Question: I am not a resident or citizen of the United States. I want to form a limited liability company in the U.S. to own and operate a business or to own investment real estate. How do I open a bank account in the name of the LLC?
Answer: I form a lot of Arizona LLCs for people who are not residents or citizens of the United States, aka nonresident aliens. Opening a US bank account for the US LLC can be a very big problem. The US Patriot Act imposes substantial limits and restrictions on the ability of a US bank with respect to creating a US bank account for a people and entities.
The number one new account requirement is that the bank must positively identify the person who seeks to open the bank account. Positive ID means two things:
- Sufficient documentation such as a passport to prove the identity of the person who seeks to open the bank account, and
- The presence of the person who seeks to open the bank account personally in front of the bank employee who is opening the account.
The banks seem to be getting tougher with respect to the personal ID requirement. This week I met with a nonresident alien client from Australia who opened two LLC bank accounts with Wells Fargo for his two Arizona LLCs two years ago. He did come to Phoenix to present himself to the bank personnel in order to open the accounts.
The client told me that he came to Phoenix this week because Wells Fargo notified him that it was closing ALL LLC BANK ACCOUNTS IN THE US IF THE LLC IS OWNED BY A NONRESIDENT ALIEN OR ALIENS. Wells Fargo closed his LLC bank accounts, but did allow him to open a personal bank account while he was present at the bank.
If somebody tells you that they know of a bank that will open an LLC bank account for a nonresident alien without the need for the nonresident alien satisfying the two requirements described above, don’t buy it. I personally know that MidFirst Bank and Commerica Bank had opened LLC bank accounts without requiring the nonresident alien owner of the LLC to satisfy the two requirements listed above. When supervisors found out about the accounts, they closed the accounts and fired the bank officer.
One potential solution to the problem is for the LLC to have a member or manager that is a US citizen or legal resident. That person could open a bank account in the US for the LLC. However, this solution creates its own set of problems. The person who opens the bank account is taking a risk that if the LLC is involved with anything that is illegal he or she could be in big trouble, perhaps criminal trouble.