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Opening a Euro bank account as a UK resident?
Thread poster: Clare Bentley
Clare Bentley  Identity Verified
United Kingdom
Local time: 19:18
German to English
May 29, 2015

Most of my clients pay me in Euros, into my UK bank account. My bank doesn't charge a fee, but I'm conscious that instead they're probably not offering the best exchange rate.

I'm sure I've read somewhere - probably here, but I can't find the exact post again - that a better option is to open a Euro account, say in Germany, and then when I need money in my UK account to pay a transfer service company to convert Euro into Sterling. This way I'll get a better rate.

Sounds good. But I've just tried to open a bank account online, only to find that I can't as I'm not a German resident.

So, what does everyone else do? I'm fairly new to the world of freelancing and would appreciate some advice. Are there other German (or Austrian, French...) banks which allow non-residents to open accounts? Or do I try to open a British Euro account? I think I've seen that Barclays does one, but I'd have to have my main account at Barclays too, so would need to change banks.

Or is there another option that I'm missing?

Any advice would be welcome.


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Elif Baykara  Identity Verified
Turkey
Local time: 21:18
Member (2015)
German to Turkish
+ ...
Can't you have a Euro account in UK? May 29, 2015

I am asking just out of curiosity.

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Alex Lago  Identity Verified
Spain
Local time: 20:18
Member (2009)
English to Spanish
+ ...
Open a Euro account with your UK bank May 29, 2015

You should be able to open an account in Euros with your UK bank

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Michael Joseph Wdowiak Beijer  Identity Verified
United Kingdom
Local time: 19:18
Member (2009)
Dutch to English
+ ...
non-resident euro account in Spain. May 29, 2015

Clare Bentley wrote:

Most of my clients pay me in Euros, into my UK bank account. My bank doesn't charge a fee, but I'm conscious that instead they're probably not offering the best exchange rate.

I'm sure I've read somewhere - probably here, but I can't find the exact post again - that a better option is to open a Euro account, say in Germany, and then when I need money in my UK account to pay a transfer service company to convert Euro into Sterling. This way I'll get a better rate.

Sounds good. But I've just tried to open a bank account online, only to find that I can't as I'm not a German resident.

So, what does everyone else do? I'm fairly new to the world of freelancing and would appreciate some advice. Are there other German (or Austrian, French...) banks which allow non-residents to open accounts? Or do I try to open a British Euro account? I think I've seen that Barclays does one, but I'd have to have my main account at Barclays too, so would need to change banks.

Or is there another option that I'm missing?

Any advice would be welcome.


I have a non-resident euro account in Spain. I did set it up when I still lived there, around five years ago, but as far as I know you can just go there and open one.

I use Smart Currency Exchange to send my euros from my Spanish € account to my HSBC account here in the UK.

Michael

PS: Banco Popular have a very good English helpline:

see:

"We are pleased to attend you as well in the International Free phone Number 00 800 34 800 800 (from Austria, Belgium, Denmark, Finland, France, Germany, Ireland, Italy, Luxembourg, Netherlands, Norway, United Kingdom, Sweden and Switzerland) or 011 800 34 800 800 (from Canada and USA), where an operator will attend you in English, German or French language. If you call from any other country please dial + 34 91 436 50 49 (for service in English), + 34 91 436 50 13 (for service in German). This service is available Monday to Friday from 9 am until 9 pm."


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Michael Joseph Wdowiak Beijer  Identity Verified
United Kingdom
Local time: 19:18
Member (2009)
Dutch to English
+ ...
hmm May 29, 2015

Alex Lago wrote:

You should be able to open an account in Euros with your UK bank


Yes, I also looked into that (albeit briefly), but they wanted me to satisfy various conditions (e.g., have × much money in it every month, pay certain fees, etc.). If anyone here has actually done it, please speak up!

Michael


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Clare Bentley  Identity Verified
United Kingdom
Local time: 19:18
German to English
TOPIC STARTER
Too expensive May 29, 2015

Thanks Michael, that looks quite hopeful. Thanks for providing the phone numbers. I'll give them a call.

Alex, yes, I think in theory I can open a Euro account with my UK bank. But they want to charge me £100 just to open the account.

And as Michael says, there seems to be lots of other conditions attached too. They seem to gear their Euro accounts to big international businesses. For an individual freelancer like me, I think the cost would be prohibitive. I obviously don't know about all the UK banks though, which is why I'm interested in other people's experiences and am looking for good tips on managing my money.


