South Africa corporate bank accounts in 2021

business formation in South AfricaSince 2003, Healy Consultants Group PLC helps multi-national Clients open multi-currency corporate bank accounts in South Africa, both for local and overseas companies.

Without bank signatory travel, our team will project manage the During the engagement, our team will project manage the multi-currency corporate bank account opening process, including i) contacting multiple banking institutions to secure their confirmation of interest for our Client’s business; and ii) prepare a quality corporate bank account opening application package for our Client’s review and signature.

Four weeks following engagement commencement, we will provide our Client with a corporate bank account number and if required, even assist activate internet banking on behalf of our Client.

  • Table of South Africa banking problems and solutions

    NO.Potential South African banking problemSolutions
    1.

    There is no bank deposit insurance scheme in South Africa yet. If a bank fails, depositors lose their money.

    For your South African LLC, Healy Consultants Group PLC will open a multi-currency corporate bank account in the USA or EU or Singapore;

    2.

    While some international banks offer multicurrency accounts, they often require Clients to open a South African Rand account before opening accounts in other currencies.

    Payments to and from South African beneficiaries to be done in the local currency. For example, local Suppliers to be paid in Rand.

    Open a Rand corporate bank account together with a US$, € and £ corporate bank account, along with e-banking and local Visa debit cards.

    Clients who prefer not to open a Rand account can choose to open separate foreign currency accounts, if required.

    3.

    Bank requests foreign directors and bank signatories to travel for a one-hour interview before account numbers are issued.

    Healy Consultants Group PLC will relentlessly negotiate with the bank to secure a travel waiver and open the corporate account through a combination of video verification and document notarization.

    If travel is inevitable, Healy Consultants Group PLC Client travel policy will apply (click link). Our staff will organise the bank meeting in our South African affiliates’ office and assist our Client during the bank interview(s).

    4.

    Bank refuses to onboard a foreign company which does not have a physical office in South Africa, or South African customers or suppliers.

    Healy Consultants Group PLC will open an international corporate bank account with a top tier bank outside South Africa (e g Germany, Liechtenstein, Austria, Bulgaria, USA, Australia, London, South America or Dubai).

    Healy Consultants Group PLC has a guaranteed corporate bank account approval policy.

    5.

    Global banks continue to tighten corporate bank account opening procedures, their internal compliance departments completing more thorough due diligence of Clients. Consequently, our Clients should expect bank account approval to take up to six weeks. Furthermore, banks now require evidence of proof of business in the country where the company bank account will be, including sales contracts or lease agreement.

    If our Client requires a bank account at short notice, we recommend an immediate South Africa solution (plus already-approved South African corporate bank account).

    6.

    The majority of South African banks only provide telephone support during South African business hours. This is inconvenient for multi-national Clients in Australia or USA.

    Healy Consultants Group PLC staff assist our multi-national Clients with bank communication, regardless of time zones.

  • The South African banking sector

    Healy Consultants Group PLC’s summary view

    • South Africa’s banking sector is dominated by the five banks, i) Standard Bank, ii) FirstRand, iii) Absa., iv) Nedbank, and v) Investec, which collectively hold about 90% of the total banking sector assets.
    • The COVID 19 pandemic has severely hit South Africa’s economic growth, and GDP is expected to remain below 2019 levels even in 2022. Local businesses will go bankrupt, loan defaults will cause local banks to go bankrupt, and unemployment will increase. Bank and country ratings are likely to fall.
    • South Africa’s sovereign credit ratings in November 2020 are i) BB- (Standard and Poor) ii) Ba2 (Moody’s) and iii) BB- (Fitch).
    • Fitch has downgraded its outlook for South African banks to negative for 2021 reflecting a continued rise in government debt/GDP and a persistent weak trend in the GDP growth rate.
    • CRS obligations are imposed on South African financial institutions and they participate in the automatic exchange of financial account information among Organisation for Economic Cooperation and Development (OECD) jurisdictions.
    • Foreign exchange controls in South Africa are governed by the South African Reserve Bank. There are limits on the amount of money that can be transferred out of South Africa, and all funds transferred into or out of South Africa must be declared to the South African Reserve Bank.
    • The upcoming Financial Sector Laws Amendment Bill in South Africa introduce guidelines to deal with a failing bank. The bill also has provisions for providing an explicit, industry-funded deposit insurance scheme to protect qualifying depositors’ funds up to a specified limit when a bank fails.
    • Overall, Healy Consultants Group PLC recommends our multi-national Clients minimise the funds held with South African banks.
  • Key information on the South Africa banking sector

