How can a foreign citizen choose a bank for opening a company accountant in Russia?

To start a business, in addition to registering the company, it is necessary to open a company account through which all payments under the company's contracts will be processed, salaries will be paid to employees, taxes will be collected, and profits will be credited. Therefore, it is essential to choose a good bank offering optimal rates for the specific type of business.

Let's consider which bank to choose and the specifics of transfers from Russia abroad in 2024.

How to choose a bank to open a company account and conduct business?

When choosing a bank for opening a company account in Russia, a foreign citizen needs to consider the sanction restrictions affecting the ability to conduct international transactions. However, a bank being under sanctions does not always mean it is a poor choice for business, as many of Russia's major banks have been sanctioned but receive substantial state support, ensuring their stability.

Out of 13 systemically important banks in Russia, which account for more than 75% of the total assets of the banking sector, only 2 banks are not included in the sanctions lists, but these restrictions do not significantly affect the activities of the other 11 banks.

In 2024, more than 50 Russian banks are under sanctions, here are the largest ones: Sberbank, Gazprombank, Alfa-Bank, Sovcombank, VTB, Rosselkhozbank, "FC Otkritie", T-Bank (formerly Tinkoff Bank), Promsvyazbank and others. Despite the sanction restrictions, these banks are the largest in Russia, providing a wide range of services for small, medium, and large businesses.

Here are some examples of banks that are not under sanctions: Raiffeisenbank, UniCredit Bank, OTP Bank, Credit Europe Bank, "Renaissance Credit", "Peresvet", Bank Dom.RF and others.

The choice of bank for opening a company account depends on the specific nature of the business, service requirements, and planned operations.

Here are some factors to consider when choosing a bank:

• Service conditions: pay attention to account maintenance fees, payment processing costs and conditions, and the availability of special offers for businesses;
• Convenience and accessibility: check the convenience of online banking and mobile applications, as well as the presence of branches and ATMs in the region where the business operates;
• Business support: some banks offer additional business services, such as accounting services, credit lines, payroll project management, etc.;
• Reputation and reliability: familiarize yourself with the bank's reviews, financial stability, and customer interaction history.

FYI: please note that the choice of a specific bank is entirely up to the founders and participants of the company. They decide which bank to work with in the future.

What is SWIFT and how to work without it in Russia?

SWIFT is an international system for secure and standardized financial messaging between banks. Despite some Russian banks being disconnected from SWIFT in 2022 due to sanctions, alternative methods for international transactions remain viable.

Alternative methods:

• Other payment Systems: such as the Financial Messaging System of the Bank of Russia (SPFS), INSTEX for transactions with Iran, and CIPS for transactions with China and other.
• Correspondent accounts: using accounts in foreign banks for payments.
• Bank partnerships: agreements with foreign banks for alternative transfer routes. The Russian State Duma is considering allowing foreign banks to open branches in Russia, which could facilitate international transactions.

FYI: disconnection from SWIFT does not affect transfers within Russia.

How to transfer money abroad: a guide for companies.

When establishing a company operating internationally, it is crucial to understand how to properly transfer funds abroad. This guide will consider the example of transferring money to China, taking into account the potential sanction status of the sending or receiving bank.

Procedure:

• Transfers via SWIFT. If neither the sending bank nor the receiving bank is under sanctions, the process of transferring money to China can be conducted using the standard SWIFT system. Let us recall that SWIFT is an international system that provides a secure and standardized exchange of financial messages between banks. It is the most common method for conducting international money transfers, including transfers to China.
• Dealing with sanctioned banks. If a bank is under sanctions, the ability to use SWIFT may be restricted. However, this does not preclude the possibility of transferring funds. It is important to first check with the bank whether any alternative transfer systems are available, such as the SPFS (System for Transfer of Financial Messages) or CIPS (China International Payment System). These systems can provide alternative routes for transferring funds to China.
• Interaction with the receiving bank. Before sending money, it is also important to communicate with the receiving bank in China. Ensure that they can accept the funds and process the transaction, especially if an alternative transfer system is being used. Some banks may have restrictions or additional requirements for processing such transfers, making prior agreement on details a critically important step.
• Currency control. When conducting international transfers, it is necessary to consider currency control regulations. In Russia, currency control is enforced to prevent illegal transactions and ensure compliance with financial legislation. 
  
  Companies must provide documents in advance that confirm the legality of the transfer, such as contracts, invoices, statements of work completed or services provided, waybills, and other financial documents. Transferring money to China through sanctioned banks or alternative systems may result in heightened currency control measures. This could involve providing additional documents and confirmations regarding the purpose of the transfer.
  
  The bank processing the transfer may also require further verification from the recipient company in China. These measures are aimed at preventing money laundering and financing of illegal activities. Companies must be prepared to provide complete and transparent information about the nature and purpose of the transfer.

Transferring money abroad for companies can be a complex process, especially when dealing with sanctioned banks. However, with proper planning and cooperation with both sending and receiving banks, as well as compliance with currency control regulations, companies can effectively manage international payments. It is important to stay informed about current sanction regimes and legal requirements to avoid delays and legal issues in the transfer of funds.