UK company with nominee director

[mrbraxo]

Hi everyone,
I own a UK company, I hold a non-EU passport and I'm not an EU resident.
I've been trying to get card processing services for my website but I got rejected by pretty much every payment processor available. Part of it I believe is because I don't have a EU presence and part of it is because I'm dropshipping.
I'm thinking about getting a UK resident nominee director. Is that going to make things easier? or will the payment processors still reject us because I'm the shareholder and UBO ?

 

[Sols]

It depends on which processor you're talking to. Visa and Mastercard have started requiring processors‌ (the underlying acquirer) to ensure that merchants actually have a physical base of operation in‍ Europe, at the address stated on the application. Some acquirers are stricter about this than⁠ others. It also depends on what it is exactly you're selling.

What are your (expected)⁤ monthly volumes?

Why have you not formed a local company and go with a processor⁣ available in your home country? What's the advantage of UK?

 

[mrbraxo]

Ideally I want to get a UK based processor since they're more credible.
I'm dropshipping︀ truck related accessories, expecting €5000 to €10000

It's impossible to start an online business in︁ my home country (I hold a third world country passport)
I'm living in Serbia and︂ I have a Serbian company too. But Serbia is not in the EEA or EU︃ and that makes getting a processor very hard.

 

[JohnLocke]

What payment processors have you been in touch with and what was the outcome of‌ the same?

 

[mrbraxo]

Braintree ,paylike, clearhaus, Cardinity, Hipay, Cardpay (Cyprus company)‍ and maxpay rejected,
instabill said they can't work with UK companies,
handepay and ecommpay rejected⁠ because of my type of business (dropshipping),
a few other "not famous" payment processors rejected⁤ too
CCBill never contacted me after I applied (It's been 2 weeks now)
still waiting⁣ for a reply from 2checkout

ipaytotal and another Indian payment processing company accepted my application⁢ but I'm not confident to move forward with them because their reviews are not good︀

 

[Sols]

Some of those processors are stricter than others but you have spoken to one or‌ two which would usually be open to non-EU merchants operating through an EU shell corporation,‍ under the right circumstances.

The main problem is your volumes are low. You need closer⁠ to 100,000 EUR/month to be worth the risk. Serbia being considered an at-risk jurisdiction for⁤ money laundering is also a problem. Drop shipping is ripe for fraud and is seen⁣ as posing a somewhat heightened risk of money laundering/criminal activity.

You'll have a much easier⁢ time just going to a local Serbian bank and opening a merchant account there. They︀ won't be as fast and competent as typical EU-based PSPs, but focus on growing your︁ business.

If you find an EU processor that accepts you for your current volumes, the︂ commercial terms (pricing, settlement, reserve) are probably very unfavorable, even compared to a local Serbian︃ processor.

 

[mrbraxo]

I tried getting a merchant account at a Serbian︄ bank, my volumes were too low and since I didn't have any processing history they︅ didn't accept me.

Do you think I would have a chance with non-EU based processors?︆ maybe some Indian or Turkish companies?

 

[Sols]

One thing to keep in mind with those types of processors is they often only‌ accept your business because they need the processing volume to pad their miscoding business, where‍ they hide gambling, forex, adult, and so on behind a facade of ecommerce. They often⁠ (but not always) get shut down and run away with money. I've seen it happen⁤ over and over again.

So they could work for you, but be careful. Watch every⁣ settlement and reconcile every single cent. Switch to an EU PSP or Serbian bank as⁢ soon as your business has some enough volume.

 

[mrbraxo]

Thanks for︀ your help.
What do you think about setting up an entirely new UK company with︁ British nominee director and nominee shareholder in the UK, then getting an EMI account and︂ payment processor under the new company?
Are the payment processors going to ask who the︃ UBO is?

 

[sanges]

What payment processors have you been in touch with and what was the outcome of‌ the same?

 

[Sols]

Card processors are required to ask for the UBO. They operate under practically the same‌ KYC/due diligence requirements as any provider of financial services nowadays.

One immediate concern with a‍ nominee is if that nominee has been used before for card processing, and if that⁠ other company got blacklisted. If so, no card processor will work with you since they⁤ are all required to check with Visa and Mastercard blacklists. This could tarnish the reputation⁣ of your company across the entire network.

There are basically two ways to achieve what⁢ you want:
1. Lie to the processor.
2. Get the processor to accept your non-compliant︀ structure.

I always stay away from #1. Option #2 requires volumes your business doesn't have︁ quite yet, except for equally non-compliant processors discussed earlier.

 

[mrbraxo]

I included a list a few posts above,‍ most of the well-known ones rejected me, some because of my residency and nationality and⁠ some because dropshipping is considered kind of high risk .

Thanks for the information. I'm gonna︅ try my luck with some of the non-compliant processors, also I'm hoping I can find︆ some good structure in the mentor group.

 

[JimBeam]

Hi @mrbraxo

Have you tried with this bank in Serbia:
https://www.societegenerale.rs/e-commerce/
Problem with being from‌ Serbia is that the country is on FATF blacklist so any bank in the world‍ would consider you high-risk and it they can find the way not to work with⁠ you - they'll use it.



There aren't many solutions to this problem but can be⁤ solved.

Please email me at [email protected] maybe I can help.

Thank you!

 

[mrbraxo]

I have tried with societe generale before, no luck. I⁢ contacted you.

 

[JackieTsan]

as i've⁢ said many times, stay FAR from cardinity is a big scam... they block your money︀ for ever.. they are regulated from their gonverment but with some research you;ll understand. I︁ lost huge amount and i;m not the only one.. they just complaint to everywhere I︂ post about them and they manage to get it down.. but its a big fraud..︃ better give your money to poor people,... rather than to this m@f1a