United States is still one of the preferred destination for most of the Startup founders in the world,thanks to the VC ecosystem, banking, payment processing Industry, Ease of doing business, simplified bureaucracy, deep penetration of democratic values in the state and Rule of Law.
Many entrepreneurs and Startup founders Incorporate in the US as it is the most preferred destination by the Venture Capitalists. Also, company formation process is quite simply in the US as compared to many developing countries
However, bank account opening especially for the foreign founders is quite difficult as banks do not want to take any risk in due diligence and insists verification of documents in person especially after US PATRIOT ACT became effective. Hence, opening bank account remotely was not possible.
For past few couple of years, due to the rise in Fintech companies, BaaS APIs providers and thanks to technology, Fintech banks have started challenging traditional banks in the US and are also allowing Foreign Founders open bank account remotely without entering into the US.
Here are some of the best Foreign Founders friendly Fintech Companies / Real Banks that allows opening bank accounts remotely right from your laptop:
Mercury is a popular online only bank built for Startups and is built specifically with tech startups in mind. It provides banking that scales with your company. Mercury bank is an up-and-comer backed by serious names. Their investors include Adreesen Horowitz, L2 Ventures, Svangel, Quiet Ventures and even individual investors from YCombinator, Instacart, AngelList, Airtable among others.
Mercury offers the following features with its bank account
- A checking account
- A savings bank account with 1-2% earnings
- Debit card
- ACH payments
- Check payments
- Domestic and International wire transfers
- FDIC insured deposits
How much does Mercury cost?
- No minimum balance
- No opening account fees
- No monthly fees
- Free ACH Transfers
- Free Wires (Both Domestic as well as International)
Mercury offers both business checking as well as savings accounts and uses Evolve Bank & Trust as its banking partner. Your money is insured under FDIC insurance up to $250000.
Opening bank account with Mercury is a very easy and requires only EIN along with company formation documents and Passport. SSN is optional.
2. Brex Cash
Brex Cash is a bank account alternative that companies of any size can use to deposit cash, send payments, and track spend.
Banks in the US charge for Credit / Debit via ACH, WIRES etc. Brex Cash offers all of these payment methods along with unlimited debit / credits free of cost. In addition, no minimum balance requirement, no monthly maintenance fess and zero account opening balance is required to open cash management account.
Brex Cash is not a bank account but more than a bank account with lot of freebies and credits funds faster as compared to all other Fintech banks as well as traditional banks. It offers single checking account which can be used as business checking (insured by FDIC using its partner bank Radius bank) as well as money market account.
Brex also provides credit card with one day settlement with Brex Cash account and the credit limit is 80% of the Cash account balance available at the time of initiating the card transaction.
Brex One Card Offers
- 8x on Rideshre
- 5x on Brex travel
- 4x on Restaurants
- 3x on Recurring software
- 1x on Everything else
3. Grasshopper Bank
Grasshopper Bank is a truly digital bank focusing on “Global Innovation Economy.” Having already secured banking license from the OCC, it has an edge over popular fintech banks like Mercury and Brex.
Grasshopper Bank offers free checking account without any minimum deposit or minimum balance requirements, no monthly maintenance fess or hidden fees, free ACH transfers, free wires both domestic as well as international(in USD) under their “Free Banking for Life” initiative.
In addition to the normal business checking account, they also offer venture debt, LCs, Money Market accounts, credit cards etc. Grasshopper Bank is, therefore, a real competitor to Silicon Valley Bank also known as SVB.
Relay Financial is an alternative to Mercury but only offers Business Checking and not savings. Relayfi uses the same banking partner for BaaS APIs which is used by Mercury i.e Evolve Bank & Trust. However, sending International wires costs at least $50 and currently they only open accounts through their Documents filing business partners.
5. Silicon Valley Bank
One of the very first bank focusing on the Startups ecosystem and VC funded Startups. Almost 50% of the Venture Capital backed Startups use SVB.
SVB will only open accounts if you have already raised some funding generally Seed round and further from VCs.
Also, SVB will cost you money and generally is not free. Startups having raised series A funding etc and those who requires cheque books, Venture Debts, Introductions to VCs in order to raise funds in further rounds i.e Series A and further, LCs, Corporate credit cards etc would need SVB in the long run.
SVB is an ideal banking partner for VC backed Startups.
Finding the right banking partner is not an easy task and founders should pay attention in choosing them as banking is the backbone of every business.
Fintech banks would be an ideal choice for most of the early stage startups and above list of best business banks would make your life easier.