6 Tips for a Successful Bank Account Opening Application

6 Tips for a Successful Bank Account Opening Application 

In our previous Article Opening a Bank Account in Cyprus we have explained the procedure and the documentation needed to open a bank account in Cyprus, below we are providing 6 tips to make the procedure easier and to avoid common mistakes.

Increase your chances of a successful bank account application 

Let's be honest. Opening a bank account in Cyprus like any other European country is becoming extremely difficult, however, with the right guidance from your service providers, everything is possible. In this short article, we illustrate what the bank is looking for so that you increase your chances to open a Cyprus bank account. 

1. You, the owner of the account. Who are you and what you do for a living 

Besides the obvious review of the information provided in the application pack about your business and your company or group structure, the bank will want to know who you are and what you have been doing for a living. This is crucial and the number one application rejection reason. 

You cannot include in your application pack that your business is about the trading of healthy products, buying for instance from Italy and Greece premium olives, olive oils and similar products selling them to 3rd countries whilst your profession is in IT without any previous experience in the trade of premium products or any trade at all.  

This will also become obvious when the banks will be comparing your CV with the online research and your application pack. 

2.  Experience with the business introducer (accounting firm or the law firm) 

Like most cases, it is who you know and how well your service provider is trusted by the bank that would determine the success of your bank account application. 

3. Does your application stand?  

The bank will visit your suppliers' and clients' websites and will review the contracts (yes you will be asked for those as well) to ascertain the substance, existence, and feasibility. Is your business model proven and likely to be successful? 

Let's not forget that banks are like any other business. They want to make money. The administration cost for keeping a bank account is a significant cost to them, even if the account is not active therefore the banks are reluctant to open bank accounts with low activity.  

Tip - do not declare that your bank account will have low activity, even if this is the case. Make sure that the bank will review your business account as an account with lots of volumes so that it will be making money rather than the minimum bank account maintenance fees or low transaction fees which are in the region of 350 Euro  – 500 Euro per annum. 

4. Incomings and outgoings, but most important, incomings 

Cyprus is a small island and a fully-fledged EU member. Being a small island with corresponding small for the EU sizes local businesses, the banks are not used to seeing millions of incomings and outgoings unless from a reputable, really, big local or international corporation. Think about it. If 90% of the local business bank accounts held have average business transactions in the region of Euro 5,000 – Euro 50,000 and you declare in your bank opening paperwork that your incomings will be on average Euro 250,000 each and the bank has never heard of you, it will potentially immediately classify you a risky client thus making it harder for you to open the bank account. 

Consequently, the minute you declare in your bank application that you will be receiving millions of Euros for your services your application becomes immediately risky and likely to be declined. 

Tip: Try to use realistic incoming numbers from services rendered and once the bank account is open and the relationship is established you can increase the incomings which you can discuss with the bank at any given point, but once the bank account is open. 

5.  Part of a Group --> High-Risk Client (by virtue) 

If you belong to a group, you may have thought that this is a good thing and could increase your success in the bank account opening. Especially because you have group audited financial statements and accountants and lawyers all over the world! 

Wrong. 

Banks classify groups as risky and request extensive due diligence and transaction monitoring continuously, to such an extent that could render the keeping of the bank account a hustle, especially for the Ultimate Beneficial Owners who will have to, on an annual basis, provide KYC information to the bank and have personal electronic communication (via email) with their bankers. This is a key requirement for risk bank account holders; as mentioned above since you belong to a group you immediately become a high-risk client. 

Our Advice: If you have a way to set up a standalone company with physical persons as the 100% shareholders of the applicant company it would make your life much easier than disclosing the entire group structure and having to disclose annual KYC information and group financial reports to your local banks each year!!! 

6. Physically meet your bankers during the application process 

It is a universal rule. Human beings respect and value relationships. Imagine being a bank employee who receives tens of bank account applications per day from service providers who never meet with business owners they also never met.  

It is much easier, at all levels, to decline a bank application than an application from a businessman or woman who has visited the branch, met the bank clerk, and discussed their needs. We see it all the time.  

Having a physical meeting rather than a Video Skype Call certainly increases your chances of a successful bank account setup. We see this all the time, even for applications we are not sure they will get approved, not because of the credentials of the applicants and UBOs but due to the nature of trade or counterparties involved. Nevertheless, a physical meeting could secure your success. 

We have summarized the most important parameters we believe are the most important for you to secure a successful bank account application.  There are other factors involved as each application is different but the above factors Will Significantly Increase Your Chances! 

CYAUSE Audit Services Ltd 

CYAUSE Audit Services Ltd deals with the provision of banking services and bank account opening to its international clients daily. We cooperate with all local and international banks closely and we have deep knowledge of whether your bank account request will be accepted or rejected, before the application for the bank account, during the data collection from you. 

Feel free to enquire with us any specifics with regards to this topic at your convenience at kt@cyprusaccountants.com.cy.