Many foreign corporations and individuals that have planned to start businesses in Finland have considered the process for opening a bank account in a local bank overly complicated and time consuming.
This is mainly because the Finnish banks have presented numerous questions concerning the company’s business activities and its shareholders and managers as well as required the client to present passport copies, register extracts and translations of these documents and sometimes detailed information on from where the funds originate. If the presented answers and documents have not satisfied the bank, the bank may have declined to open a bank account or from commencing a client relation.The above is due to the Act on Detecting and Preventing Money Laundering and Terrorism Financing, which establishes quite far reaching obligations for banks to know their customers and the business operations of their customers.
The obligation to know a customer does not, with regard to legal entities, comprise only the representative of the client company, but the entire chain of ownership until the so-called beneficial owners, i.e. the individuals owning at least 25 % of the final parent entity. Therefore, if a Finnish company, for whom a bank account is opened in a Finnish bank, is owned wholly, for example, by an Irish holding company, which in turn is wholly-owned by a US corporation, the bank will request a register extract on the Irish company and the US corporation. In addition, the bank will request a document proving that the US corporation is the sole shareholder of the Irish holding company, as well as a document stating the individual shareholders of the US corporation that owns no less than 25 % of the US Corporation. Lastly, the bank will request passport copies of those individual shareholders, i.e. the beneficial owners of the Finnish company. Depending on the bank, translations and notarization of the documents may be required.
Further, the requirement to know the customer’s business operations means that the bank will ask questions about the Finnish company’s business operations. Generally, the bank will ask what the company’s business operations comprise, names of Finnish and foreign customers and suppliers, estimated turnover and profit, business plans, number and value of domestic and foreign transactions on a monthly basis, and other similar questions.
Therefore, one can conclude that opening a bank account in Finland does require some work and may not always be a walk in the park. However, the process is simpler and faster if the client has collected the above information and documents in advance and is prepared to answer to the bank’s questions.
MK-Law works with a number of banks and would be glad to assist you with opening a bank account in Finland. We help you to collect the necessary documents and information to ensure that opening of the bank account goes smoothly and without delays.
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