Opening a US LLC is an attractive option for non-US entrepreneurs looking to expand their business presence. With a US LLC, you gain access to the credibility and market potential of one of the world’s largest economies. A significant advantage is the ability to open a US business bank account—an essential tool for smooth financial operations. However, not everyone can access this benefit.
For citizens and residents of certain countries, opening a US business bank account is more challenging—and sometimes outright impossible. In this post, we’ll explore the reasons behind these restrictions, the countries affected, and whether forming a US LLC is still worthwhile for entrepreneurs facing these limitations.
Why some foreigners face restrictions
US banks impose restrictions on opening accounts for individuals from specific countries due to compliance with strict regulations. Here are the main reasons:
- US sanctions: Countries under US government sanctions are automatically high-risk for banks. Allowing residents or citizens from these countries to open accounts could violate these sanctions. Examples include Iran, North Korea, Syria, and Cuba.
- Anti-money laundering (AML) regulations: US banks must comply with AML laws, which require them to verify the source of funds and ensure they aren’t aiding illegal activity. Some countries are flagged as high-risk for money laundering or fraud. Examples include Nigeria, Pakistan, and Venezuela.
- Risk management: Banks assess geopolitical and economic risks when offering financial services. Countries with unstable economies or conflict zones often face restrictions. Examples include Palestine, Lebanon, Ukraine.
These policies vary by bank, but fintech banks like Relay and Mercury follow similar guidelines to traditional banks.
List of restricted or prohibited countries
Currently, citizens or residents from the following countries face difficulties opening a US business bank account:
- Turkey
- Russia
- United Arab Emirates (UAE)
- Lebanon
- Ukraine
- Bosnia
- Albania
- And many other countries—based on specific bank policies; always check with your chosen bank.
Individuals from the majority of Middle Eastern and African countries unfortunately also face similar challenges. A certain number of Asian countries as well. For the most accurate and up-to-date lists of prohibited countries, consult the policies of your intended bank. For example, Mercury and Relay provide detailed information about their restrictions.
Citizenship vs. Residency: What’s the difference?
US banks assess both citizenship and residency when determining eligibility for opening an account. Here’s how they differ:
- Citizenship: If you hold a passport from a restricted country, banks may deny your application regardless of where you currently reside. For example, a Russian citizen living in Germany might still face restrictions.
- Residency: If you live in a restricted country, banks may consider you high-risk even if you hold a passport from a non-restricted country. For example, a German citizen living in Lebanon might face challenges.
This dual evaluation makes it critical to check both aspects when planning to open a US business bank account.
Are there any workarounds to open a US bank account?
For citizens or residents of restricted countries, opening a US business bank account can be a frustrating process. Unfortunately, there are no real workarounds for these US legal requirements.
You only have a few other options that may or may not work for your situation:
- Consider alternative banks: While fintech banks like Mercury and Relay are popular for their remote account-opening processes, they may have stricter compliance rules. Traditional US banks might offer more flexibility, but they often require an in-person visit.
- Partner with someone in a non-restricted country: If you have a trusted partner or co-founder from a non-restricted country, they may be able to open the bank account on behalf of the LLC. But some banks, like Relay, won’t open an account for a company where even one owner is from a restricted country.
If none of the US solutions apply to your situation, you can explore non-US banking options that still allow you to receive US and other international payments. Some international banks or online payment platforms might allow you to link your US LLC without needing a US bank account directly.
Receiving payments without a “real” US bank account
Even without an account with a “real” US bank, like traditional US banks or fintechs (Mercury, Relay), you can probably set up Stripe and receive international payments using some workarounds.
A Wise Business account can be a viable option for many entrepreneurs to receive US and other international payments through Stripe and other platforms. While Wise is not a US-chartered bank, it still provides US bank details for receiving payments. It also offers multi-currency support.
Payoneer and AirWallex are other options that can work with Stripe.
So, even if the typical top US banking options are not available to you, you can probably still leverage your US LLC to open a bank account that works for your business. Talk to our experts to assess your situation.
Is a US LLC still worthwhile without a US bank account?
If you’re unable to open a US bank account, you might wonder whether forming a US LLC is still a good idea.
Without a US bank account you might face difficulties setting up integration with payment platforms like Stripe. However, banking alternatives like Wise Business, Payoneer, or AirWallex, can still give you access to Stripe. You would still need a US LLC with an EIN to open the account.
And you would still have the legitimacy of having your business incorporated in the US.
Ultimately, the decision depends on your specific business goals. If access to the US market outweighs the inconvenience of limited banking options, a US LLC can still be a worthwhile investment.
Limited options for restricted countries
While forming a US LLC offers numerous advantages, the inability to open a fintech US business bank account can be a significant drawback for entrepreneurs from restricted countries. Understanding the reasons behind these restrictions and exploring potential workarounds can help you make an informed decision.
For some, the credibility and market access of a US LLC may outweigh the banking challenges. For many however, access to the US banking system is a key reason for having a US company. Unfortunately, being from or living in a restricted country can severely limit your options – but not eliminate them completely.
The decision whether to approve an account opening always lies with the bank, not us. We will do our best to inform you of the available options and guide you through the process.
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