It happens that banks and financial institutions may see information technology (IT) companies as high-risk. Actually, they treat businesses in gambling, Forex, and brokerage sectors in the same fashion. This makes it harder for IT companies to open a bank account in 2024. This is why when you are choosing a Hot Air Balloon Rides, try to keep this high-risk label in mind.

The location of your bank matters because of the rules set by both the countries and the banks themselves about where the company is registered and where its founders or shareholders reside.

Why IT businesses face account denials: surprising reasons behind bank rejections

When applying to open a corporate account, many IT businesses are surprised if they get turned down. Since IT is one of the most popular and fast-growing sectors today, you may think banks would be eager to welcome these customers. However, the reality is quite different.

Here are some reasons why banks might refuse to open an account for an IT company:

• Standard Errors: Just like with any other business, mistakes, typos, or false information in the application may result in denial for an IT company.
• High-Risk Classification: Banks need customers to prove their business activities and sources of income to comply with anti-money laundering and financial fraud regulations.
• Indirect High-Risk Connections: IT companies might develop software for high-risk sectors (examples may include porn sites or brokerage firms) or provide hosting services to questionable websites, which raises red flags for banks.
• Verification of Funds: Banks need detailed contracts and corporate documents that specify the company’s partners and assets. Yet IT firms, especially those developing mobile apps, may struggle to provide signed agreements with all potential customers.
• Website Authenticity: Even if an IT company has a clear and informative website, it’s hard to verify the accuracy of the information and the true purpose of the software or transactions, which increases the risk of fraud.

However, not all financial institutions are equally strict, and not all of them are likely to frown on you. Some set specific conditions for high-risk sectors (e.g., different tariffs, requirements for a real presence in the country, or more in-depth transaction checks), but this is it.

Where to open an account for your IT business

Actually, you can open an account for your IT company in many countries. You just need to know where to go and what to do. So, where do IT companies have the best chances?

• European Banks and Payment Systems: Certain  European banks and payment systems work with high-risk companies, including IT businesses. They may need to verify all operations and thoroughly check the company and its partners. In most cases, these institutions will open accounts for companies from EU states or EU-friendly jurisdictions. The UK is also a great choice, as it comes with several financial channels for high-risk sectors and doesn’t require the company to be present in the country at the same time.
• Banks and Payment Systems in the CIS: CIS states are generally open to foreign IT companies. Say Kazakhstan is willing to open accounts for them, but be prepared for higher rates and commissions.
• Banks in Asia and Other Continents: For IT companies that operate in multiple jurisdictions, banks in Asia and other continents are great to use. Mauritius, for instance, allows account openings for various industries, including IT. Africa is another promising region where IT companies open accounts for both personal and corporate purposes. Likewise, banks from Singapore are known to work with IT companies.
• Offshore Banks and Global Payment Systems: These are one more promising opportunity for IT companies and other high-risk sectors.

In any case, the choice of banks suitable for IT specialists is limited today. This is why it makes perfect sense to request a consultation from financial industry pros. 

Top payment solutions for IT businesses in 2024

The IT industry isn't tied to a specific location or physical assets like factories or warehouses. This means IT businesses can operate globally, no matter where their customers are.

First, you need a well-organized company website. But how will you handle payments? 

One solution is to use cards and transfers via your website.

Most businesses open merchant accounts along with corporate ones. A merchant account lets you accept payments from customer cards, either through your website or a POS terminal. The process is similar to any online store: it includes input, transfer, and confirmation.

Since the IT sector is seen as high-risk, not all financial institutions will open merchant accounts for these companies. Setting up a merchant account in one institution simplifies things, but you'll need to carefully review the products and conditions offered by the payment system or financial institution.

You can open both a bank and a merchant account in the same financial institution if the payment system is linked to the bank or allows individual IBANs to be opened in its system. However, in most cases, you'll need to open two separate accounts (merchant and corporate) and sometimes use different financial institutions for each.

Need both registration and a bank account? Here's how IT companies can do it

No one will give you a 100% guarantee, but you can lower the risk of service denial by doing two things at the same time: registering an IT company and opening a bank account. Simply launch a company in a country with favorable tax rates and conditions, which might even get you a residence permit, and open a bank account for your IT business.

Doing this on your own may certainly be tough. If you think you might need help, International Wealth experts are here for you.

If you still want to do everything yourself, remember that registering a company is usually easier than getting bank approval. To make things easier, you are welcome to benefit from our pre-approval service and apply to several banks at once.

Need assistance? Reach out to International Wealth today!

If you have any questions left, just ask. The International Wealth team is always here to help. You can count on our professionalism and confidentiality anytime. To be the first to reap the benefits, don't hesitate to contact us now!