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Jenn Mercer  Identity Verified
United States
Local time: 14:18
Member (2009)
French to English
Minimums May 29, 2015

Michael Beijer wrote:

Alex Lago wrote:

You should be able to open an account in Euros with your UK bank


Yes, I also looked into that (albeit briefly), but they wanted me to satisfy various conditions (e.g., have × much money in it every month, pay certain fees, etc.). If anyone here has actually done it, please speak up!

Michael


FWIW, I eventually decided it was not worth it to me to establish an account in euros because of the minimums issue. There is often an assumption made that an international company is a large company. I do pretty well for myself, but many multi-currency solutions are out of scale for my business.


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Thomas T. Frost  Identity Verified
Germany
Local time: 20:18
Member (2014)
French to Danish
+ ...
Various May 29, 2015

You could start by calculating how much commission you currently pay. Compare your bank's rate with the ECB reference rate on the date it was exchanged:

http://www.ecb.europa.eu/stats/eurofxref/eurofxref-hist-90d.xml

Today's rate was 0.719 GBP/EUR.

Let's say you were paid €100, credited as £70. So the exchange rate was 70/100 GBP/EUR = 0.7.

The commission in per cent was (0.719-0.7)/0.7 = 0.0271 = 2.71 %. That's a realistic example.

If your commission is too high, then, as suggested, you might be better off with a euro account somewhere in the EU. Germany is probably too complicated, because standard practice for online accounts is that you go and identify yourself at a post office, which then sends the id form to the bank.

You could try a postal account in Luxembourg (www.post.lu), not to hide money but because it's simple and cheap to use. They may require some paperwork from your British bank. You get online banking in English.

Another suggestion is a Danish account, as they are usually also cheap and often come with an English interface. Their currency exchange commission is often virtually zero, so you may not even need Transferwise or similar services, and you can in most banks choose that they change euros to pounds before they send the money to the UK. They will ask if you have a Danish personal ID number, but it should still be possible for a non-resident to open an account without one.

Maybe Sweden or Finland - I don't know.

French banks are pretty awful, stuffy and expensive. I wouldn't waste my time there.

I think it's often useful to have accounts in different currencies, so I'd definitely try in your place.


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Ben Senior  Identity Verified
Germany
Local time: 20:18
German to English
Nat West May 30, 2015

I used to have a Euro account with the Nat West but they stopped doing it last year and after a quick look around I didn't find a good alternative. My overseas clients pay me in sterling into my UK account and those in Euro countries pay into my account here in Germany.

Have you looked at setting up an account in the Channel Islands?

I would follow some of the suggestions here and set up a Euro account in another country.


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Tom in London
United Kingdom
Local time: 19:18
Member (2008)
Italian to English
HMRC May 30, 2015

I sympathise with your efforts to find a way of reducing the transaction costs of converting your income in Euro into GBP. I'm in the same position: most of my income from translating is in Euro and my bank (HSBC/First Direct) applies an exchange rate on each payment - as do all banks (worst of all is NatWest, which not only applies an exchange rate but also a fixed transaction charge!)

I've looked into (a) opening a Euro account in the UK (b) opening an account in an Italian bank (my work is nearly all with Italy). In both cases I came to the conclusion that "il gioco non vale la candela" (literally "it isn't worth burning a candle all night to gamble if the available winnings are going to be small) or in present-day English "it wouldn't be worth the hassle" and anyway since translation is my main source of income, I need the ££ here in the UK to pay my everyday living expenses.

Just one of the many foreseeable problems with an account in Euroland would be that at the end of each tax year you will still need to declare all your income to HMRC, and your Euro bank statements will be the evidence of that. If these are not in English, and Mr HMRC Tax Man comes knocking, you'll need to be ready to translate them line by line !

The only way for UK-based translators to avoid currency conversion costs is to relocate, for tax purposes, to Euroland. Or for the UK to join the Euro



[Edited at 2015-05-30 13:45 GMT]


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Alex Lago  Identity Verified
Spain
Local time: 20:18
Member (2009)
English to Spanish
+ ...
Thought it wasn't a problem May 30, 2015

Clare Bentley wrote:

Thanks Michael, that looks quite hopeful. Thanks for providing the phone numbers. I'll give them a call.

Alex, yes, I think in theory I can open a Euro account with my UK bank. But they want to charge me £100 just to open the account.

