Opening a UK business bank account turns on anti-money laundering checks: banks must verify the company, its directors and its beneficial owners, and check the PSC register. The UK has no exchange controls (the Exchange Control Act 1947 was abolished by the Finance Act 1987), so profits can be repatriated subject to company law, tax withholding and sanctions screening. Deposits at UK-authorised banks are protected by the FSCS up to £120,000 per eligible depositor per banking licence, including companies.
Account opening and due diligence
Under the Money Laundering Regulations 2017, a bank must identify and verify a corporate customer, including its company number, registered office, directors and senior managers, and understand its ownership and control. It must also identify the beneficial owners and take reasonable steps to verify them, and it cannot rely only on the Companies House record.
Before onboarding, banks obtain an extract of the company's PSC register and must report material discrepancies to Companies House. A foreign-owned company should therefore make sure its PSC filing, group chart and identity documents for directors and owners all match before applying.123
Paying profits out of the UK
There is no general UK exchange control: the Exchange Control Act 1947 ceased to have effect under the Finance Act 1987, so no central bank approval is needed to move capital or profits abroad. The constraints are company law, tax and sanctions.
A UK company may pay dividends only out of accumulated, realised profits less accumulated, realised losses. Directors should check distributable reserves in the latest accounts (or interim accounts) before declaring a dividend to a foreign parent. Interest and royalty payments abroad are subject to withholding unless treaty relief applies, which affects the choice between dividends, interest and fees as repatriation routes.45678
Deposit protection and the regulator
The Financial Services Compensation Scheme protects deposits up to £120,000 per eligible depositor per authorised firm, a limit that rose from £85,000 on 1 December 2025. Companies are covered regardless of size, but most regulated financial services companies are not eligible. Brands that share one banking licence count as one firm, so a group holding large cash balances should spread them across separately licensed banks or accept that most of the balance is unprotected.
Banks, building societies and credit unions are prudentially regulated by the Prudential Regulation Authority, part of the Bank of England. Checking the Financial Services Register confirms whether a provider is UK-authorised, which determines FSCS cover.91011
Sanctions
The UK runs its own sanctions regimes. Financial sanctions licences come from OFSI, and trade sanctions licences from OTSI or, for strategic goods, the Export Control Joint Unit. Any activity prohibited under a regime needs a licence unless an exception applies, and payments to or through designated persons can engage both financial and trade sanctions. Banks screen payments accordingly, so groups with links to sanctioned jurisdictions should expect enhanced questions.12
| Item | Requirement |
|---|---|
| Company identity | Name, company number, registered office and principal place of business |
| Management | Full names of directors and senior persons responsible for operations |
| Ownership and control | Understanding of the structure; identification and reasonable verification of beneficial owners |
| PSC register | Extract obtained before the relationship starts; material discrepancies reported to Companies House |
How it works, step by step
- Incorporate the company and file accurate PSC information13Companies House
- Assemble identity evidence for directors and beneficial owners and the group ownership chart12Company
- Apply to the bank, which verifies the company and checks the PSC register13UK bank (regulated firm)
- Before paying dividends abroad, confirm distributable profits5Company directors
No timings or fees are shown unless an official source states them.
Documents usually needed
- Certificate of incorporation and articles of association
- PSC register extract and group structure chart
- Identity and address evidence for directors and beneficial owners
- Business plan or description of expected account activity
- Latest accounts showing distributable reserves (before dividends)
Common mistakes
- Applying for a bank account while Companies House PSC data differs from the group chart given to the bank.
- Declaring dividends to a parent without checking distributable reserves.
- Assuming a sanctions licence in another country covers UK-linked payments.
- Paying intra-group interest gross before treaty relief is in place.
- Holding all group cash with brands that share one banking licence and assuming each has separate FSCS cover.
When the business crosses borders
- Foreign directors and owners may face additional verification steps; certified and translated documents can speed onboarding.
- Banks treat links to high-risk or sanctioned jurisdictions as triggers for enhanced due diligence.
- Choice of repatriation route (dividend, interest, royalty, service fee) changes the UK withholding position; there is no exchange control approval to obtain.
- UK sanctions lists are separate from EU and US lists, so screening must cover all relevant regimes.
Questions businesses ask
Why does the bank ask about our foreign shareholders?
UK anti-money laundering law requires banks to identify and verify beneficial owners and understand the ownership structure; they cannot rely only on Companies House records.12
Can a UK subsidiary pay a dividend in its first year?
Only if it has accumulated, realised profits available after deducting realised losses.5
Do we need approval to send profits or capital out of the UK?
No exchange control approval is needed: the Exchange Control Act 1947 was abolished by the Finance Act 1987. Dividends still require distributable profits, interest and royalties may bear withholding tax, and payments are screened for sanctions.4512
What this guide does not yet confirm
These points need checking with a qualified local professional in the United Kingdom before you rely on them.
