In Denmark, a high proportion of entrepreneurs are immigrants, coming from countries where being self-employed is a source of great pride. One of the reasons is also that they sometimes have a harder time getting employed in a job that corresponds to their experience and qualifications, so the entrepreneurial path is best for them. When supported by a strong network, and a reliable accountant, they have good perspectives to be successful. This is confirmed by experience at Finklusiv, as we specifically support entrepreneurs who have received asylum in Denmark.
Yet, one of the unexpected difficulties for many business owners is to open a business account. Many have received a negative answer from their bank before turning to Finklusiv. This is explained by the fact that banks operate in a heavily regulated market, under the supervision of the Danish Financial Services Authority, and they have a lot of administrative obligations to fulfill to live up to these requirements. Because of this, it is not always a viable decision for them to open a new business account. They will also analyze the opportunity of making new income in their decision. For immigrants who do not have a longstanding relationship with their bank, it can be even more difficult, and in the case of refugees, the short residency permits add even more barriers.
Finklusiv helps refugees
This is why Finklusiv has set out to help and support serious entrepreneurs with asylum in Denmark. Based on our experience, here is some advice we can give would-be business owners, especially those with a refugee status, to maximize their chance of success when applying for a corporate bank account.
Your request file
The bank will ask you for a number of documents to assess whether your business is serious and viable and whether you are a trustworthy professional.
First things first: you need a good accountant, who can help you prepare these documents. The bank is always more confident if they see that the requested documents have been prepared by a qualified accountant. An accountant will also be considered part of your support network, which will be a strong point for the bank. Be careful to look for recommendations when you choose one, as having a bad accountant can have terrible consequences on your business, especially in relation with the tax authorities. It is a good idea to check if the accountant you are considering is a chartered accountant, part of a professional organization.
The documents you will need to provide to the bank are:
- Your business plan: it is a description of your business and a plan for its operation and development. This is something Startup Consulting can help you with. If your partners/ suppliers/ clients are well-known companies, make sure to mention them, as it shows the seriousness of your business. Don’t forget a section describing yourself, your previous experience in your field and- or your studies and previous achievements. After all, you are the one that will make everything happen, so you should show that you are the right person to succeed.
- Your operating budget for the next 12 months with a split per month. You must be able to present an operating budget and a cash-flow budget. Do not overestimate sales or underestimate costs just to show your bank that you can make a profit. Never be too optimistic, always be realistic in your previsions.
- if you are starting up, add an establishing budget as well, that indicates your start up costs, and how you will cover them. It is important to make clear the source of your start-up investment. It can be your own savings, or a loan from your private network for example. If you have taken on a loan for your company in your private network or have an agreement to get funds from private stakeholders, bring a contract on paper for these loans or agreements: even if it is not an official document, it makes things clear and will be appreciated by the bank.
- An overview of your accounts if you have used a dedicated personal account to run your business so far. Make sure that you have not mixed up your personal and professional finances. NB: this solution is legal only in the case of a sole-proprietorship company, and very few banks allow it.
You also need to provide your personal ID*'s
- passport/ id,
- proof of address – health card for example
- residency permit. If you have a refugee status and a temporary residency permit, a good idea would be to mention it if you are active in a local organization or in your children’s school. This will be proof of your integration in a strong network and stable life in the country. It will also increase the bank’s trust: they need to have faith in you as much as in your business.
- Personal tax declarations for the last 2 years
Prepare well for the meeting: try and anticipate all questions the bank can ask and investigate those you cannot answer. Before the meeting, use a sparring partner such as your accountant, a fellow business owner, trusted member of your network, or us at Finklusiv, to brainstorm about all possible questions and objections the bank can raise, based on the information you have provided.
Always be truthful: if a question calls for an answer you are not proud of or comfortable with, it is always better to tell the truth as it may be understood by the bank given particular circumstances. It is also possible to say that you need to investigate and will send the answer later. If the bank suspects you are hiding the truth, this will hurt your relationship with the bank and jeopardize the possibility of opening the account.
Finally, don’t be (too) stressed! If you are meeting with the bank in person, it means that the file you have sent digitally before looks good. If not, they would not take time to meet in person. Never forget that it is not an institution you are meeting, but a real person, who has decided your business is worth investigating. After all, you are an entrepreneur, taking charge of your own life to become your own boss, and that is always something to be proud of.
Did you get to Danmark as a refugee? | Contact Finklusiv
Finklusiv helps refugees that live in Denmark with their corporate bank account applications.
It’s hard to open a corporate bank account in Denmark. It creates a barrier to your business ownership dreams. It creates an even greater obstacle if you are a refugee. Therefore, Finklusive help refugees who live in Denmark making their dreams come true by supporting them with their application in collaboration with their bankpartner, Andelskassen Oikos.
Finklusiv have great experience within financial inclusion, microeconomics and does a fantastic job in that area. Asylum seekers who want to apply for a business account will be referred to Finklusiv.