How to Open a Bank Account Abroad

Ever fancied stashing away your funds in far-flung corners of the globe or being able to effortlessly manage international transactions? Opening a bank account abroad might just be the key to unlocking those dreams! You just need to go about it the right way.

Here’s a summary of the steps involved in opening a bank account abroad:

1. Find out if you qualify to open a bank account in the target country.
2. Identify your banking needs.
3. Decide the type of bank account you need. 
4. Choose who to bank with.
5. Get your paperwork ready.
6. Fill out application forms.
7. Wait for approval.
8. Activate your account.

Let’s take a closer look at these steps to make sure you get every single one of them right. 

Table of Contents

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1. Find Out If You Qualify to Open a Bank Account in The Target Country

Just to be clear “target country” in this context refers to the foreign nation where you want to set up your bank account. I’ll be using it as shorthand for “the foreign country where you’re looking to open a bank account” in the rest of this article, so keep that in mind moving forward.

Crystal clear? Perfect! Let’s carry on.

Most countries don’t let just anyone open a bank account, especially if they’re foreigners. So before you begin worrying about the specifics of opening an overseas bank account, you’ll want to make a genuine effort to find out if you qualify for one in the first place.

Different countries use different criteria to determine who gets to open a bank account. Most of the time, it boils down to stuff like:

Your Citizenship/Residency Status

Most countries allow non-residents and non-citizens to open bank accounts, so that will likely not be an issue. What might be, however, are the extra hoops you might have to jump through before they allow you to open your account.

Generally, those hoops will be in the form of:

• Extra paperwork. Foreigners often need to provide more extensive documentation to open a bank account, such as a valid passport, visa, proof of address, and sometimes additional identification or residency documents.
• Higher minimum deposits. Some banks may impose higher minimum deposit requirements for non-resident and non-citizen accounts to mitigate the risks associated with foreign customers.
• Fewer perks. Non-citizens, especially non-residents, might have access to fewer services and features compared to residents. Banking products or services like certain types of loans or credit products are often not available to non-residents. And when they are, they tend to come with more hoops to jump through.
• Additional fees. Banks incur extra administrative and compliance costs when they serve foreign customers. That money has to be recovered somehow, and they often do that by slapping higher fees on accounts held by non-citizens and non-residents.

• Tax compliance requirements. Foreigners may be subject to additional tax compliance requirements, such as providing tax identification numbers from their home countries or reporting foreign financial accounts to tax authorities.

• Extra due diligence procedures. Banks often conduct more rigorous due diligence procedures to verify foreign customers’ identity and source of funds. It’s one of the many things they have to do to comply with anti-money laundering and counter-terrorism financing regulations.

Your Visa

If you live in the target country, you’re likely doing that on some type of visa. By the way, visas come in different types, and they’re not the same as work permits. If you’re interested in that discussion, check out this guide.

Circling back to our discussion…

Whether you’ll need a visa to open an offshore bank account will depend on whether you reside in the target country. Now, if you know a thing or two about international travel, you’re probably wondering, “Don’t people typically need a visa to reside in a foreign country, in which case what you’ve just said wouldn’t make sense?”

Well, yeah, but that’s not always the case. 

You see, many countries offer visa exemptions or visa-free entry for short-term stays, primarily for tourism or business purposes. These arrangements allow travelers from specific countries to enter and stay within the destination country for a limited period without needing to obtain a visa in advance.

For instance, within the Schengen Area in Europe, which includes countries like France, Germany, Italy, and Spain, travelers from certain countries are permitted visa-free entry for up to 90 days within any 180-day period. This means that individuals from these countries can visit Schengen Area countries for tourism or business without obtaining a visa beforehand, provided their stay does not exceed the allowed duration.

Where am I going with all this?

Let me land: If you reside in the target country without a visa, there’s a pretty good chance banks won’t let you open a bank account. Why? Because your stay will be short-term (otherwise, you would have a visa or residency permit), and that’s problematic for banks.

Banks typically require individuals to have legal permission to reside in the country to open an account. Enforcing this requirement is one of the many things they have to do to comply with Know Your Customer (KYC) and anti-money laundering (AML) regulations.

Without a valid visa or residency permit, it’s difficult for banks to verify your identity and ensure you’re legally allowed to conduct financial transactions within the country. So while visa exemptions or short-term stays might work for tourism or short business trips, they often don’t suffice for setting up a long-term financial relationship with a bank.

What if you don’t reside in the target country?

In that case, whether you’ll need a visa to open an offshore bank account will boil down to two factors: 

• The bank’s policies
• The target country’s regulations.

Some offshore banks might ask for a visa or residency permit, even if you’re not living in the country where the bank is located. This usually happens when the target country has strict Know Your Customer (KYC) and anti-money laundering (AML) requirements.

