Banking UK LTD Startup Difficulties and Shock

[Sols]

Medical equipment is considered high-risk by financial institutions‍ due to the heightened liability companies may face.

If you do business in MENA, try⁠ Turkish Bank (https://www.turkishbank.co.uk), Zenith Bank (Welcome to Zenith Bank UK), Europe⁤ Arab Bank (Europe Arab Bank), Union Bank, and Ahli Bank UK. Those are⁣ the banks I tend to see the most when it comes to EMEA/MENA businesses in⁢ UK that for one reason or another have no success with the big banks.

You can try EMIs like TransferWise and WorldFirst, but have a discussion with them first to︀ make sure that your business model is in line with their AUPs. Medical equipment is︁ a broad term and can include everything from surgical equipment to gloves to respirators and︂ large machines.

It won't hurt to try the others but if Barclays said no, chances︃ are that the other high street banks will as well. It's an unfortunate reality that︄ having a Lebanese passport puts you in an elevated risk category. Combine that with doing︅ business in regions that are also considered high-risk selling goods/services that as well are deemed︆ risky, and it's going to be a tough sell.

Your chances may increase if you︇ are able to sit down with the bank (over a call, if in-person meeting isn't︈ an option) and explain your business in detail. Cold applications submitted online tend to be︉ rejected more often than those preceded by a dialogue.

 

[soly20]

Thank you for the reply and the information.︉ I do realize that sitting with the corporate person at the bank personally is much︊ better than online application. Unfortunately with COVID, this was the only way to do it.︋ I guess I will wait for COVID to cool down a bit (hopefully it will).︌ I am here in the UK specifically to open this company as a subsidiary for︍ the Lebanese company that I work for. I am yet to transfer the shares to︎ the Lebanese company, they are still in my name. I am afraid that when i️ do transfer the shares, into the parent company's name, things will be even more complicated!‌ If this doesn't wok, then I won't be ale to runt he business and therefore,‍ my visa won't be extended and I would have wasted years of my life as⁠ well as having to move my family again.

BTW, Barclays said yes, opened the account⁤ and then 10 days later sent me a letter saying they will close the account⁣ in 2 weeks.

 

[Sols]

If you're not in a rush, then waiting until︄ you are able to meet with a bank in person would definitely be the path︅ I'd go for in this case. Your business is probably fine but there are a︆ lot of red flags that you need to navigate the bank through. A company is︇ in a very different risk category when ownership changes from a local resident natural person︈ to a foreign company.

Try the cross-regional banks mentioned.

That means they said no, just︋ with a delay. They probably gave you approval because you passed all the automatic checks,︌ but then someone manually reviewed it and decided it was too risky.

 

[Martin Everson]

The more you explain the worse it gets...lol.

Lebanese Passport = High Risk
MENA Countries‌ = High Risk
Medical Devices = High Risk
Subsiduary of Lebanese company = High Risk‍

What next you need to receive USD payments (High Risk) to complete the slam dunk?⁠ conf/(%

You got your work cut out for this one to open and maintain a business⁤ account. Just find a MENA bank branch in UK or abroad if you want the⁣ banking relationship to survive.

 

[soly20]

Yeah, it is quite sad⁢ to hear this. So you are saying, even if a bank agrees to open up︀ an account, they will eventually ask me to close it once they see the activity?︁ Why is USD high risk? Should I asked to be paid with Euros/GBP? Is it︂ better?

 

[Martin Everson]

It's high risk as banks‌ are subject to extra scrutiny by correspondence banks in NY when processing such payments. Remember‍ all cross border movement of dollars globally within the banking system take place via banks⁠ in NY. If a bank in Lebanon sends dollar to a bank in London. Then⁤ the funds move between the Lebanon's banks Nostro account in NY and the UK banks⁣ Nostro account in NY. The US banks sees the movements and can at any time⁢ request data on the reason behind any random movement. The risk of compliance problems due︀ to failure to document the movements or failure to fully adhere to anti money laundering,︁ terrorism financing etc can result in a bank being fined heavily or losing its correspondence︂ banking relationship. It is very different then GBP transactions where the bank is their own︃ policeman as they have direct clearing of GBP with no middleman watching them. EMI's like︄ Transferwise etc even have restriction over use of dollars and so do other EMI's.

Also European banks only really work with large or established companies doing business in MENA countries︅ where the transactions involve documentary credit i.e LC's, SBLC's etc. Thats because these instruments are︆ very profitable for the bank. Unless you can wave this carrot in front of their︇ faces and plan to use such services then economically on a risk reward basis its︈ not worth holding a relationship with a high risk business where they will only earn︉ a small wire fee for all that risk.

