Corporate banking
Banking a holding company or SPV
A vehicle whose only activity is owning something else has no revenue to describe and no customers to name — which is exactly the file compliance finds hardest to approve.
The reality
What the bank is actually deciding.
Holding companies and special purpose vehicles exist to own assets — shares in operating companies, real estate, intellectual property — rather than to trade. That creates a distinctive banking problem: the standard compliance questions about customers, corridors, currencies and volumes have no meaningful answers, because the entity does not do any of those things. Left unaddressed, the file reads as a company with no discernible business, which is the profile anti-money-laundering training is built around.
The way through is to replace the missing commercial narrative with an explicit structural one. Why does this vehicle exist? Segregating a joint venture from the founders' other interests. Ring-fencing property so a trading company's liabilities cannot reach it. Holding intellectual property so licensing income is separated from operations. Preparing for a succession event. Each of these is a legitimate, familiar reason that a compliance officer can record, and each is materially better than leaving the section blank. Vehicles incorporated in ADGM or DIFC bank more easily than others, because the SPV regimes there are designed for this and the registries are trusted.
What gets asked for
- Activity
- Holding, not trading — no customer flows to describe
- Key document
- A written rationale for the structure
- Best jurisdictions
- ADGM and DIFC SPV regimes
- Expected flows
- Dividends, capital contributions, occasional disposals
- Common alternative
- Bank the operating company instead
- ESR
- Holding companies are a Relevant Activity — check the notification
Where the time goes
The file
What to put in front of them.
- Write the structural rationaleOne page: what the vehicle owns, why it is separate, and what money will move through it and how often.
- Choose the jurisdiction with banking in mindADGM and DIFC SPVs are read most easily. An offshore vehicle is the hardest.
- Describe the expected flows honestlyDividends annually, a capital injection at formation, a disposal at some point. Low volume is fine; unexplained volume is not.
- Link it to the operating companyWhere the operating entity banks with the same institution, the holding vehicle's account becomes far more straightforward.
- Check the ESR positionA holding company is a Relevant Activity for economic substance purposes, and a notification is due even where no income arises.
Related
Questions
Often not. If the vehicle only holds shares and receives occasional dividends, banking the operating company may be sufficient.
ADGM and DIFC, whose SPV regimes are purpose-built and whose registries banks trust. Offshore vehicles are the hardest to bank.
Holding, with a written explanation of what is held and why it is separate. A blank or generic answer is what causes the problem.
Yes — holding company is a Relevant Activity, and a notification is generally required even where no income has been earned.
One question
Where will the money actually come from?
Then the account is a cross-border file, and the compliance question is which countries and in which currencies. Name the corridors in the application rather than waiting to be asked — an unexplained payment from a jurisdiction the bank did not expect is what freezes accounts in month three.
What the file has to containOr just ask usThen substance is the question rather than geography. A local trading history, an Ejari and a customer list make this straightforward; a flexi-desk with no domestic contracts yet is where onboarding slows, and the fix is evidence rather than a different bank.
Why applications get declinedOr just ask usThen source of wealth carries the file, and 'savings' is not an answer. A share sale agreement, a property disposal, audited accounts from an overseas company or a series of tax returns are. Assemble that before the first meeting, not after the first question.
Evidencing source of fundsOr just ask us