How to open a foreign currency account (complete guide)
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While international trade is vital to many small and medium-sized businesses across the United Kingdom, active exporting remains a limited practice. According to the 2024 Longitudinal Small Business Survey, only 17% of SME employers exported goods or services in the past year. For businesses without employees, the figure was 16%.
The issue is not a lack of ambition but the everyday challenge of managing money globally. Slow transfers, unfavourable exchange rates and complex banking processes often make cross-border trade more challenging than it needs to be.
A foreign currency account helps simplify international payments and protect margins. This guide explains how to open a foreign currency account in the UK, what documents and requirements apply and how WorldFirst’s World Account helps UK SMEs manage overseas payments with clarity and efficiency.
Key takeaways:
- A foreign currency account helps UK SMEs trade more efficiently: Managing payments through a standard GBP account often leads to hidden fees and poor exchange rates. A foreign currency account allows you to hold and use major currencies directly, thereby improving control over costs
- The right provider makes a difference: Compare banks and fintechs that offer transparent FX rates and support both incoming and outgoing payments in your chosen currency.
- Avoid costly mistakes: Watch for hidden fees, automatic conversions and incomplete documentation. Always test small transfers before scaling up
- Manage global payments easily with WorldFirst: The WorldFirst World Account enables UK businesses to hold, receive and send over 20 currencies from a single platform, making international trade faster and simpler
What is a foreign currency account?
A foreign currency account allows you to hold and manage funds in a non-sterling currency, such as US dollars (USD), euros (EUR) or Japanese yen (JPY). It allows you to receive and make payments directly in that currency without having to convert to pounds each time. Businesses that trade in a small number of currencies often open one account per currency to simplify settlement with key partners or suppliers.
Why a foreign currency account matters for UK businesses
Expanding into international markets can unlock growth, but it also introduces financial complexity and challenges.
Every invoice, payment and supplier relationship across borders involves variables such as exchange rates, conversion timing and cross-border transfer fees. These small differences add up quickly and can reduce overall profitability if not managed strategically.
Consider a UK business that imports raw materials from China or is setting up business in the US. Each transaction passes through different currencies, banking systems and timelines. Managing all of this through a single GBP account forces automatic conversions at the bank’s prevailing rate, which is rarely competitive. Over time, these hidden costs erode margins, making cash flow harder to predict.
When international payments move through a standard GBP account, several issues typically arise:
- Automatic conversions at unfavourable rates: Payments received in USD or EUR are often converted immediately into pounds, even when rates are not in your favour
- Hidden transfer and intermediary fees: Cross-border payments may pass through several correspondent banks, each deducting a small charge along the way
- Limited control over conversion timing: Businesses lose the ability to choose when and how they exchange funds, missing opportunities to benefit from rate improvements
- Complex reconciliation: Matching payments across currencies and bank statements takes time, increases the risk of errors and complicates financial reporting
How to open a foreign currency account step by step
Here’s a clear step-by-step guide to help you open a foreign currency account in the UK, understand what’s required and get your business ready to start trading internationally:
1. Confirm the use case and currency
Before you apply, define exactly how and why your business needs a foreign currency account:
- List your key markets: Identify the locations of your customers, suppliers and partners
- Review payment flows: Check which currencies you send and receive most often
- Select your primary currency: Choose the non-sterling currency that represents your largest transaction volume (for example, USD, EUR or SGD)
- Define the purpose: Decide if you’ll use the account to receive customer payments, pay suppliers or both
- Set clear goals: Knowing your main use case will help you select the most suitable provider and account structure
2. Choose the right provider and account type
Take time to compare your options and confirm the account fits your business structure and trading needs:
- Research UK-based providers: Look at both traditional banks and regulated fintechs that offer foreign currency accounts in your target currency
- Check business eligibility: Confirm that the provider supports your business type, such as a limited company, LLP or sole trader
- Review supported currencies: Ensure the provider offers a dedicated account in the currency you need rather than a general multi-currency wallet
- Compare key features: Examine payment speed, supported payment rails (such as SWIFT or SEPA), online access and reporting tools
- Understand the service scope: Some providers only offer foreign currency accounts for inbound payments, while others support both sending and receiving payments in foreign currencies
3. Check eligibility
Requirements vary by provider. Expect standard business banking eligibility criteria, including UK registration status, permitted business activities and acceptable countries with which you trade. Some providers apply additional criteria based on sector risk and expected payment corridors.
4. Prepare documents
Have your documentation ready to avoid delays:
- Companies House details and certificate of incorporation
- Ownership and control structure, including persons with significant control
- Photo ID and proof of address for directors and beneficial owners
- Business address evidence
- Nature of business, leading counterparties, expected monthly volumes and values
- Source of funds and source of wealth information
- Recent bank statements and, if requested, financials or management accounts
5. Apply and select the currency
Once you have chosen your provider, complete the business application accurately to speed up approval:
- Apply online or in-branch: Most providers support digital onboarding, although some may require in-person verification
- Select your target currency: Choose the single currency you need
- Provide transaction details: Estimate your typical inbound and outbound payment volumes, as well as your primary trading countries
- Disclose any cash activity: Declare high-value or frequent cash transactions to meet compliance requirements
6. Complete compliance checks
The provider will perform KYC, AML and sanctions screening on the company, directors, owners and key counterparties. Be ready to answer follow-up questions about trading patterns, invoice types and payment routes.
