KYC (know your customer) and KYB (know your business) are the customer checks that a bank, EMI, payment provider or registered agent must carry out before starting to provide services. For a company, including an offshore one, they check the firm itself, the entire chain of owners down to individuals, the managers, the origin of the money and whether the business is real. Most delays in opening an account come from an incomplete or inconsistent document package, so it is worth putting it together in advance.
What the international standard requires
The basis is set by the FATF Recommendations, which countries transpose into national law. Recommendation 10 lists four mandatory customer due diligence measures:
- Identify the customer and verify their identity using reliable, independent documents or data.
- Identify the beneficial owner and take reasonable measures to verify them; for companies, understand the ownership and control structure.
- Understand the purpose and intended nature of the business relationship.
- Conduct ongoing monitoring of the relationship and transactions, checking the source of funds where necessary.
Due diligence is mandatory when establishing a business relationship, for occasional transactions above USD/EUR 15,000, when money laundering is suspected and when there are doubts about previously obtained data. For foreign politically exposed persons (PEPs), Recommendation 12 adds senior management approval, establishing the source of wealth and the source of funds, and enhanced monitoring. The same measures apply to family members and close associates of PEPs.
In the European Union, from July 10, 2027, the single Regulation (EU) 2024/1624 on anti-money laundering will start to apply; it is directly applicable in all EU countries and will set uniform customer due diligence rules.
The company's document package
The set differs between providers, but the core is the same:
- Corporate documents: certificate of incorporation, memorandum and articles of association, registers of members and directors, a recent extract from the register or a certificate of good standing / incumbency, resolutions appointing signatories.
- Ownership structure: a chart down to each individual with percentages, the corporate documents of each intermediate entity, and trust and nominee agreements, if any.
- People: passports and proof of address of the beneficial owners, directors and signatories. How recent the documents must be and the requirements for certification and translation are set by the specific bank.
- Business: a description of the model, contracts with key clients and suppliers, invoices, a website, and licenses for regulated activities.
- Money: source of funds for the first incoming payments and the beneficial owner's source of wealth, if the risk profile requires it.
- Taxes: a self-certification of the tax residency of the company and its controlling persons under the OECD CRS. Financial institutions rely on it when opening an account for an entity.
Source of funds explains the origin of the specific money in the account; source of wealth explains how the beneficial owner built up their wealth overall. These are different checks, and for large capital contributions or loans from the owner the bank usually requests both.
Registrars check identity too
KYC also applies to government registers. In the United Kingdom, since November 18, 2025, new directors verify their identity before the company is registered or before their appointment, existing directors confirm it with their next annual confirmation statement, and people with significant control (PSCs) do so within the set 14-day window. For those setting up a UK Ltd, this is a separate step before the bank.
A business scenario
A partnership structure with three levels of ownership sends the bank only the certificate of its subsidiary. After the bank asks for the UBO, it turns out that the intermediate entities are not documented, and onboarding stops until the missing documents are obtained. An ownership chart prepared in advance, with documents for each entity, settles this question at the first request. How to identify beneficial owners by ownership and by control is covered in our article on UBO disclosure.
Common mistakes
- Concealing the real industry or clients' countries: the discrepancy with actual payments surfaces during monitoring and leads to the account being closed even after it has been opened.
- Giving different versions of the structure to the bank, the EMI and the agent.
- Submitting documents to the bank without translation and certification when it requires them.
- Forgetting to update KYC when a director, shareholdings or the address change.
How Offshora helps
The step-by-step review process and a plan in case of refusal are in the guide to a bank account for a foreign company. Common misconceptions about getting an account after incorporation are covered in myths about offshore bank accounts.
Offshora puts together a single KYC package for an offshore company tailored to a specific bank or payment provider: the ownership chart, a description of the business and supporting documents. How account opening works is described on the page bank account for an offshore company. If you need to choose a provider, compare an EMI and a bank and submit a request describing the structure and the expected payments.
Tell us about your task, and we will propose a jurisdiction, the scope of services and the order of work.
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