Contents
- What is compliance and why is it important when opening an account?
- Features of Opening an Account in Spain
- Hidden Barriers Related to Compliance
- How to Successfully Pass Compliance Checks When Opening an Account
Opening a bank account in Spain often seems simple, but it hides a few challenges. The main "invisible" problem is compliance – a system of checks combating money laundering and financial crimes. These requirements can significantly slow down the process and may require additional documents. In this article, experts from Laduchi Consult explain the less obvious issues and offer practical advice on overcoming them.
What is compliance and why is it important when opening an account?
It is a system of measures and procedures to ensure adherence to legal requirements and standards set at national and international levels. In the context of opening a bank account in Spain, compliance refers to a set of rules and standards that banks are required to follow to prevent crimes such as money laundering, terrorism financing, and tax evasion. Passing bank compliance is also necessary when verifying funds for a Spanish bank.
Features of Opening an Account in Spain
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Customer Identification (KYC)
Banks are required to conduct a "Know Your Customer" (KYC) procedure, which requires clients to provide documents that verify their identity. This can include a passport or a tax identification number (NIE for non-residents).
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Source of Funds Verification (AML)
Financial institutions must not only identify customers but also verify the source of their funds and analyze transactions. For example, as part of Anti-Money Laundering (AML) efforts, they need to establish where the funds that the client plans to deposit into the account are coming from. This may require providing statements from other accounts, tax returns, property sale contracts, or other documents that confirm the legal origin of the funds.
Hidden Barriers Related to Compliance
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Additional Checks for Non-Residents
Non-residents in Spain face more stringent checks, as banks aim to minimize risks associated with international transactions. Verification of citizenship, legal status in this country, and additional financial data can significantly slow down the account setup process. Compliance systems require detailed analysis, especially if the client needs to confirm the legality of funds from a country considered high-risk by international regulators.
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Increased Documentation Requirements
As part of compliance, local banks may request documents beyond the standard requirements, such as proof of tax residency, financial history, and statements from other banks. For foreign companies, a detailed ownership structure is required, which can be particularly challenging for multi-tiered international holdings.
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Restrictions for Citizens from Sanctioned Countries
Compliance systems monitor clients from countries subject to international sanctions or under heightened scrutiny by financial institutions. Citizens from such countries may face outright refusal to open an account or prolonged and thorough checks. This may include additional requests to verify sources of income and transactions related to those countries.
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Denial of Service Without Explanation
Under compliance regulations, banks have the right to refuse to open an account without providing detailed reasons if they identify potential risks or non-compliance with regulatory requirements.
How to Successfully Pass Compliance Checks When Opening an Account
Overcoming hidden difficulties when opening an account in Spain requires careful preparation and a strategic approach. In this section, experts from Laduchi Consult will discuss practical steps and recommendations that can help you effectively navigate compliance checks and minimize risks.
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Preliminary Document Preparation
Before approaching a bank, gathering a complete set of documents is essential. In addition to standard requirements such as a passport and tax identification number (NIE for non-residents), prepare financial documents that prove the legal origin of your funds.
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Transparency of Financial Flows
Prepare evidence of its legal origin in advance, especially if the funds are being transferred from abroad. This may include bank statements, tax returns, sales contracts, and other contracts. The clearer your income path, the fewer questions the bank will have. For example, when opening an account and depositing over 500,000 euros for one of our clients, we prepared and submitted detailed income reports for the last 7+ years. These reports included documentation from his companies and statements from personal and corporate accounts to demonstrate the movement of funds by the law. After translating all the information into Spanish, we created income and expense tables for the entire period and calculated the actual balance of the client's funds. This helped the Spanish bankers and the compliance department better understand the foreign declarations and see the actual income in euros.
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Choosing the Right Bank
Not all banks are equally strict regarding compliance procedures. It is advisable to consider several banks and choose one that has more experience working with foreign clients and offers more flexible terms. Some may provide specialized products for non-residents or foreign companies, which can facilitate the account opening process.
Conclusion
Opening a bank account in Spain requires a careful approach to compliance issues. This is not only a legal requirement but also an important step in ensuring the reliability and transparency of your business. By consulting with the experts at Laduchi Consult, you will receive comprehensive support throughout all stages of the process, allowing you to focus on growing your business without worrying about the complexities associated with compliance.
Please note that all materials contained on this site have been prepared for informational purposes only. This data does not constitute or replace professional financial, legal or tax advice. The information is general in nature and does not take into account your personal circumstances. Always seek professional advice from officially licensed professionals: financial advisors, accountants and lawyers.