Other offshore banks might let you open an account even if you’re not a resident or don’t have a visa. Nine times out of ten, this applies to citizens of certain countries and people who meet other eligibility criteria specified by the bank. Banks that allow this typically rely on alternative forms of identification and documentation to verify the identity and legal status of their customers.

Documentation

Foreigners typically face more extensive documentation requirements (compared to citizens) when opening bank accounts abroad. This isn’t a discriminatory ploy; it has more to do with the regulatory compliance, identification verification, and risk assessment procedures that all financial institutions must adhere to.

So before you even think about opening a bank account abroad, do your homework and find out what paperwork banks in that country might ask for.

How do you find that info?

Here’s a neat trick: Check the websites of the top banks in the target country. Why the top dogs? Because they typically set the pace for industry practices, including documentation requirements. That means looking at their websites will give you an accurate idea of what other banks in that country might demand paperwork-wise. Pretty crafty, huh?

Online forums and communities catering to expats, jetsetters, or individuals living abroad can also come in handy. I mean, what better way to learn about an experience than asking someone who’s actually lived it? The best part is that members of these communities are usually generous with information. And if you’re lucky, you might even stumble upon someone who has an account with the specific foreign bank you’re eyeing.

2. Identify Your Banking Needs

This step is all about making sure your overseas bank account serves you well. Banks offer different types of accounts, each designed to suit specific financial needs and goals.

So before you start contemplating who to bank with, have a deep think about your banking needs and clearly outline them. This will help you choose the right bank account type, which will then set you up nicely to choose the right bank foreign banking partner.

Need help identifying your banking needs?

Here’s what to consider:

Your Financial Goals

Start by identifying your financial goals. Are you looking to save for a specific milestone, such as buying a home or traveling? Or are you seeking a convenient way to manage your day-to-day expenses while living abroad? 

Whatever your goals are, identify them and jot them down. That alone should point you in the general direction of what bank account types would serve you best. 

Your Banking Habits

Take a close look at your past banking habits and preferences. Do you prefer to bank online, through a mobile app, or in person at a branch? How frequently do you make transactions? And what type of transactions are they – international or domestic? 

Considering your banking habits will help you further zero in on the right type of banking services.

Your Currency Needs

This will only be an important consideration if you frequently deal with multiple currencies or expect to get paid in a foreign currency. If that’s the case, you might be better off with a multicurrency or foreign currency account.

These accounts allow you to hold and transact in different currencies, helping you avoid currency conversion fees and minimize the risk that comes with exchange rate fluctuations.

Accessibility

How important is accessibility to you? For most people, it’s not just a “nice-to-have” — it’s a necessity. Being able to access funds quickly, make seamless transactions, and stay on top of your account activity can make a world of difference in how you manage your finances and plan for the future. 

So how do you make sure your foreign bank account is accessible enough?

Simple: Evaluate the availability of your banking partner’s services against your banking habits. If you prefer in-person banking, you’ll want to go with a bank that operates round the clock, preferably with ATMs conveniently located close to your residence.

If you do most of your banking remotely, you’ll be better off prioritizing banks with robust online and mobile banking services. The key word here is robust because online and mobile banking services vary across banks — some banks invest more than others in these services than others and it shows.

So what exactly should you be on the lookout for when sizing up a bank’s online and mobile offerings? 

Here’s the lowdown:

• User-friendly interface. Look for an online and mobile banking setup that’s intuitive and easy on the eyes. Bonus points if it comes with customizable features so you can make it feel like home.
• Full-service functionality. We’re talking about more than just checking your balance here. Your ideal banking app should let you do everything from transferring funds between accounts to paying bills and even setting up automatic savings goals. The more you can do without having to switch apps or hop on a computer, the better.
• Speedy transactions. Patience may be a virtue, nobody’s got time to twiddle their thumbs while their money takes a leisurely stroll from Point A to Point B. So make sure your chosen bank’s online and mobile services provide near-instant transactions and access to account information.
• Slick mobile app: Let’s be real—your phone is basically an extension of your arm at this point. So why not make sure your bank’s mobile app is as sleek and shiny as your latest gadget? It should be fast, responsive, and packed with features that make managing your money on the go a breeze.
• Integration with other financial tools. Some banks integrate their mobile and online banking platforms with other financial management tools like budgeting apps and investment platforms. For account holders, this means simpler and more convenient budgeting, expense tracking, and investment management.

3. Decide The Type of Account You Need

Ultimately, this decision will come down to your banking needs. We’ve already talked about those, so all you need to do is go ahead and choose based on your financial goals, banking habits, and any other individual-specific considerations you might have. 

Be sure to think of taxes too, especially if you’re looking to open a retirement or investment account. These two, in particular, carry various tax implications you need to be aware of when choosing where to stash your money. Don’t shy away from consulting a tax professional if things get murky. 

4. Choose Who to Bank With

So far, most of what you’ve been doing is the not-so-fun but super-important groundwork– checking your eligibility, choosing the right type of bank account, and figuring out what you need from your offshore banking setup. Now comes the fun part: picking who you’ll be banking with. 

