For founders with an LLC in the United States, a Wise account is an interesting alternative to a traditional business account. But what exactly is a Wise account? Unlike some traditional banks, Wise lets you open an account for your company without long trips to a branch, and your LLC gets all the advantages of a multi-currency account.
A Wise account for your LLC: the advantages
One of the conditions for a zero-tax LLC in the United States is that it has no permanent establishment in the country. That does not mean you need no account for your company and for the money that flows through your business. A business account helps, for example, when you pay service providers in the US and can do so in US dollars from your business account. Which providers suit an LLC and how account opening works is summed up in our banking guide for the US LLC.
Payments in US dollars: the multi-currency account and its advantages
Describing the advantages of its business account, the financial service provider Wise explains that it gives you account details for up to ten different currencies.
So the multi-currency account is interesting not only for payments in US dollars but also for paying out and receiving money in other countries and, where needed, in another currency. For founders who have a zero-tax LLC in the United States but no permanent establishment there and who live abroad, a Wise business account is especially practical. Perpetual travellers and digital nomads who move around the world and are looking for an account that travels with them also benefit from the Wise multi-currency account.
Opening a business account made easy
To open a Wise Business account, you first register your company, just as you would with any normal bank.
That creates the business account within a few minutes. Before the first payment or transfer can go through, however, the company has to be verified.
For verification, you submit all the information about the managers and the LLC that any other bank account would require as well. That includes, for example, the registration number, the location, the industry, and the country of residence and date of birth of the managers or the company's responsible representatives. Wise branch locations do not matter here: you are independent of any physical presence of the bank.
Your company's website and social media presence are also requested for a Wise business account. Experience shows this should not be a problem, though.
After all, a business today is hardly competitive without a website, LinkedIn and the like, and that kind of presence underlines the credibility of the LLC and of its owners.
Once all the information is in, the Wise team carries out the verification, which is usually completed within about ten days. After that, the account can be used for transfers and everything else.
Transfer fees and more
Business accounts at Wise come with certain fees for the customer. Wise sets out how much they are in an overview. Wise says it is transparent in every case and states that there are no hidden costs on its accounts and products. Fees can apply to transfers, but receiving an amount in a foreign currency can also cost a fee. So check the prices before you decide on a business account.
When Wise closes your business account
Wise is currently closing business accounts in large numbers, and it strikingly often hits US LLC owners and digital nomads. The process is always the same. One email, one sentence, the account is deactivated. Wise gives no reason, and there is no one you could talk to about it. That is expressly no accusation against you. A business that runs across several countries, several currencies and changing residences is hard for Wise to classify, and when in doubt the provider parts ways with the customer rather than with the risk. Long-standing accounts are no protection either: Sebastian is affected himself, with accounts that are ten years old.
Your money is neither lost nor frozen. Wise pays out the balance to a bank account you name. It just takes up to 21 days. That is exactly where the damage lies, and its name is not loss but standstill: three weeks without incoming client payments, without payments to service providers, without a card. That is why every Wise account needs a working second bank account that you can name in an emergency.
One account is no account in an emergency
The lesson is not a Wise question but basic business practice: never run just one account. Next to the account your daily business runs through, you need a second one with a different provider that can take over immediately in an emergency. For a zero-tax LLC, three routes are the main options:
- Mercury: the obvious second address for a US LLC, with real US bank details through partner banks. Requires a real trading address with proof, not a Registered Agent address.
- Relay: also a US neobank, but it requires an SSN or ITIN from non-US residents. With an ITIN, a good choice, not least because of the high FDIC coverage through its partner bank.
- A real US bank: the most demanding route, usually with an in-person appointment in the US, but in return an FDIC-insured bank account. The US does not exchange data under the OECD CRS, unlike European providers such as Wise.
Which provider requires what, and how account opening works in detail, is in the banking guide for the US LLC.
Do you have other questions about your business in the US, about multi-currency accounts or about an account with a neobank? Want to know more about putting a zero-tax LLC into practice, about taxes or about a residence abroad? Then don't hesitate to get in touch. We are happy to help.
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