Can citizens/residents of foreign countries open U.S. bank accounts remotely?

Factual Questions
1

I have a friend who is a citizen and resident of Finland. My friend co-owns a rental property in CA. Last year, my friend received an income refund check from the IRS for about $1000. The problem is that my friend has been unable to cash or deposit this check in Finland. Checks – let alone foreign checks – are not used or accepted there, and haven’t been in over 25 years.

On my friend’s behalf, I contacted the IRS and explained the situation. They wrote back saying the only thing they could suggest was that my friend open a U.S. bank account online, arrange with the IRS to have the funds direct deposited into that account, and then wire transfer those funds into her Finnish bank account. They also provided links to dozens of FDIC-insured banks, big and small, which allow for the creation of accounts remotely.

I have contacted more than a dozen of these (and other) banks with no success in finding one that would let my friend open an account. Small banks lack the resources to verify information about overseas customers. Big banks (e.g., BoA, Citibank, Chase, HSBC, etc.) require two forms of I.D.: Social Security number (which my friend does have) and proof of U.S. residency (which obviously cannot be provided). I explored the possibilities of my friend using my address to open an account, or opening a joint account with her, but I am inclined to believe that neither avenue offers a realistic chance of overcoming the proof of U.S. residency requirement.

I also contacted an online brokerage house; while my friend would be able to open an account there, any funds direct deposited into that account would have to list the brokerage house as payee, and not my friend. Although I have not checked with the IRS, I doubt they will accept that as a solution. A second online broker I looked at was simply too expensive, its monthly fees likely eating up much of the balance while my friend waited for the IRS to send her money.

Lastly, I investigated Finnish banks with branches in the U.S. I found one (Nordea) with a branch in NY, but that branch only deals with corporate clients by referral.

Based on this research, I do not believe it is possible for an individual who is a citizen and resident of a foreign country to open a U.S. bank account remotely. As such, my options would appear to be limited to pleading with the IRS to make a hardship exception in this matter, and find some other way for my friend to get the money that rightfully and legally belongs to her. I have no illusions about my prospects for success with that.

Notwithstanding all of that, I doubt my research on this issue has been exhaustive. If anyone here knows of a method whereby my friend might be able to open a U.S. account of some kind that the IRS would be willing to direct deposit into, I would be very grateful to hear about it.

2

This might help:

However, even if Finland doesnt do checks other Euro nations do, try one of them.

3

Is your friend ever going to visit the U.S. for a few days? If so, she may be able to avail herself of the opportunity to open an account in person at one of those small banks or credit unions. There are also services like Walmart check cashing where they take a few bucks and accept your check.

The notion of opening account at a Canadian/European/multinational bank that has branches in the U.S. or offers $ accounts or is otherwise willing to accept foreign currency cheques is not a bad one — eg HSBC does stuff like that or at least used to — but you will have to call each bank up to see what class of accounts allow it and what the fees are

4

The only thing I know is that as a non-resident I have an account with BoA. Now I didn’t open it with them; I opened it in person with a small Seattle bank (SeaFirst) that was taken over by BoA, but they have made no noise about my being a non-resident.

You might try an S&L; they are much more likely to be accommodating.

5

It used to be possible to endorse a check to a third party, although I haven’t done it in ages. Check with your bank if they will accept his check endorsed to you, find out exactly what he has to write on the back, make sure they know he won’t be present and if that will be okay. You may then be able to pay the check into your account, and send him the money electronically.

6

You should investigate currency transfer companies. I use TransferWise.

The way it works is that you set it all up from your own country of residence, you will need to provide proof of identity and all the usual stuff. Once the initial set up is complete you can then open a “balance” in as many of the available currencies as you like. I have balances in Australian, New Zealand, US, and UK currencies. It costs nothing to join and it costs nothing to open or hold a currency balance and you can also get a free M/C Debit card. With each balance you get a bank account number that can be used locally for that currency. For example, my USD balance has its own bank account number and address in my name that someone in the US can use to deposit money.

Once you have money in one currency you can then transfer it to your own local currency balance and either spend it directly using the TransferWise Mastercard that I mentioned earlier, or transfer it to your normal bank account for a small fee.

TransferWise make their money by charging a fee for currency conversion and a fee for transferring money from your TransferWise account to a standard bank account. The currency conversion rates are pretty good, they take a small fee from the amount to be converted, normally around .5%, then they use the market rate for the conversion itself. The fees are explained upfront before you convert, so you know exactly what you are getting.

As an example of how easy it is, I’ve just opened a EUR balance so I now have a bank account with currency in EUR. It was effective immediately, I just clicked a button and it’s done. Now I can transfer money from my USD account to my EUR account (except I don’t have $1000 ha ha). The fee is only $4.48 USD, and the conversion rate is the same as you get if you google “USD to EUR”.

You can avoid the fee for transferring your funds from TransferWise to your bank account by just using the Mastercard debit card to spend directly from the TransferWise account.

It’s a pretty good system if your currency is supported. A while back my Dad wanted to send one of my daughters some money for her birthday. He is in the UK, she is in Australia, I am in New Zealand. I opened a GBP balance in TransferWise, gave him the bank account details, he deposited the money using internet banking, it appeared in my TransferWise account within minutes, and I converted it to AUD and transferred it to my daughter’s account.

