Ever wondered why banks reject so many business account applications?
Many business account applications fail because the bank cannot see real economic substance. This video explains what banks look for and how operations, documentation and ownership need to support the story presented during onboarding.
Transcript excerpt
We often get asked, "What is economic substance and why does it matter?" When we work with our clients to open bank accounts, we really recognize that economic substance has a large part to play in whether the bank wants to accept them or reject them. The bank looks at your business and if it can't see any economic substance, it doesn't see a clear point of business and it doesn't understand exactly where you're operating. The bank wants to know when you're operating because it needs to be able to report to that jurisdiction. And also, if anything was to go wrong, they would need to be able to resolve the issue in that jurisdiction. This is why it's very important when you're setting up a business to have a level of economic substance in your business. This can go from as far as having operations on the ground or having a premium address that is clearly used by your business and not thousands of others.
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