7. Receive account details and confirm capabilities
Once approved, you’ll receive the account identifiers specific to that currency, such as the IBAN and BIC for EUR or the account and routing details for USD. Confirm:
- Incoming payment methods supported
- Outgoing payment rails and cut-off times
- Any limits on jurisdictions or counterparties
8. Understand fees and FX
Ask for the full tariff in writing. Clarify:
- Monthly maintenance fees for the foreign currency account
- Incoming and outgoing international payment charges
- Intermediary or correspondent bank fees
- FX pricing when you convert to GBP
- Minimum balance requirements and any inactivity rules
9. Set up controls and reconciliation
Once your account is active, put proper controls in place to keep payments secure and reporting accurate:
- Assign user roles: Give access only to authorised staff and separate payment approval from data entry
- Enable dual approval: Require two people to approve outbound payments above a set threshold
- Set up alerts: Receive notifications for large, unusual or overseas transactions
- Integrate with your accounting system: Reconcile transactions in both the foreign currency and GBP for transparent reporting
- Create a conversion policy: Determine when and how you’ll convert balances back to pounds to maintain optimal margins
10. Test, go live and review
Run a small inbound and outbound payment to confirm account details, fees and cut-off times. After the first month, review performance and adjust approval limits, conversion timing and reporting based on real activity.
6 Common missteps when opening a foreign currency account and how to avoid them
Several common mistakes can reduce efficiency or increase the costs of foreign currency accounts. The following tips will help you avoid them:
1. Hidden fees or markups
Always review the full fee schedule before applying. Some providers add hidden spreads on smaller transactions or charge “inactivity” fees when balances remain unused. Request a clear breakdown of FX margins and payment fees in writing.
2. Automatic or forced conversions
Avoid providers that automatically convert foreign balances back into GBP at fixed intervals. This removes your ability to time conversions strategically, which can lead to unnecessary foreign exchange losses. Choose an account that allows you to hold funds in the original currency until you decide to convert.
3. Exchange rate volatility
Holding funds in foreign currencies exposes your business to instabilities in exchange rates. Where possible, use simple hedging tools such as forward contracts or limit orders to protect your margins and forecast cash flow more accurately.
4. Payment delays or routing errors
Incorrect account details, missing routing codes or issues with the intermediary bank can cause delays in payments. Always test small transfers first, verify account information with your counterparties and confirm the provider’s payment networks and cut-off times.
5. Marketplace payout restrictions
Certain online marketplaces, particularly in the US and Asia, only pay out to domestic bank accounts. Before listing internationally, check that your provider issues local account details compatible with the marketplaces you use.
6. Compliance delays or rejections
Incomplete documentation or unclear trading activity can slow down the onboarding process. Be transparent about your business model, provide all requested KYC documents upfront and respond promptly to follow-up questions from compliance teams.
Why do many UK businesses choose multi-currency accounts?
For growing SMEs, managing payments across borders should not feel like running several separate businesses.
A multi-currency account enables you to manage multiple currency payments on a single platform. You can receive, hold, convert and send payments in several currencies under one account, often with local account details in major markets. This centralised approach removes the need to open and maintain separate foreign currency accounts for each region.
Key advantages of multi-currency accounts over foreign currency accounts:
- Centralised control: Manage all your currencies in one place instead of juggling multiple foreign accounts
- Lower costs: Minimise conversion and transfer fees by holding funds and converting only when rates are favourable
- Improved visibility: View balances, incoming payments and outgoings across currencies in real time
- Simplified reconciliation: Streamline accounting and reporting by reducing the number of accounts to manage
- Scalability: Easily add new currencies or regions without needing to reapply or repeat compliance checks
How to open a WorldFirst multi-currency account?
WorldFirst’s World Account combines all these advantages in one platform. It provides local account details in over 20 currencies, fast international payments and transparent foreign exchange pricing, helping UK SMEs trade globally with confidence, simplicity and control.
Opening a World Account is straightforward and can be completed online in just a few steps:
- Step 1 – Create your account: Click “Register” – it’s free. Verify your email and create a password
- Step 2 – Enter business details: Add your company name, registration number and addresses exactly as listed on Companies House
- Step 3 – Verify directors and owners: Upload photo ID and proof of address for all directors and any shareholders with 25% or more ownership
- Step 4 – Add supporting information: Provide a recent bank statement, your business website and brief details about your trading partners or expected transaction volumes
- Step 5 – Submit for review: Double-check your information and submit your application. We review most applications within two working days and will contact you by email if more information is needed
Once approved, you’ll be able to access your World Account dashboard, where you can:
- Open local receiving accounts in over 20 currencies
- Send and receive international payments
- Manage balances, conversions and reporting in one platform
Open your WorldFirst multi-currency account for free today and manage your global earnings, conversions and transfers in one place.
Abdul Muhit has 17 years' experience in banking and payments, spanning across regulation, payment networks, acquiring, issuing and treasury. He has served across strategic and delivery roles in product, technology and operations functions at global companies including JP Morgan, KPMG and Visa."
Abdul Muhit
Author
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