Revolut business locked account UK (horror story)

[georgio]

Hello,

2 months ago, Revolut business for my UK company started asking proof of income and invoices for my revenue. I've provided all the papers asked.
At first, without any warning, they blocked the transfers that I could make from the account. I was able to make transfers only to Revolut personal accounts. Then again without notice, they blocked incoming transfers to my account.

Last week, I've received a payment from a client. They said the transfer was executed on their side, but in Revolut the funds were appeared as pending for more than a week. I started to chat with them, asking politely what papers do they need to unlock my account, and if there is an official lock (there was no info on their side on that point). Finally, I had the information that the transfer is reverted, and that Revolut asks me to close the account within the month, and withdraw all the funds.

My company is registered in the UK, my clients are in the EU, and I'm a resident in my home EU country (few incomes from UK clients, no income from my home EU country).

Is it Revolut, or England is becoming less international-tax-bank friendly? What are the other banking options? I have TW, but I don't trust them because their EU account is based in Germany, and HSBC which seems to be a terrible bank experience that can lock your accounts without reason at any point, if you do anything international.

Also which EU country would you consider for both residency and company? Bulgaria or Cyprus?

Thanks

 

[rowena]

TW is trustable and biggest EMI, I have 7 digit business with them but the problem is your business nature. What're you doing exactly ? Is your business high-risk?

 

[georgio]

rowena said:
TW is trustable and biggest EMI, I have 7 digit business with them but the problem is your business nature. What're you doing exactly ? Is your business high-risk?
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I used to have revenues from apps on the App store (which are now slowing down/closing), and now almost all of the revenue comes for freelance consulting work for multinational companies. The fact that these paying companies are not in the UK are possibly a reason why Revolut closed the account? They didn't give a reason.. Someone could say that I would need to open a branch in the countries where the clients are, but I guess that is in the interpretation of tax authorities..

 

[John Andrews]

Get a a real bank account, always diversify your business.

Also TransferWise is now in Belgium.

 

[rowena]

georgio said:
I used to have revenues from apps on the App store (which are now slowing down/closing), and now almost all of the revenue comes for freelance consulting work for multinational companies. The fact that these paying companies are not in the UK are possibly a reason why Revolut closed the account? They didn't give a reason.. Someone could say that I would need to open a branch in the countries where the clients are, but I guess that is in the interpretation of tax authorities..
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We're in the same business. My revenue also coming from Apple & Google app stores. You should not face any issue for this type of income but of course, freelance consulting is another thing. I believe Revolut closed your account because of consulting related transfers.

By the way, why your app related income slowing down/closing ?

 

[blackeric]

rowena said:
You should not face any issue for this type of income but of course, freelance consulting is another thing. I believe Revolut closed your account because of consulting related transfers.
Click to expand...

Why? What's wrong with that?

 

[rowena]

@blackeric
I didn't say wrong. EMIs have different rules for marketplace(Amazon, eBay, Apple, Google etc..,) and third-party payments. Marketplace payments considered low risk sources.

 

[blackeric]

@rowena I didn't say that you said wrong. I asked "what's wrong", "why is consulting treated differently"?

 

[georgio]

mange38 said:
Get a a real bank account, always diversify your business.

Also TransferWise is now in Belgium.
Click to expand...

My TW business bank account is in Germany, TW personal bank account in Belgium.

rowena said:
We're in the same business. My revenue also coming from Apple & Google app stores. You should not face any issue for this type of income but of course, freelance consulting is another thing. I believe Revolut closed your account because of consulting related transfers.

By the way, why your app related income slowing down/closing ?
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Well, now all my income comes from freelance clients.. The apps were in the Fitness industry, where there is a lot competition, I can't see a way to make it profitable, plus the fact that stores keep 30%+VAT/state taxes. Congrats if you manage to make high profits in the (tough) app business.

I guess the account closed because of the freelance from companies outside the UK?

Does anyone knows EMIs other than Revolut and TW for a UK company?

 

[buenosdias]

Don't put all of your eggs in one basket. Especially in these waters. Things change, and sh*t happens.

I'm surprised you didn't choose TW or something like that in the first place. Also, try to get a real bank acc. just as a backup.

You're in an EU country, your business and clients are based in EU. There's a lot of solutions and tools available to you. Use them.

 

[Martin Everson]

georgio said:
I guess the account closed because of the freelance from companies outside the UK?
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Seems odd something must have spooked them to pay attention to what you are doing.

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Please note my posts should not be taken as financial or tax advice. Please seek professional advice in that respect.

 

[georgio]

buenosdias said:
Don't put all of your eggs in one basket. Especially in these waters. Things change, and sh*t happens.

