CIM bank demanding substance, any advices?

[Serni]

Hello,
I own Scotland LP and some time ago I've got email from CIM demanding me to open an office and to hire an employee in the UK. I have an offer from my registration company to send me the documents proofing I have an office and employee for 2350GBP/year. They send me the sublease agreement and work contract with UK citizen for that.
I am struggling if I should pay for that (how long it will help me to save the account?) or search for my luck in another banks (like Russian, for example - I have some good connections there). Or probably rent a real office in UK and hire some person there.
A little bit tired of this cat-and-mouse game and looking for some long-life solution for my business. Even thinking about moving my business to my residential country.
Any thoughts?

 

[boomy]

Serni said:
Or probably rent a real office in UK and hire some person there.
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Thats the very best to do if you have the money and can afford it!

If you are that good connected in Russia I don't understand why you setup anything with CIM bank and anywhere else?

 

[Serni]

boomy said:
Thats the very best to do if you have the money and can afford it!

If you are that good connected in Russia I don't understand why you setup anything with CIM bank and anywhere else?
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Russia isn't the best place for doing the international business. Opaque tax system, bank control, taxes, etc, etc. Everything is very complicated when you own the everyday operational international business and one day you can find yourself locked in prison, easily.

 

[CaLViN]

Same for me.
We will go with renting an office and having a local secretary.
Audited reports are necessary,too.
We want to keep the account active as having a bank account nowadays is really valuable.

 

[Serni]

CaLViN said:
Same for me.
We will go with renting an office and having a local secretary.
Audited reports are necessary,too.
We want to keep the account active as having a bank account nowadays is really valuable.
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What's the budget for it?

 

[CaLViN]

Costs around 500 EURO per month.Seems logical for our business.

 

[Serni]

CaLViN said:
Costs around 500 EURO per month.Seems logical for our business.
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500 Euro doesn't look that much, but how do you fit your office and secretary in it? The minimal wage in UK is more then 1700 pounds and CIM demands it has to be full-time worker and they check if you pay him a real salary.

 

[CaLViN]

Well,our company is in Estonia which means wages are cheaper..

We also have a UK company with Rietumu Bank account and they accepted only employee contract and rent agreement but CIM bank asks for more as you have mentioned.

 

[Martin Everson]

I wonder of this is the direction other European banks are heading in? Could be a worrying trend even for those of you living in the Europe who simply chose another European country to establish a company because it is simpler.

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

 

[Silvio]

Martin Everson said:
I wonder of this is the direction other European banks are heading in? Could be a worrying trend even for those of you living in the Europe who simply chose another European country to establish a company because it is simpler.
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From what I hear, most banks just want substance SOMEPLACE, doesn't have to be in the jurisdiction you are incorporated at. Or are satisfied at a lower level of substance.
CIM are very excessive and I don't think it will work out well for them. I wonder if they will become more lenient soon when they see many of their clients leaving the bank...

 

[CaLViN]

Correct,CIM wants them all :

CIM Bank makes changes to its rules.
1). It is necessary to confirm company office in the country of registration;
2). It is necessary to confirm employee in the country of registration;
3). It is necessary to provide AUDITED statements;
4). It is necessary to provide tax return report.

 

[JackAlabama]

CaLViN said:
Correct,CIM wants them all :

CIM Bank makes changes to its rules.
1). It is necessary to confirm company office in the country of registration;
2). It is necessary to confirm employee in the country of registration;
3). It is necessary to provide AUDITED statements;
4). It is necessary to provide tax return report.
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These rules are really heating up and are annoying as hell. Is it time to move to Africa, rent a small hut as office and hire a part time secretary picking up the phone and have another employee specific for your business. All for 50$.


That might be a good business idea to pull off?

 

[CaptK]

A lot of people are doing that now. You can get an office, manager and secretary for 500 pm in Nairobi. Similar thing in Johannesburg.

 

[Mark Rucken]

CaptK said:
A lot of people are doing that now. You can get an office, manager and secretary for 500 pm in Nairobi. Similar thing in Johannesburg.
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Except that CIM does not support African companies, so they might just close your accont if you show up with office and stuff from Africa 😀

 

[JackAlabama]

Mark Rucken said:
Except that CIM does not support African companies, so they might just close your accont if you show up with office and stuff from Africa 😀
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Maybe time to switch the whole setup to Africa? 😉😉

 

[Martin Everson]

CaLViN said:
Correct,CIM wants them all :

CIM Bank makes changes to its rules.
1). It is necessary to confirm company office in the country of registration;
2). It is necessary to confirm employee in the country of registration;
3). It is necessary to provide AUDITED statements;
4). It is necessary to provide tax return report.
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They must be confident that clients can afford to create the substance and that CIM have a compelling banking offering for clients that they won't choose to leave for an easier life.

JackAlabama said:
Maybe time to switch the whole setup to Africa? 😉
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To be honest this might be option. Tons of freezones across Africa offering zero tax and plenty of international banks servicing them in Africa.

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

 

[daxbr]

CaptK said:
A lot of people are doing that now. You can get an office, manager and secretary for 500 pm in Nairobi. Similar thing in Johannesburg.
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Just checked for lowest GDP, any contacts in Somalia? 🙂

 

[JackAlabama]

Martin Everson said:
They must be confident that clients can afford to create the substance and that CIM have a compelling banking offering for clients that they won't choose to leave for an easier life.



To be honest this might be option. Tons of freezones across Africa offering zero tax and plenty of international banks servicing them in Africa.
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Due to lockdown I made quite some research about Africa talked with countless people, lawyers, banks and whatnot online.
Enforcement is also often also very lax in case errors have been made.
A vast array of mobile money / card processing is also available.

Minimum wage is often 50$/month. That is enough for someone picking up a mobile phone. Also there is no need for a posh office.

 

[JackAlabama]

daxbr said:
Just checked for lowest GDP, any contacts in Somalia? 🙂
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No, I have not looked at this place.
It could well be that they are blacklisted like Sudan. They have also Somaliland/Puntland and its a pirate hot spot.

Other countries there have very low minimum wages too and are not blacklisted.
Botswana for example is also dirt cheap in regards to labor.
80k $ gives a PR, they have territorial tax etc., beautiful nature. And you do much more than any of these political charities.

Last edited: Nov 25, 2020

 

[CaptK]

daxbr said:
Just checked for lowest GDP, any contacts in Somalia? 🙂
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Contacts yes, anyhope of getting your cash out?........................ NONE!!

Minimum wage is often 50$/month. That is enough for someone picking up a mobile phone. Also there is no need for a posh office.
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A simple office office in Kenya with a mobile phone and just getting them to respond to enquiries will suffice. They can post it on their LinkedIn as Director of bulls**t and Head of Bollocks. To be honest you could do this for about 150 a month.