Possible wrinkles: Not all currencies come with a bank account number. USD and EUR do so it should work for Finland but you’d have to investigate. My EUR bank account is located in Brussels, Belgium, I assume it is straight forward transferring funds from a EUR account in Belgium to a EUR account in Finland, but again, you’d have to investigate.

There are other companies that do a similar thing, I’ve just mentioned TransferWise because it is what I’m used to.

7

Just as a further example of how it can be useful to use a system like this. I have a monthly subscription to a service that is charged in USD (no, not porn! It’s a Zwift subscription, a whole nother conversation). If I use my usual bank card for the transaction then I don’t know how much it will cost until the transaction is finalised, and I lose a couple of dollars in the conversion. What I do instead is have a USD balance with TransferWise and I use my TransferWise Mastercard number to pay the service. TransferWise will pay out of the appropriate currency balance provided there are funds available. All I need to do is make sure I have $16.99 in my USD account each month. This benefits me because I know what it costs as soon as I transfer the funds from NZD to USD, I don’t have to wait for the payment itself to go through, and I also save a couple of dollars on the conversion fees.

8

Citibank has a presence in Finland. Here are their details:

9

Thanks for the link. I have seen that site before, but I read it (and the comments) more closely this time. It appears to offer some hope for citizens/residents of foreign countries hoping to open a corporate account in the U.S., but no actual hope for individuals wanting a regular account. Nevertheless, your parting comment was of interest and may be investigated at some point. Many thanks for that.

10

My friend is unlikely to visit the U.S. for the foreseeable future.

My research thus far indicates that opening an account in a multinational bank with a branch in the U.S. does not give one access to a U.S. bank account. That requires an in-person branch visit.

11

I have called several S&Ls with no luck. They are generally community-based institutions. Like small banks, they lack the resources to verify information about potential overseas customers.

This was one of the first options I investigated. My understanding is that policies vary from branch to branch. My branch said no.

There are many generally shady businesses in the U.S. that do cash third party checks while pocketing hefty percentages of the amount. My friend was willing to try one, but I was not because I do not wish to encourage their predatory practices.

I have two words for this post: “awe” and “some.” It sounds very promising. As I have lost count of how many times I have thought I found a viable solution - only to have it crushed - I want to run it by the IRS to make sure they are okay with it. My friend is currently experiencing some computer difficulties and may not be able to see this post for a few days. Nevertheless, you have restored some hope that things may ultimately work out. Thank you.

According to Citibank, opening an account at the branch in Finland does not grant access to a U.S. bank account. For that to happen, the applicant must appear in person at a U.S. branch.

12

Is it not generally possible to endorse checks and negotiate them to another person? Is an entirely line of studying that I did for the CPA exam actually totally worthless because no one will accept checks with more than one endorsement? Negotiating checks and other bank drafts have always been subject to the person accepting them asking for a discount to guard against the chance it’s not honored. Since the final presentation of the check is to the US treasury, it’s hard to exactly go to its local branch and present it directly even if you could negotiate it to someone in the US; I’m guessing only banks that are members of the Federal Reserve have the right to present checks drawn on the Treasury, and perhaps none of those banks accept multiple endorsements anymore. I suppose it’s reasonable policy for any normal bank now to simply not accept them because of the risks involved, but it makes negotiable instrument law much less interesting to study if there is no longer any practical value.

13

Just obtaining a bank account number for an account, or pseudo-account, denominated in US$ should not prove to be a problem. Any serious bank will do it, those currency-transfer services do it, even some reloadable gift cards come with an IBAN. The question is, will the IRS send off an electronic transfer, or are you stuck with a negotiable paper check? If it’s the latter, you still need to confirm your receiving institution will deal with it and what the fees are. And even if the IRS offers electronic refunds, there is the question of if they care whether the destination account be a U.S. bank account or merely one denominated in $$. Because the latter should be (relatively) easy, even online, even if banks like Citibank say you need to show up in person at the U.S. branch in order to base your account at that branch.

14

If your friend has a Social Security Account Number, then he had to be a resident alien (“green card”) holder, IIRC. Are you sure it’s not a Taxpayer ID you’re talking about?

15

No problem. Good luck!

16

In Switzerland it is possible, but expect to pay approximately $50 per check to the bank in question.

American Citizens Abroad has a solution for citizens.

Transferwise or Paypay seem like the best solution.

17

Definitely a SSN. It was obtained about 20 years ago. I gather the pre-9/11 rules were a bit different than they are now, especially where intent to serve in the U.S. armed forces is concerned.

This is encouraging to know as a potential plan B if the IRS rejects the currency transfer option. Thank you for the suggestion.

18

I have done this recently and this is the simplest option since you are not talking about large amounts of money, or an ongoing need for a bank account here.

Your friend will write on the back in the endorsement area:

Pay to the order of Dropo
For Deposit Only
[signature matching the name on the front of the check]

Then you can Venmo him, or wire it if that’s the only option, but that will incur a fee.

BTW I did not know that about Finland. How do your friend’s tenants in CA pay the rent?

19

I do not understand. I have lived in Canada for over 50 and have never had any problem opening a bank account in the US. My SS payments are going in there regularly, although my Covid payment came by check. The last time I opened an account was about 7 or 8 years ago.

20

I would take another look at the third-party check option. That should be simple, especially with a US Treasury check. I am sure I could even do it online with my bank using a very clear scan or photo of the endorsed check. I wouldn’t even need the actual check. I’ve done this before on a couple occasions.