Opening a USD-denominated bank account for a EU-based company

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#1

My company is incorporated in Spain. The company’s bank account is in Spanish. But most of my income comes from two monthly payments from US firms that act as resellers. These payments are denominated in US dollars.

My resellers’ US banks seem to transfer money to my Euro-denominated account at poor exchange rates. Between 2% and 7% below the actual exchange rate.

Is it easy for me to open a US bank account (or at least, a USD-denominated bank account), as a non-US citizen, living in Spain? If I can do this:

  • I can transfer the money via a company such as TransferWise at a better rate.
  • I could also use my Interactive Brokers account; it is complicated but the rate is within a smidgen of the prevailing interbank rate.
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#2

Guess you already know but the rate you see quoted on x-rates / google etc is the inter-bank rate and you won’t get that - typically its 2 or 2.5% off for ‘retail’ currency exchanges. So you may not be loosing quite as much as you think so keep this in mind to figure out if its worth the hassle.

Its pretty easy to open a USD denominated account with most business banks.e.g. you could have an account with Santander (Spanish bank for the rest of us) in EUR and one in USD. But it likely won’t be a free ‘small business’ account so you will have to pay some monthly fee.

Side point - if you’ve ever had to wait 2-3 months for a ‘foreign’ cheque to clear or faced confusion when a US company tries to wire to a non US Bank (ACH numbers used in US, IBAN in rest of world) this won’t help as even though an account is denominated in USD its still not a ‘US account’

Have interest in also doing this so let me know how you get on!

#3

In addition, the bank may refuse to do so unless you have a very good reason. I tried to open one, but they took so long, I just backed out. Be prepared to jump thru a lot of hoops.

#4

Interesting - my bank rep told me it wasn’t hard but didn’t actually go through with it so don’t know. Which bank you use?

#5

I enquired about this ages ago and was told by HSBC that I would have to pay about £10 per month for an additional USD account. It didn’t seem worth it for the occasional USD cheque I have to cash.

I have since left HSBC as their business banking service was shockingly poor.

#6

I asked my bank (RBS) about a dollar account a while back and it was insanely expensive. Every transaction would incur a fee £1 for a transaction less than £70 (I think) and £7 for greater than that. Back at the time, this was before Stripe offered weekly grouping of payments, so it would have been a really large cut from my sales.

So watch out for fees such as transaction costs as well as a poor exchange rate.

@Andy - Without wanting to hijack the thread, who do you recommend for business banking (if anyone!).

#7

HSBC were terrible.

Santander (who I am with now, after they bought Alliance & Leceister) are not great.

I asked on Twitter if anyone could recommend a UK business bank, but no-one had a good word to say for their bank.

#8

Tell your reseller to pay you in dollars, and NOT to convert to Euro on their end. Your local bank in Spain will usually give a much better exchange rate when converting into their local currency than a US bank will when buying.

Why? Because you’re their customer, whereas with the US bank, their customer is not receiving the money, so there’s no incentive to offer low exchange rates.

The flip side also applies. When you’re sending money overseas, the recipient will usually get a much better rate if you send in Euro, and any conversion occurs on their end.

#9

I had a look into this about a year ago. I was receiving USD into a GBP-denominated UK account at the time.
My business bank offered USD-denominated accounts but wouldn’t offer them to me, because… well, for no good reason. They just wouldn’t. But your bank might be different, so I’d ask them first. They might be able to do it. Even it it costs more you could then presumably use TransferWise to transfer from your USD account to your EUR account.

I then looked at actually opening an account in the United States. There’s not a lot of good information but there doesn’t seem to be anything preventing someone in the US walking into a bank and opening a bank account. You don’t have to be a US citizen to have an account with a US bank. You’ll need a passport and a local address, and you have to do it in person. I couldn’t find anywhere that does it online. So, if you’re visiting the US in the near future that might be worth investigating. The specific bank branch may or may not play ball - you’d be better of doing it in a larger city than a small town somewhere.

#10

Most European banks offer foreign currency accounts on their own. I’ve got a few accounts in different EU countries and most of them have the option to open free USD, GBP and CHF accounts additionally to the EUR account.

I think that would be far less trouble than opening a USD account in the US as a foreign entity.

#11

The currency accounts you get with HSBC - not sure about other banks - do allow you to maintain a balance in that currency however to withdraw the money you have to transfer to GBP. You don’t get any way to go to a cash machine in another country and directly withdraw that money, nor do you have any way to pay for things with them directly (you still incur a hefty charge).

So they are useful as a currency “bucket” but not a lot else.

#12

The currency accounts in Barclays UK are working for us like this:

  • They are free (for the time being) and you can open a bunch of them (USD, EUR, etc.)
  • You can receive transfers in the denominated currency without any fees.
  • You can transfer out money but there will be a £17 fee, meaning it’s useless unless you have accumulated enough for the FX rate that a specialist gives you (e.g. HiFX) offsets that fee.
  • In particular, the USD account (as far as I understand it) is not a “checking” account in the US sense (it won’t have a valid Federal Reserve routing number, and won’t be accepted for things like allowing Paypal or Stripe to transfer USD into it). It seems to be set up as a US “savings” account, which makes it useless from the point of view of a merchant account.
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Opening US account from UK
#13

I’m not sure of the eligibility requirements, but I know through HSBC Premier you can open foreign accounts where you’d have a local debit card, local online banking login, etc. You can then access all accounts through a global view.

#14

You can try ordering Payoneer bank card, it comes with a US bank account.