This decision is about much more than finding a safe place to stash your cash. You just can’t pick the most popular bank in the target country, either. Sure, safety and reputation matter, but you need to think beyond these two factors to pick the perfect banking partner.

Here’s what else you need to consider:

Accessibility and Convenience.

Do you need a bank that offers seamless online and mobile banking services? What about the ease of accessing ATMs in your area or while traveling? Prioritize convenience and accessibility that align with your lifestyle.

International Banking Capabilities

If you’re an expat or frequently carry out cross-border transactions, prioritize banks with strong international capabilities. Look for features like multi-currency accounts, low-cost international transfers, and favorable exchange rates. Your needs call for a bank that makes it easy and affordable to manage your finances across borders.

Customer Service

Pretty much everyone finds themselves hitting up customer service at some point to sort out bank account drama. Now Imagine doing that in a foreign country, possibly with language barriers and cultural differences teaming up to add a sprinkle of complexity to proceedings. Pretty gnarly, right? That’s why you need to opt for a bank with a responsive, understanding, and multilingual customer service team.

Fees

Nobody likes surprises, especially when they come in the form of hidden fees and exorbitant charges. So take a close look at the fee structure of potential banks, including account maintenance fees, ATM fees, foreign transaction fees, and overdraft charges. Compare their charges and choose the bank with the most transparent and reasonable fee structure — your hard-earned cash deserves protection.

Local Knowledge and Expertise

Consider banking with institutions that have a deep understanding of the local market — bonus points if they cater specifically to expats or international clients. Such banks often offer services tailored specifically for international account holders, as well as language support and insights into local regulations and financial practices.

Tech Savvy Solutions

I think it’s safe to say that we’ve reached a point where innovative banking solutions aren’t just a cool extra; they’re expected. Features like mobile check deposits, budgeting tools, and extra-secure biometric logins are making a world of difference in banking convenience, and you have every right to spring for a bank with those offerings if your banking needs call for that.

Stability

You wouldn’t hitch your wagon to a sinking ship, would you? Yet, that’s what you’d be doing if you chose your bank without checking for signs of stability.

What signs?

A healthy balance sheet is usually a massive green flag, but you can always go the extra mile and check for things like solid credit ratings from reputable agencies, a clear strategic vision, and a proven track record of weathering economic storms with resilience.

Regulatory Compliance

Regulatory compliance often reflects a bank’s overall financial health and stability (which as we just saw, is a super important consideration when choosing a banking partner). It also demonstrates a bank’s commitment to protecting your financial information. 

But you probably know that already. What you might not know, however, is that regulatory compliance measures also protect your interests and money. One of the many ways they do that is through deposit insurance schemes. These schemes are implemented by regulatory authorities, and they exist to protect a certain portion of customer’s deposits in the event of bank failure.

5.  Get Your Paperwork Ready

This should be relatively easy to do. All you need to do is get in touch with the bank you selected in step 4 above, explain to them your banking needs and the type of account you’re looking to open, and ask them what paperwork they’ll need. 

You can also find that info on their website, but getting the details from the horse’s mouth is a far better way to go about it because it allows you to clarify any specific requirements or questions you may have directly with a representative. Plus, banks often update their paperwork requirements, and sometimes those changes may take a while to reflect on their website. 

Once you’re clear on what documents will be needed, all that’s left is to organize them neatly in preparation for the actual account opening.

6. Fill Out Application Forms

The way you go about this will depend on your bank’s policies. Some banks may allow you to fill out the forms remotely, while others might require you to visit one of their branches in person. If you’re a foreigner, chances are you’ll need to show up. Whatever the case, make sure you provide accurate information.

7. Wait For Approval 

This isn’t necessarily a “step” on your part because you won’t have to do anything, but it never hurts to know what to expect after you’ve filled out and submitted all the necessary paperwork.

So what exactly should you expect? More importantly, how long will you have to get your application for a bank account approved?

The bank will review your application by running several checks — including background and credit checks — to assess your eligibility and suitability for the account. 

As for how long it’ll take to get your application approved, it can vary depending on the bank’s internal processes, the type of account you’re applying for, and any additional verification or documentation requirements. In many cases, you can expect to receive a decision on your application within a few business days.

8. Activate Your Account

If your application gets the green light, the bank will shoot over your account number and other important details. They’ll also throw in instructions on how to activate your account. Usually, that means making an initial deposit, setting up online banking if that’s your thing, or swinging by a branch to wrap things up.

Once all that’s sorted, you’re good to go! Your account is officially up and running, and you can start tossing in cash, making withdrawals, or doing whatever else you need to do. Just make sure to follow the bank’s instructions carefully to avoid any hiccups along the way. 

And hey, if you hit a snag or have any questions, don’t hesitate to drop a line to their customer service crew. They’re there to help you out.