I'm surprised you didn't choose TW or something like that in the first place. Also, try to get a real bank acc. just as a backup.
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I have an HSBC Business UK account, which is the only business bank account in the UK I know, that can open account to a non-resident director.

Martin Everson said:
Seems odd something must have spooked them to pay attention to what you are doing.
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I hope it's not any tax office from another country that reached them. The odds seem low here. I've read that Revolut implements automatic anti-laundering checks, and dropping off clients that are of higher risk. Can it be because of Money Laundering Regulations 2017 ?

It's weird not to have information on why they close this account..

 

[Martin Everson]

georgio said:
I hope it's not any tax office from another country that reached them. The odds seem low here. I've read that Revolut implements automatic anti-laundering checks, and dropping off clients that are of higher risk. Can it be because of Money Laundering Regulations 2017 ?
Click to expand...

I doubt that's the reason.

I would say the customers are the problem. You say your clients are in the EU but where did they send the money from an offshore bank or from EU bank?

Also have you been accessing regularly revolut from outside the EU when you say you are resident in EU?

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Please note my posts should not be taken as financial or tax advice. Please seek professional advice in that respect.

 

[buenosdias]

Since govs and other bodies have enforced heavy penalties and fines for financial institutions for even little things, companies are easily spooked. Nobody wants to pay fines. That's for HSBC and Deutsche.

I think the problem lies with the word ”˜consulting'. It's vague, and you can't prove that you actually did (or didn't do) anything. It's commonly used in money laundering and other bad stuff. So you might want to go an extra couple of miles, and make sure that nobody gets the wrong idea. For example, if your website looks sh*t and straight out of a generic template, make it more tailored to your business, with names, faces, addresses, legal docs, etc. Things like that can help.

 

[Artemis Eleutheria]

buenosdias said:
I think the problem lies with the word ”˜consulting'. It's vague, and you can't prove that you actually did (or didn't do) anything.
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Real consulting work comes with heavy confidentiality clauses ... it will can be breach of contract even to confirm the existence of such a contract.

 

[georgio]

Martin Everson said:
I doubt that's the reason.

I would say the customers are the problem. You say your clients are in the EU but where did they send the money from an offshore bank or from EU bank?

Also have you been accessing regularly revolut from outside the EU when you say you are resident in EU?
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Indeed one customer sent the money using an EU French company, and another using a Luxembourg payment service (Mangopay).

Maybe the mistake is that I have been using Revolut business cards mostly in EU countries, but not in my home (resident) country.

buenosdias said:
Since govs and other bodies have enforced heavy penalties and fines for financial institutions for even little things, companies are easily spooked. Nobody wants to pay fines. That's for HSBC and Deutsche.

I think the problem lies with the word ”˜consulting'. It's vague, and you can't prove that you actually did (or didn't do) anything. It's commonly used in money laundering and other bad stuff. So you might want to go an extra couple of miles, and make sure that nobody gets the wrong idea. For example, if your website looks sh*t and straight out of a generic template, make it more tailored to your business, with names, faces, addresses, legal docs, etc. Things like that can help.
Click to expand...

True, but I don't have a physical office in the UK, I conduct work mostly from home (or Airbnbs), and sometimes at the client's place.

 

[buenosdias]

georgio said:
True, but I don't have a physical office in the UK, I conduct work mostly from home (or Airbnbs), and sometimes at the client's place.
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As I learned recently (thanks to @Martin Everson) you don't need to have an office in UK. Just an address will suffice. You can use a virtual office, or just use a mail forwarding address.

 

[ontherun]

run the names and company names (add country name as a filter) of your clients through namecheck, pepscan etc. or borrow someone's account and pull a report. see how many hits are returned and under which categories. this will basically tell you why the transfers got blocked. because this is how revolut itself does AML too

 

[Martin Everson]

That's what I used to do using Thomson Reuters worldcheck when I had access to it. Sometimes a name or business name is associated with a blacklisted person even if that person is not directly blacklisted themselves. It would then be the call of EMI over what to do next.

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Please note my posts should not be taken as financial or tax advice. Please seek professional advice in that respect.

 

[ontherun]

Martin Everson said:
That's what I used to do using Thomson Reuters worldcheck when I had access to it. Sometimes a name or business name is associated with a blacklisted person even if that person is not directly blacklisted themselves. It would then be the call of EMI over what to do next.
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Exactly. btw it is possible to request the removal of a hit as well. But you have to have a pretty serious account in order to make such requests. Won't work on borrowed accounts either. I was sometimes wondering why someone doesn't setup a "remove yourself from all of the world's KYC/AML blacklists" service lol...