Yes 100%. Working outside dollar will︋ not spook banks out so much. However you need to walk into a major bank︌ i.e HSBC branch in London Victoria station and go down stairs and speak to the︍ business desk. Show them legitimacy of parent company and a track record and explain purpose︎ of opening UK company and account. If your business sounds plausible and you will be️ using some of their documentary credit services then they may at least show some interest.‌ But if Lebanon is on their blacklist then nothing you can do. You will have‍ to keep searching for a MENA bank with operations in UK.

 

[soly20]

Thank you for the valuable info. I can insist⁠ on my clients on getting paid in GBP or Euros.
HSBC definitely has a ban⁤ on Lebanon stupi#21 The parent company was a client for years until HSBC pulled out of⁣ Lebanon completely a few years back.

 

[Martin Everson]

Any Lebanon connection is damning for‍ business. US has it in its cross-hairs. Local banks are just not gonna want any⁠ connection to businesses out of there until the situation until it blows over. Again find⁤ a foreign bank in UK hi%#.

https://www.middleeastmonitor.com/2...individuals-and-entities-linked-to-hezbollah/

 

[soly20]

Yeah, I know all about these issues. However the US and⁠ the world knows that not all Lebanese are affiliated with this terrorist organization and a⁤ lot are vehemently against it. It is sad that the whole population is being discriminated⁣ against because of one group.

 

[exprtadvisrdev]

The more stuff I read like this the more I believe in cryptos. It makes‌ me sad that most of the people are only using cryptos to speculate, get rich‍ quick and scam others...

 

[netixone]

If you're in the UK you should︌ have a credit file.

Do a credit search on yourself and find out if you︍ have any CIFAS or NATIONAL HUNTER markers.

If you haven't, ask Barclay's why they sent︎ you an NTC (notice to close) after you put money in, be prepared to prove️ source of origin of money (for example from a taxed source such as PAYE), and‌ hit them with a subject access data request under the GDPR.

If Barclay's have stiffed‍ you, there's a likelyhood that another of the high street banks will as well.

CIFAS

 

[soly20]

I am subscribed︀ to Credit Karma and Experian. I have no markers whatsoever. I just got to the︁ country last November.
The source of the money is my Barclay's Premier personal account. I︂ transfered money from my saving's account when I moved to the UK. They don't seem︃ to have have a problem with it in my personal account.

I called Barclays and some guy on Business telephone banking said he︈ has no idea why it was done and he said he had never seen this︉ done before, so close to account opening date.

Do you know who can I email︊ about NTC and the subject access data request under the GDPR??

 

[bizniz]

Medical equipment just became super high risk in the last year since Covid started, because‌ there are so many scams with fake PPE, fake everything and banks do not feel‍ they can distinguish between legitimate businesses and scammers. Having read the thread, I think this⁠ is the main reason Barclays closed the account.

 

[Fred]

As you mentioned you will deal with Dubai mainly from the MENA country I can‌ imagine that Dubai based banks with presence in London could be open for you as‍ well as you have with your UK residence and company economic link to the UK⁠ as well as economic link to the UAE with your clients in Dubai.

You have⁤ FAB, ENBD and ADCB in London.

 

[Martin Everson]

btw I posted a whole‌ article about why USD is high risk. It goes into more depth than I could.‍

https://www.offshorecorptalk.com/th...ney-laundering-act-of-2020.32659/#post-165160
P.S Never work with USD if you can find a way to avoid it⁠ thu&¤#

 

[soly20]

Thank you. I will⁣ check them out.
It seems like International/MENA banks seem to be the way to go.⁢
UK banks seem useless.

 

[soly20]

I can avoid it⁠ and use Euros instead. Except for Chinese manufacturers, they require USD! Not sure if they⁤ are flexible on this point.

 

[soly20]

I just got rejected by NatWest!

I don't know and they︀ don't let you know what the "criteria" is! This is grossly ambiguous! All their questions︁ were answered and they did not require any additional information and/or clarifications.

 

[Martin Everson]

Natwest is 62% owned‌ by the UK government. They will probably be the last bank to help you sadly‍ 🙁

Did you try any of the other recommended banks on the thread?

 

[soly20]

I just got accepted for cardonemoney Business account.⁠ Now I am scared they will ask to close the account like Barclays in 10⁤ days! nai¤%
The approval was not automatic, they called me a few times asked some questions⁣ and asked me to send some documents. They said they do provide company IBAN. Is⁢ that correct? I don't have to list their account details for incoming transfers? I can't︀ find anything about this on their website.