- Absence of exchange controls is confirmed from the statute abolishing the Exchange Control Act 1947, not from a current Bank of England or HM Treasury statement.
- Bank of England and FCA rules on account opening timescales, and any requirement for UK-resident signatories, were not researched.
- The UK withholding position on dividends paid to non-residents was not confirmed on an official page.
- How FSCS treats deposits of group companies and of trusts or client accounts was not researched.
Sources and review status
Each statement is numbered to the source it was checked against. We use official sources where we can, and each statement says whether it was checked against an official or a secondary source. Sources last checked on 19 October 2026. None of it has been professionally reviewed yet: it is research checked against official and secondary sources by WONE Global, not legal or tax advice.
Banks and other regulated firms must identify and verify a corporate customer, including its name, company number, registered office, directors and senior managers, and understand its ownership and control structure. Money Laundering Regulations 2017 regulation 28. Listed companies on a regulated market are exempt from some of these requirements.
Regulated firms must identify and take reasonable measures to verify a customer's beneficial owners, and cannot rely solely on information filed at Companies House to do so. Money Laundering Regulations 2017 regulation 28(4) and (9).
Before starting a business relationship with a company, banks and other obliged entities must obtain an extract of its PSC register and report material discrepancies with what they know to Companies House. Money Laundering Regulations 2017 regulation 30A. Since 1 April 2023 a report is required only where the discrepancy could reasonably be linked to money laundering, terrorist financing or concealing business details.
The Exchange Control Act 1947 ceased to have effect under section 68 of the Finance Act 1987, so there is no general UK exchange control legislation restricting capital movements or profit repatriation. Sanctions, anti-money laundering rules and tax withholding still apply to cross-border payments. Section 68 preserves a Treasury certificate power only for acts done before 13 December 1979.
The abolition is confirmed from the statute; the second half of the statement (no other general exchange control law) is an inference not stated on a current official page.
A UK company may only pay dividends and other distributions out of accumulated, realised profits less accumulated, realised losses. Companies Act 2006 s830; further rules apply to public companies and investment companies.
Companies paying yearly interest arising in the UK must deduct income tax at the savings basic rate when making the payment. Income Tax Act 2007 s874; applies to payments by companies and to payments to persons whose usual place of abode is outside the UK. Treaty relief can reduce or remove the deduction, for example under the Double Taxation Treaty Passport scheme or with an HMRC direction.
The savings basic rate figure was not separately confirmed on an opened page; the basic rate on earnings for 2026-27 is 20%. The legislation text flags an amendment to the wording from tax year 2027-28; confirm the rate for payments from 6 April 2027.
Royalties for the use of intellectual property paid to an owner whose usual place of abode is outside the UK must be paid with income tax deducted at the basic rate. Income Tax Act 2007 s906. Payments for copies of works exported for distribution outside the UK are excluded. A company may deduct only the treaty rate if it reasonably believes the recipient is entitled to treaty relief (ITA 2007 s911).
Treaty-rate deduction without prior clearance is described in HMRC Company Taxation Manual CTM35270.
Relief from UK withholding tax under a double taxation treaty is not automatic: the overseas recipient applies to HMRC (for companies, on form DT Company) or uses the Double Taxation Treaty Passport scheme for loans. Interest, royalties and similar payments to non-UK residents.
The Financial Services Compensation Scheme protects deposits up to £120,000 per eligible person per authorised firm, a limit that rose from £85,000 on 1 December 2025; banks sharing one banking licence count as one firm. Applies to UK-authorised banks, building societies and credit unions. Temporary high balances of up to £1.4 million, typically from life events, are protected for up to six months.
FSCS deposit protection generally covers companies regardless of their size, up to £120,000 per eligible company depositor, but most types of regulated financial services company are not eligible. Eligibility follows the PRA Depositor Protection rules. A limited company's or LLP's business account is claimed separately from its directors' personal accounts.
The Prudential Regulation Authority, part of the Bank of England, sets prudential rules for and supervises banks, building societies, credit unions, insurers and major investment firms. Around 1,292 firms. Conduct regulation is by the Financial Conduct Authority; the split between the two was not described on this page.
UK financial sanctions licences are issued by the Office of Financial Sanctions Implementation (OFSI), and trade sanctions licences by the Office of Trade Sanctions Implementation (OTSI) or the Export Control Joint Unit; without an exception, any prohibited activity needs a licence. Transfers of funds to or through a designated person can engage both financial and trade sanctions.
A person with significant control is someone who holds more than 25% of the shares or voting rights, can appoint or remove a majority of the board, or exercises significant influence or control. Companies keep a PSC register at Companies House that is public and can never be blank; changes are generally reported within 14 days.
Questions on this topic
9 statements on banking, payments and profit repatriation in the United Kingdom
