How Does My Worldwide Hashish Firm Do Banking within the U.S.?

0
41
Does My International Cannabis Business Need to Register in the U.S.?

It can be difficult and confusing for an international cannabis company to figure out the best way to do banking in the United States. We know this because it is even confusing for domestic marijuana and hemp companies in the United States to determine who to bank with.

Banking is not limited to traditional large international banks. Credit unions, many of which are restricted to certain states or certain areas of certain states, were among the first financial institutions to offer banking services to cannabis companies. In addition to credit unions and bankers, payment processors and payment software companies are also good resources for finding the right banking institution as they work with many.

Smaller banks are generally uncomfortable doing business with a foreign company as they do not have the resources to conduct international “KYC” (you know the customer due diligence required by US banks), but we have Collaborated with a few smaller U.S. banks that specialize in the cannabis industry and even in the international cannabis industry. For some banks, a payment to or from a place like Hong Kong always raises flags in their internal systems, and some are willing to deal with this complexity while others don’t.

Larger international banks are more willing to help you open a US bank account. HSBC has locations in Washington, California and New Jersey as well as Hong Kong and Singapore. As a result, HSBC is well positioned to perform the necessary KYC due diligence for an Asia-based company and to help you open a US bank account.

I recently spoke to a representative from HSBC in the US to ask two questions about whether international companies are: (1) opening a US bank account in Hong Kong or Singapore, or (2) opening a bank account in Hong Kong or Singapore and receiving payments at can use a US subsidiary of HSBC. The answer to these two questions was no. To open a US account with HSBC, you would need to set up a US subsidiary.

It is possible that HSBC and other major international banks will be satisfied with a foreign company registering directly to do business in the US without establishing a US subsidiary. It would be worth contacting several larger international banks with US branches to further investigate their requirements. It’s always worth reaching out to smaller cannabis-centric banks and service companies that are researching cannabis customers for traditional small banks and credit unions. I have spoken to a few smaller cannabis-focused banks that also specialize in international cannabis customers and that do not require a foreign individual to come to the US to open an account. This service is helpful regardless of the applicable travel restrictions of Covid.

A payment software company I spoke to recently works with many banks. At least one of these banks in the UK will provide a US bank routing number to a foreign company so that US-based customers can make payments to that US account. Once payment has been made, the UK bank will need 3-5 days to transfer the payment to an account abroad.

This particular structure was focused on a company that used credit card payments. You would have to pay a 3% processing fee for credit cards, which would significantly reduce your sales margins, and the bank would also charge a percentage fee per transaction. Some states allow you to charge your buyers the 3% processing fee, so this may remain a viable option for you.

Lastly, I need to highlight the US immigration issue for non-US citizens who are somehow involved or considering getting involved in a US cannabis-marijuana business, be it from their home country or while you are in the US . My colleague Akshat Divatia wrote a cautionary blog post discussing how foreign involvement can cause significant USCIS (US Citizenship and Immigration Services) and USCBP (US Customs and Border Protection) problems. In this post, Akshat wrote:

Even a foreigner who has never used marijuana could be declared inadmissible under the INA [Immigration and Nationality Act] based on his or her involvement in a [U.S.] legal cannabis [marijuana] Business, either as a “knowing helper, advocate, assistant, conspirator or collusion with others” or as an “illegal trafficker” of a controlled substance.

In short, if you are a non-US citizen and think you would like to get in some way in a US state-legal marijuana business and have plans to enter the US, you should contact us contact an immigration attorney In front You are coming to the US and before engaging in US marijuana business activities.

For previous posts in this series, read the following: