U.S. Bank Account Options for Foreign Sellers
A U.S. Bank account will save you money when it comes to remitting U.S. sales tax. Are you able to do Business in the U.S. without a U.S. bank account? You absolutely can do business without a U.S. bank account, but it will cost you more in fees without one.
Most use Payoneer (or similar options) to move their money from Amazon back to their home country, which saves approximately 50% in fees. However, this does not provide a U.S. business debit card, or the ability to do an ACH pull.
The Steps to Open a U.S. Bank Account are Changing. We are here to help.
Foreign sellers need to set up several additional steps to have success when selling in the U.S.
As a foreign seller on an e-commerce platform such as Amazon, it is your responsibility to collect and remit sales tax in the states where you have nexus.
Because of marketplace nexus, Amazon is collecting and remitting in 39 of the 41 marketplace nexus states. This leaves four states you may have sale tax nexus and need to collect and remit sales tax.
In order to collect and remit, one is to remit or give the sales tax you collect back to the state and file a state sales tax return.
There are several sales tax remitting companies that have software to automate this process. BUT in order for them to automate the process, you MUST have a US bank account for an ACH (automatic withdrawal). If you do not have a US bank account, you will have to manually file your own sales tax returns, or work with a company or tax firm that allows you to wire your sales tax and file on your behalf.
The unfortunate challenge with these companies is that you will end up paying DOUBLE the fees to file a sales tax return.
Since profits, is the key to any business, having a U.S. bank account for your business, you will save about $300 to $800K PER MONTH when it comes to remitting sales tax to 30 or more states where you have economic nexus (example a Shopify seller who passed sales transaction thresholds or transactions.
February 2020 Update: This has now changed for Amazon sellers. Amazon collects sales tax now in 39 of the 41 marketplace nexus states. There are about 4 FBA states where Amazon is not collecting where you will need to potentially collect and remit sales tax (assuming you have FBA stock in these states). This means having a US bank account will make it more efficient to pay your state sales taxes, but if you only need to do this for a few states, you may not need to form a US company in order to open a U.S. bank account.
Sales Tax Remitting Costs without a U.S. Bank Account
Here is the math. Most remitting companies charge between $20 to $30 to file a sales tax return per state when they do an ACH pull from your U.S. bank account. If you do not have a U.S. bank account, the filing will not be automatic and it requires a manual process that costs more. The cost per return without a U.S. bank account will range from $50 to $100 per return. Let’s use a spread of $30 per state ($20 vs $50 per return). That is $30 X (the number of states with nexus) x reporting frequency per year.
Travel is Usually Required, BUT Now We have an Option Without Travel*
Establishing a U.S. bank account requires travel to the U.S. You can always do this on your own during your next trip for a personal account, unfortunately not for a business account. But why is that?
The U.S. banks rules have changed a lot over the last 12 months. Now, establishing a bank account for a Foreign entity is virtually impossible. It can only be set up with a U.S. entity.
*As of February 2020, we now have an option to establish a US bank account on a US entity WITHOUT travel!
Since 1997, our sister company, NCP, has set up hundreds of bank accounts for foreign clients with various banking relationships. The rules are constantly changing, along with banks, contacts, and processes.
The Window with our Administration is Closing
Fortunately, there is an option, but the WINDOW is CLOSING to Open a U.S. Bank Account (especially with our current Administration cracking down on everything from immigration to tariffs on imports).
More U.S. banks either require an office site inspection or a utility bill to your personal address. This address must be different from your “office” address.
Today, you must have a U.S. entity but it must be set up correctly with a lease agreement, an operating agreement that matches the legal and tax structure, and the manager or officer to be in person at the bank to sign. As we also mentioned we do have a U.S. banking option that does NOT required travel, but it may not last long.
Learn more at this page with our sister company, NCP, about establishing a US entity and banking support.
If you are selling in your own personal name and need a bank account, that is simple to create. In that specific case, you do not need our help.
If you do need our help with the more complex processes, reach out to [email protected] and we will email you our most updated U.S. banking solutions and fees.
