The UK is known to be one of the easiest places to do business in the world. With pro-innovation regulators, a robust legal system and a flexible labour market, the country is designed for businesses to enter and thrive.

Between 2010 and 2024, the total business population in the UK increased by 23%. London, in particular, leads the pack of entrepreneurial cities.

At the start of 2024, it had the most private sector businesses with a whopping 983,000. This figure can be attributed to the city’s booming entrepreneurial ecosystem rife with talents and investors.

London also boasts a robust banking system that embraces different kinds of businesses. Its efficient banking system allows your business to easily integrate financial management tools, access credit facilities, and establish a solid financial foundation.

Here, we look at what it entails to create a business bank account in London – what you should consider, documents you need, the banking options to consider, and so on.  

Choosing the right business bank account

Before diving into creating a business account, it is important to understand that there are a myriad of options out there, therefore, you need to compare offerings from different banks based on the following considerations: type of business structure, fees and charges, accessibility and convenience, customer support, and miscellaneous services.

Type of business structure

Your business structure plays a role in the type of bank account you need. If you are a sole trader, you may opt for a simpler account with minimal fees.

A limited company will require an account with detailed reporting features, a partnership will need an account that allows multiple authorized users, while a large corporation will require specialized banking services such as credit facilities and treasury services.   

Fees and charges

Banks may charge monthly, annual, or transaction fees. New businesses can benefit from fee-free accounts while larger businesses with frequent transactions may go for fixed monthly fees that include unlimited transfers. Making the right choice depends on your business size and transaction volume.  

Accessibility and convenience 

A clog in the wheel while accessing your funds and banking services can hamper your service delivery.

Thus, it is essential that your bank account has unhindered access to funds and services. Check that the bank has a strong online and mobile banking platform, ATM availability, multiple bank locations, and prompt customer support.

Account management and customer support

Another important factor to consider is whether you would prefer to manage your account online or in-person. Whatever your preference, check the customer support availability. Is it 24/7, phone-based, or branch visits, or a combination of any of these?  

Miscellaneous services 

It is also necessary to consider accounts that offer extra services like free invoicing tools, business loans, overdraft protection, account software integration, cashback rewards, and business service discounts.

If you have an international business, you will probably need an account with multi-currency support and competitive foreign exchange rates.

The documents you need for creating a London business bank account

London banks follow strict Know Your Customer (KYC) and Anti-Money Laundering (AML) policies. This is why the following key documents are needed: 

• Proof of Identity (e.g. passport or driver’s license) for company directors or owners
• Proof of Business Address (recent bank statement, utility bill, or council tax statement)
• Full Business Name and Contact Details 
• Business Registration Certificate/Company’s House Registration Number
• Estimated Annual Turnover 

Other important documents include tax identification details and financial statements or projected cash flows.  

Creating a business bank account in London

Opening a business account in London is mainly done online nowadays. Once you have the aforementioned documents, you can proceed to fill the form on the bank’s website.

Depending on the bank, the process may take between ten to thirty minutes. However, there is no need to rush. The most important thing is getting right.

After the application, you can expect an instant response for banks that automate the process. Others may take a few business hours or days to give you the status of your application.

The big four: Choosing a bank

London is home to some of the most established financial institutions in the UK and the world, including the big four that dominate its banking sector: Barclays, HSBC, Lloyds, and NatWest Group.

Barclays

Barclays offers startup-friendly packages such as free banking for the first one year. Opening an account with Barclays offers:

• access to secure online banking platforms
• easy integration with your business accounting software
• a reliable customer support team available on phone or live chat

HSBC

This is one of the best banks for international companies as it provides multi-currency accounts, trade financing, and dedicated relationship managers. Other features of HSBC include:

• free banking for the first one year and a subsequent monthly fee of £10
• availability of overdraft facilities 
• no charges for electronic payments

Lloyds Bank

Lloyds has a strong local presence and is a go-to for SMEs as its accounts include invoicing tools, credit options, and account software integration. It also offers:

• no transaction fee for the first one year, then £6 per month
• internet and mobile banking   

NatWest Group 

When you create an account with NatWest, you are offered free business banking for the first 24 months. Other offerings include: 

• access to its FreeAgent, its accounting software
• internet and mobile banking
• dedicated customer support team that can be messaged securely in-app or online 

Can foreign entrepreneurs open a business account in London?

Non-UK residents can open a business account in London, though it may be a complex process due to strict AML checks, fraud concerns, and associated administrative costs.

Top banks like Barclays, HSBC, and Lloyds Bank do not provide business banking services to non-UK residents, even if they are citizens.

However, digital banks like Revolut and Tide offer a simplified pathway for foreign businesses to own accounts in London. 

Making the right choice for your business

Having the right business account is essential for your business’s financial stability and operational efficiency.

Bear in mind that the ideal account should align with your business structure, transaction volume, and accessibility needs, among other factors.

With the numerous banking options available in London, it is necessary to compare banks based on their fees and features like customer support and innovative financial solutions. By carefully weighing your options, you can secure an account that supports your growth and long-term success.

However, beyond securing a London bank account, managing international payments seamlessly is just as important – especially if your business operates across borders. With OhentPay, you can send and receive international payments quickly, directly to bank accounts, and at the best rates. 

Ready to make seamless international transactions? Sign up on OhentPay today.