And as Michael says, there seems to be lots of other conditions attached too. They seem to gear their Euro accounts to big international businesses. For an individual freelancer like me, I think the cost would be prohibitive. I obviously don't know about all the UK banks though, which is why I'm interested in other people's experiences and am looking for good tips on managing my money.


I mentioned because in Spain there is no problem opening a bank account in any major currency and they come with no special conditions, just a normal account but in another currency. Silly me I assumed the same would be the case in the UK.


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Tom in London
United Kingdom
Local time: 19:18
Member (2008)
Italian to English
No problem in Italy either May 30, 2015

It wouldn't be a problem in Italy either. I actually went into my (former) bank in Italy, the one I used to use, and asked "would there be any problem about me opening a account here if I don't live in Italy?" at which the manager grinned and replied "we're always happy to open an account for anyone".

[Edited at 2015-05-30 13:54 GMT]


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Thomas T. Frost  Identity Verified
Germany
Local time: 20:18
Member (2014)
French to Danish
+ ...
Not the only way May 30, 2015

Tom in London wrote:

The only way for UK-based translators to avoid currency conversion costs is to relocate, for tax purposes, to Euroland. Or for the UK to join the Euro



That's clearly not the only way, but each one decides which solution matches his or her preferences best.

I've simply kept accounts open in many countries I've lived in instead of closing them after moving away. That is very helpful now, particularly my UK account. It can be a bit more difficult to open accounts in countries in which you are not resident, but it's still a right under EU law to have accounts where you want, although that doesn't oblige any bank to open an account if they don't want to.

Freedom of movement of capital in the EU is also a fundamental right, so if some tax authorities were to overload someone with unreasonable red tape just because an account is in another EU Member State (and thus in another language), they might violate the freedom of movement by placing such obstacles in your way. I wonder if there is any case law on this point.


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Clare Bentley  Identity Verified
United Kingdom
Local time: 19:18
German to English
TOPIC STARTER
Thanks for all the replies May 30, 2015

Well, it seems it is harder than I first thought!

Thomas, your advice on calculating commission was very useful. I did this for my last payment and found out my bank charged just under 2%, which I suppose isn't too bad. I think it's just because it was a small amount initially, by the time it had been converted into sterling, it seemed a lot smaller. The unfavourable exchange rate doesn't help much at the moment either.

I'm a bit surprised at the suggestion to try accounts in countries that don't have the Euro themselves. Won't this make things even worse?

Tom, thanks for sharing your experiences. I can see why you've kept to just one (British) account. I don't quite understand the HMRC comment though. Obviously I declare all my earnings anyway, so I don't really see the problem with having an extra bank account? I am actually intending to open a new British account to use as a business account, so that I can keep track of payments etc more easily. My intention was to also have a Euro account to receive payments and then transfer in batches as it were into my British account. So most of my money would end up in my British account anyway, apart from a bit I'd keep in Euros for holidays. No point in making endless currency conversions!

So, back to my hunt for a Euro account. I've investigated Irish accounts, and whilst I think I could open one, it would come back to the issue of bank fees. Having had free banking for years, I resent paying a fee for the privilege of giving a bank my money!

I had an Austrian account years ago. I wish I'd kept it open now. Mind you, that was in the days pre internet banking, so probably wouldn't be much use anymore.


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Thomas T. Frost  Identity Verified
Germany
Local time: 20:18
Member (2014)
French to Danish
+ ...
Non-euro country May 30, 2015

Clare Bentley wrote:

I'm a bit surprised at the suggestion to try accounts in countries that don't have the Euro themselves. Won't this make things even worse?


It won't necessarily make things worse, because what you need is an account in a country where banks don't practise high commissions as British banks often do, often 3 %. 2 % isn't the highest you can find, but it's still high. Compare with Danish banks which will typically, for euro, add or deduct 0.01 to/from the exchange rate (depends if they are selling of buying) of typically 7.45. That's a commission of 1/745 = 0.13 %. In addition, they'll take a flat fee around €2 for such transfers. The commission and fee may be slightly higher for other currencies, but you can see that we're very far from the racket many British banks practise.

Post.lu takes €0.20 in flat fee for foreign transfers, but its commission is slightly higher.

Does your bank deduct a flat fee for crediting foreign transfers in pounds? If not, then you can find a euro account solution that costs you very little if only you are willing to look around for the best solution.

If you occasionally purchase services or goods in euro, you can simply leave enough on a euro account for such purchases so you have no commission to pay. For example, I've found that Amazon UK is often more competitive than continental Amazon sites (but sometimes it's the reverse), so having a British account is practical for that.


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