Dutch corporate banks, like those around the world, specialise in a variety of products and services, which means that not every bank is capable or eager to accept all types of clients who want to open an account.
There are Private, Retail, Investment, Mortgage, Leasing, Saving, and many more different service-oriented banks, just like everywhere else, that deal with very specific types of clients to bring and derive maximum value.
Most of the major Dutch corporate banks, such as ING, ABN Amro, Rabobank, SNS, and others, are recognised as retail banks; however, most of them also have affiliated subsidiaries that focus on more specific operations, such as MeesPierson, ABN Amro’s Private Banking arm.
The difference is that as a business owner in the Netherlands, you should prioritise developing a relationship with a Retail Bank rather than a Private Bank. This is because Private Banks frequently have burdensome requirements for account balance, turnover and product use that cannot be met by an SME company and can harm its liquidity (for instance, to open an account with the Private Banking division of ING Bank, you should anticipate investing or depositing at least €150,000).
Most of our clients have taken this into account and applied for accounts with the big Retail Banks because of their more reasonable acceptance process.
There has never been a more difficult time for non-resident business owners to open a Dutch corporate bank account. Essentially, banks have lost interest in ‘international corporate clients’. Particularly considering that ING was penalised with a 775 million fine for not following the Know Your Client rules, which help monitor and combat money laundering and terrorism financing operations.
So, What Does This Mean for You as A Foreign Entrepreneur?
We’ve provided some guidelines for you to consider before opening a Dutch corporate bank account.
- Check to see if your country has a multinational bank with a branch in the Netherlands.
- Prepare the necessary means to demonstrate the substance of your company.
- Find a partner in the Netherlands who can assist you in developing a relationship with a Dutch corporate bank. Bolder Launch has over ten years of experience working with (foreign) banks and can help non-local companies establish a relationship with a bank, either inside or outside the Netherlands.
Most Dutch corporate banks do not have an official policy of refusing to accept foreign entrepreneurs as clients. However, foreign entrepreneurs should be aware that most banks welcome high-net-worth individuals or businesses seeking financing. This is because these services generate revenue for the bank which means the bank can invest in the relationship.
In most countries, the banking system is structured in such a way that banks earn very little money from corporate banking, even though the risks are substantial.
In case you get rejected, you might want to focus on obtaining a bank account in Luxembourg or Switzerland. Banks in these countries have changed their Corporate Banking business model. This means you’ll pay higher maintenance and Know Your Client fees, but you’ll have a much better chance of getting a corporate bank account for your European/Dutch company.
Want to get into more detail about your specific situation? Book a call with one of our experts to get tailored advice and guidance.
The Client Acceptance Procedure of Dutch Banks
Although the acceptance procedure varies slightly from bank to bank, there are a few key points to remember.
- Because applications in the Netherlands are conducted through interviews, you should keep in mind that doing a pre-check or speaking with a Private Banker/Account Manager prior to submitting your application is often not possible.
- Most banks will only accept companies formed under Dutch Company Law or companies managed by Dutch nationals.
- It is possible to open a corporate bank account in the Netherlands even if you are not a resident. However, you should expect to arrange certain things prior to the application, such as obtaining a social security number for the board members.
- The interview can then produce several outcomes, which can be broadly classified as follows: After the interview, the account is opened; the bank initiates a more stringent compliance procedure (typically, this means that the answer will be provided within the next two weeks); Following the interview, a client is rejected by the bank.
- The decision to open an account is always made by the bank, so it is impossible for a third party to in any way influence the process and ensure a resolution, despite what many corporate service providers all over the world assert.
- According to EU regulations, banks are not required to provide a reason for rejecting a customer, therefore you normally won’t know why it happened (if occurred).
- Despite a frequent misunderstanding, if a bank rejects you, it does not necessarily indicate something negative; normally, you can apply for an account opening at the same bank in roughly six months.
What should you consider before opening a bank account?
Though there are no restrictions on non-residents in Dutch banks, any entrepreneur who owns a Dutch company and wishes to open a Dutch bank account should keep in mind that banks strongly prefer clients who have invested in their Dutch operations, so your company is more likely to become a client of a bank if it has a physical office and/or has employees/management based in the Netherlands.
Frequently, such arguments are accompanied by a counterargument: “How shall I begin my local operations without a local account? How can I cover my expenses?” – First and foremost, you should understand that this is a practical rather than a legal issue, as a Dutch company is not required to have a bank account in the Netherlands. We’ve expanded on the alternatives to a traditional bank account later in the post, but at this point it’s more of a practical narrative of whether this could be a reason for a bank to consider you as a client.
