biggest problem. Banks insist—and rightly so—on you providing proof of residency and identity, in order to offer a stable guest environment.
While we can’t offer a solution to every piece of the bank account puzzle, we can help you secure a virtual street address. You’ll gain a street address and virtual mailbox immediately, and any mail will be sorted to a secure mail facility.
The laws that govern bank accounts for foreigners are federal, although they are applied locally. Be sure to check the various document requirements and processes, and try to stay patient as you work to secure your U.S. bank account.
Ready to get your new U.S. street address right now? Click here to take control of your virtual U.S. mailbox from anywhere in the world.