Setting up a company is only the first step. Before your business can start operating, you will usually need to open a business account. Depending on your business model and requirements, this can be done with a traditional bank or an Electronic Money Institution (EMI), which may offer a suitable alternative to a bank.
This is often the stage where businesses encounter unexpected challenges. However, a rejected application does not necessarily mean there is a problem with your business. When assessing an application, financial institutions consider a range of factors, including the nature of your business, your business model, ownership structure, expected transaction flows and compliance requirements.
Why can an application be declined?
Every financial institution applies its own risk assessment criteria, but the most common reasons include:
- an insufficiently explained business activity;
- inadequate information about expected transaction flows;
- a complex shareholder or Ultimate Beneficial Owner (UBO) structure;
- incomplete supporting documentation;
- a mismatch between your business model and the institution’s risk appetite.
A rejection from one financial institution does not necessarily mean that another institution will reach the same conclusion.
Why does choosing the right financial institution matter?
Not all banks and Electronic Money Institutions serve the same types of clients. Some specialise in international trade, while others focus on technology companies, e-commerce businesses or other specific business models.
For this reason, choosing the right jurisdiction for your company is only part of the process. Selecting a financial institution whose requirements and services match your business model is equally important.
For example, a company engaged in international trade may be assessed differently from a business providing services in its local market. In some cases, an Electronic Money Institution may provide a faster and more suitable solution than a traditional bank.
How can you reduce the risk of rejection?
Before submitting an application, it is worth considering whether:
- your company structure is appropriate for the planned business activity;
- you have selected the most suitable financial institution;
- all required documentation has been properly prepared;
- your business model is clearly explained and supported.
Choosing the wrong financial institution can result in a rejected application, requiring the entire process to be repeated. This often leads to unnecessary delays and additional costs.
In practice, businesses often approach a financial institution first and only start looking for the reasons after receiving a rejection. Many of these situations can be avoided by assessing the company structure, business model and choice of financial institution before submitting an application.
How can you improve your chances of success?
Opening a business account is not only about completing an application. It also involves choosing a financial institution whose requirements are aligned with your business model.
With many years of experience, Creada helps clients assess their business activity, company structure and other factors that may influence a financial institution’s decision. Based on each client’s individual circumstances, we help identify the most suitable banking or EMI solution and, where appropriate, recommend alternative options.
Our experience also enables us to assist in more complex situations, including cases involving sophisticated corporate structures, where financial institutions in jurisdictions such as Switzerland or Liechtenstein may be more appropriate. We also assist businesses requiring payments in roubles, where such transactions are permitted under applicable sanctions and regulatory requirements, as well as companies operating in the crypto asset sector.
Careful preparation can significantly reduce the risk of rejection, avoid unnecessary resubmissions and help businesses start operating more efficiently.
In our experience, a successful business account application starts long before you approach a financial institution—it begins with proper preparation and a thorough assessment of your business.