To cut a long story short, the answer is “No”, because there is no legal requirement for a company to reach physical substance levels within the Netherlands for a bank to accept it as a client. Banks can work with “shell” companies that have no physical presence in the Netherlands, but the acceptance procedure for such companies is much more rigorous than for a “resident company.”
Banks simply prefer doing business with companies that have local substance, which is a factor in this situation. However, this does not mean that you should aspire to develop local substance if it does not fit with your business strategy or goal.
Alternative Banking for A Dutch Company
As you probably know from reading this article, a Dutch company is not required to establish a local bank account, which provides many benefits for foreign business owners. Many entrepreneurs’ ambitions fail because they do not want to spend additional time and money on opening a local bank account. Many businessmen are also reluctant to begin a new relationship with such a strategic partner as a bank because they already have a well-maintained relationship with another bank.
Considering this, we would like to offer a Dutch company some food for thought regarding alternative banking.
There are various alternatives to a standard bank account that can be used in the EU, where the finance sector is evolving quickly.
We’ve listed some of the most popular alternatives to a standard local bank account in the table below, along with some benefits of each option.
| Mobile Banking | An industry worth billions of euros exists now in mobile banking. Many significant, dependable players are already present, including, but not limited to, Bunq Bank and N26 Bank. If you have a biometric passport, opening a Dutch corporate bank account will just take a few minutes of your time. | Transfer costs are very low in mobile banks. EU deposit guarantee covers mobile banks, as they possess a fully-fledged banking license. Accounts are opened remotely (via a video chat). The acceptance procedure is quite simple, but significant onboarding fees can apply (3S Money, Alpha FX). In case you don’t aim to use complex banking products like Letter of Credit; Trade Financing; Incasso etc., mobile banking would be more suitable, as having a traditional bank account is a bit of an “overkill” with such convenient tech available. |
| Payment Institution (PI) / sometimes called FinTechs | A payment institution differs differently from a bank in that it is often an organisation that holds a PI license rather than a banking license but is nevertheless able to carry out transfers, issue payment cards, and assign IBAN numbers (typically facilitated by another bank). | The benefits of a PI are quite like those of a Mobile Bank, although PIs frequently have fewer restrictions and are more flexible when it comes to money transfers. A PI may frequently send money to more places than a mobile bank could since they leverage payment services provided by other banks, which may have a larger correspondent bank network than a standalone mobile bank and have access to additional currencies. |
| Banking in your own country / existing bank | For multinational business owners, opening an account with their current bank is frequently an untapped opportunity because many attractive expansion countries throughout the world have local account restrictions. Banking in your own country is a wise substitute for investing in a new strategic partnership in a foreign nation, especially considering the previously discussed fact that your Dutch firm is not required to maintain a local account after all. | It is always more comfortable to work with a bank that already recognises you as a trustworthy customer and is familiar with your industry. Additionally, since your existing bank is aware of your history with your primary accounts, there is a greater likelihood that they will permit you to employ complex banking products for your new business. Many business owners open subsidiary or independent accounts in their current bank for their new firm, not just for commercial reasons but also for the convenience of conversing with a familiar account manager or banker and being able to call the bank during business hours in their home country. |
| Banking in another country (not your home country) / Banking with a Private Bank | Banking decisions have historically been made by foreign business owners in nations like Luxembourg, Switzerland, Liechtenstein and others. Although opening one of these accounts may be expensive, you can always rely on the calibre of the services you receive. | Such well-known global banking centres as Switzerland, Singapore, Luxembourg and others frequently offer extremely high service standards, a specialised approach and flexibility that a retail bank could not match. Having an account with a private bank ensures that you will always receive the proper attention and have your issues resolved because private banks have taken over the market for specialised service providers. Opening and keeping a Private Bank account may cost more than doing so at a retail bank, but the increased value you receive is obvious to the bare eye. |
Conclusion
Although we recognise the needs and desires of many international entrepreneurs to have a local bank account in the Netherlands, we always say that the location of your bank accounts should not in any way affect your growth ambitions, because a bank account is just a tool for performing your activity and should not play a significant role during your international expansion.
You can rely on Bolder Launch to provide quality expertise and service in the field of banking, and you are welcome to schedule a consultation with one of your experts to discuss your specific situation.
