How the Corporate Transparency Act Changed Banking for Non-Resident LLCs

If you have tried to open a U.S. business bank account as a non-resident in the last few years, you have probably noticed that the process seems much more demanding than it used to be. Banks and fintech platforms are asking for more documentation and running compliance reviews on accounts that were opened years ago.

This is not your imagination. New U.S. legislation explains why the environment shifted, and understanding is critical for non-resident LLC owners not to get caught off guard. 

The Law That Changed Things: The Anti-Money Laundering Act of 2020

The primary driver behind the tightening of U.S. business banking requirements is the Anti-Money Laundering Act of 2020, commonly referred to as the AMLA. This wide-ranging law includes significant reforms to how the United States monitors and regulates financial activity.

The AMLA was the most substantial overhaul of U.S. anti-money laundering law since the USA PATRIOT Act was passed in the wake of the September 11 attacks. Its core provisions expanded anti-money laundering (AML) and know your customer (KYC) requirements across the financial system. The law requires greater transparency around who actually owns companies, encourages stronger information sharing between banks and federal regulators, and increases regulatory scrutiny of shell companies and accounts associated with higher-risk foreign ownership.

Note that the AMLA did not prohibit non-residents from opening U.S. business bank accounts. It did not explicitly impose new documentation requirements. What it did was raise the overall compliance expectations for financial institutions, and banks responded by significantly tightening their internal policies.

The Corporate Transparency Act: Beneficial Ownership Disclosure

Embedded within the AMLA was the Corporate Transparency Act, or CTA. This law requires U.S. companies, including LLCs, to disclose information about their beneficial owners to the Financial Crimes Enforcement Network (FinCen), a bureau of the U.S. Treasury Department. The purpose was to eliminate the anonymity that had made U.S. shell companies attractive for money laundering, tax evasion, and other financial crimes.

The CTA was aimed squarely at anonymous shell companies, not at legitimate foreign entrepreneurs. However, the effect on non-resident LLC owners has been significant. Banks and fintech platforms took the CTA’s beneficial ownership requirements as a signal that regulators expected them to know who was behind every business account: where they lived, what the business actually did, and whether the company had a genuine U.S. presence.

Beginning around 2021 and accelerating through 2023, banks and fintech platforms (including Mercury, Relay, Wise, and others) began significantly tightening their onboarding procedures for foreign-owned LLCs. The specific changes that affected non-resident applicants most directly included:

• Using a commercial business address vs. a registered agent address. Before this shift, many platforms accepted a registered agent’s address as a business address for account opening. After it, compliance departments began specifically distinguishing between legal agent addresses and operating addresses, and rejecting the former for banking purposes.
• Requesting signed lease agreements as proof of business address. A registered agent address, a virtual mailbox, or a CMRA-registered virtual office cannot produce a signed commercial lease or utility bill. This single documentation requirement eliminated the most common workarounds that non-resident founders had relied on.

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Summary

The Anti-Money Laundering Act of 2020 and the Corporate Transparency Act did not prohibit non-resident banking or create explicit new barriers for foreign entrepreneurs. What they did was usher in a significantly stricter AML and KYC compliance environment that led banks and fintech platforms to adopt much more rigorous onboarding and verification procedures for foreign-owned LLCs.

Having an LLC registered in Wyoming or Delaware with no identifiable U.S. operational presence, no lease, no utility account, and no verifiable address beyond a registered agent’s office is precisely the profile that regulators pointed to when describing the shell company problem the AMLA was intended to address.

Non-resident founders who build their LLC infrastructure on compliant documentation from the start — e.g. a genuine commercial address backed by a signed lease — are operating within a framework that holds up to scrutiny. The founders who run into problems are almost always those who relied on shortcuts that once worked but are no longer sufficient.