Creating a commercial account for your LLC type trading vehicle

TraDaToR

TraDaToR

Sometimes that thing gets tough with the new regulations...

5 years ago, when I moved to Switzerland, I needed an account to create my LLC and start trading. I called one of the most famous bank and said I wanted a corporate account :

"Great! What are you doing?"
" I am trading commodities "
"Wait. I am asking my boss...No, your activity doesn't fit the principles of our bank"

Fast forward 5 years. I am in Spain and go to the bank for the same thing. Now, they just make me wait 2 weeks, send them any possible document proving my activity has nothing to do with money laundering for another 2 weeks ,and finally they say "no, your activity doesn't fit the principles of our bank".

I am getting scared about our future. Not the actual trading and P§L part, the ability to simply fund a trading account and trade part...:banghead::(

Just a thought.
 
Yes, that's actually sometimes trickier than creating the brokerage account, because the commercial account won't generate much revenues for the bankers and can potentially create them a lot of compliance problems with money flowing from all over the world.
 
There are unintended consequences of most regulation. Often the costs to society of the unintended consequences are bigger than the costs to society of whatever the regulation is intended to prevent. E.g. FATCA worldwide is estimated to cost 1.500 – 2.500 times as much as the extra tax revenue generated.

Banks incur heavy costs to comply with "know your customer" and "anti-money laundering" regulation. Banks often do not make any profit on traders because traders understandably want to trade using online brokers because online brokers are much cheaper and much better than the banks.

Consequently, banks increasingly refuse to open accounts for traders – especially corporate accounts as described by the OP.

I think online brokers will increasingly be forced by market forces to compete on offering e.g. debit cards, because it is annoying and time-consuming to continuously document the source of the money when wiring funds to banks. Online brokers know the source of money created through trading, so it is cheaper for them to verify the source.
 
Last edited:
My guess is there's something about your specific situation that's raising a red flag. If you're a US citizen, European banks often won't want to deal with you due to compliance headaches (or so I've heard - I had no trouble opening a business account in the Netherlands a few years ago).

"Commodities trading" also sounds exotic and risky, you might want to say something like "financial investment" or property investment, etc. You could also pay a local law firm a few thousand euro to manage the process for you, as they can navigate local procedural quirks and generally make you seem more reputable.
 
No red flag. I am a EU citizen. I also have a local asesoramiento doing the stuff, but when it goes to compliance, it seems they don't even understand what I do. I feel like Maverick is right on point. But well... it's just one bank...We will see.
 
the banks are actually worried someone other than themselves will be laundering drug money. it's a fact when i was living in florida several banks i did business with were shutdown for just such by the feds.

have a buddy that had a started a fund in london it took him years for a bank account. he moved to switzerland and i imagine he will have the same trouble as well. banking has gone to shit since bush did the patriot act which is anything but.
 
TraDaToR said:
No red flag. I am a EU citizen. I also have a local asesoramiento doing the stuff, but when it goes to compliance, it seems they don't even understand what I do. I feel like Maverick is right on point. But well... it's just one bank...We will see.
More...
A little tangential to the topic so I apologize but you seem like a good person to ask...Do they have online brokers like ETrade, Schwab... in Spain. Not U.S. brokers with an office in Madrid but actual Spanish companies? Also interested in if there are any in Portugal, if you would happen to know that off the top of your head? My Spanish isn't good enough to do good internet searches and my Portuguese is non-existent, so I was unsuccessful in my search with Google. Thanks.
 
Quick update : Finally found a bank here. Got formally rejected by one, 3 others said they weren't interested just after explaining my activity and one other should have worked.

So here is the state of the banking world, I lost 1 month just finding a bank that would accept to make international wires to other over regulated entities like Interactive Brokers in the UK or ADMIS in the US... I am not asking for a loan you know... I am just begging you to accept my hard earned dollars transferred to you as a 0.01 bid/ask spread on EURUSD when I bring back money...

Meanwhile, I can certainly find a broker to accept a 20 lots ES trade on a 10K account...
 
You must log in or register to reply here.
Back
Top