    • The onset of the Covid-19 pandemic led to unprecedented interest rate cuts by the South African Reserve Bank, together with higher credit losses and lower transaction volumes.
    • Large banks are closing down or downsizing branches to control rising operating costs, and in response to customers’ increasing use of online and mobile banking services.
    • New digital banks are emerging, such as Discovery Bank, Bank Zero and TymeBank. These and mobile money apps and services provided by telecoms and retail companies will force commercial banks to modernise their products and services.
    • Some reasons South African banks give for rejecting new accounts include i) due to security and compliance reasons they are unable to verify new Clients based overseas ii) only opening accounts for wholly-owned by South African companies (i e they will not onboard a company which is beneficially owned by companies not registered in South Africa) and iii) need operations in South Africa.
    • On average, South African banks take two months to issue account numbers and e-banking access.
    • Most South Africa bank branch staff speak English, and correspondence and online banking etc. is in English.
    • It is important that our Clients are aware of their corporate and legal obligations in South Africa and that they timely fulfil the same. Let us know if you require Healy Consultants Group PLC’s assistance to timely and efficiently complete your legal and corporate responsibilities.
  • Healy Consultants Group PLC fees to help open a corporate bank account in South Africa

    • Healy Consultants Group PLC guarantees South Africa company bank account approval. Our fees for different banking services include:
      South Africa banking taskOur Client travelsUS$
      South Africa bank account bundled with company incorporationNo4,950
      South Africa bank account for a foreign companyNo5,950
      South Africa bank account for a South African companyNo5,950
      South Africa bank account for high-risk companyNo7,950
      South Africa personal bank accountNo4,000
    • Our multi-currency corporate bank account opening fees cover the following:
      • At the time of company incorporation, our team determining with our Client the optimal bank solution, comparing local and international corporate bank account options.
      • Creating a quality business plan for the South African banks, explaining the purpose of the business and future banking transactions.
      • Securing welcome emails from multiple South African banks, inviting our Client to submit a multi-currency corporate bank account application.
      • Healy Consultants Group PLC’s Banking Team completing, on our Client’s behalf, the multi-currency corporate bank account application forms and collating Know Your Customer (KYC) due diligence documents.
      • Following successful completion of the above, the bank officer submitting a complete potential customer file to the bank Legal and Compliance Department. (Note that the bank In-house Legal and Compliance Department may revert multiple times for additional documentation and information from i) each bank signatory / director / UBOs of the companies as well as ii) our Client’s business and transactions).
      • If a bank declines to board our Client’s business, Healy Consultants Group PLC immediately informing our Client and actioning back-up banking solutions.
      • In an average of two months following application submission, Healy Consultants Group PLC securing multiple multi-currency corporate bank account numbers for our Client’s South African company.
      • Thereafter, Healy Consultants Group PLC, or the banks, couriering mails and e-banking tokens to the bank signatory, who is expected to activate the internet bank account, with Healy Consultants Group PLC’s assistance if needed.
      • After corporate bank account numbers are secured and, if required, Healy Consultants Group PLC assisting our Client to appoint more new shareholders and directors. However, the banks will usually only approve them as bank signatory after a face-to-face meeting and the review and approval of a bank signatory application.

Frequently asked questions

Conclusion

Contact us for assistance with opening a South Africa corporate bank account.

Contact us

For additional information on our company formation services in South Africa, please contact our in-house country expert, Mr. Henry James Beck, directly:
Consultant at HC - henry
  • Mr. Henry James Beck
  • Client Engagements Manager
  • Contact me!
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