Bank account risk factors and red flags for foreigners

Japanese banks routinely refuse foreign directors of young companies without explanation, especially when the business is linked to Russia (the director's citizenship or incoming transfers) or to cryptocurrency. There are known cases where even a Japanese citizen was refused an account because the company had no turnover or had a non-resident co-owner — banks assess risk based on the whole company structure and history, not just the applicant's passport. Large "mega" banks — MUFG, Mizuho, and regular SMBC — are harder on new, small companies, even though holding an account there adds credibility with business partners; MUFG has refused applicants even when they already held a personal account at the same bank. The recommendation for new companies is not to start with the mega banks but with regional, smaller, or industry-specific banks, which are more willing to open accounts for new companies. Some banks (Aozora, SMBC, SBI, etc.) send unsolicited invitations to open an account after a company's first closed annual financial report — this does not guarantee approval if the company reapplies. Account opening can take up to a year even for Japanese citizens. Most Japanese banks maintain internal, largely unpublished lists of "problem" countries for international transfers, which change periodically without warning. Countries that have appeared on such lists at various times include Iran, Iraq, North Korea, Kazakhstan (removed and re-added), the UAE, Israel, South Africa, Bulgaria, Monaco, Croatia, Cambodia, Jordan, Morocco (later removed), and Bolivia (added). A transfer linked to a listed country can lead to a full, long-term block on receiving transfers at that bank. Sumishin SBI Net Bank (netbk.co.jp) is one of the few banks that publishes its list of problem countries for international transfers (around 53 countries at the time of publication); in one real case a payment from the UAE led to a full block on the remittance-receiving function. MUFG is notable in that, according to several entrepreneurs in the car-export business, SWIFT transfers from Russia still go through this bank, unlike most others. A Russian passport is a persistent red flag for Japanese banks when opening a corporate account and processing international payments, regardless of whether the line of business is formally sanctioned. According to a secondhand account from a bank compliance officer: a Russian passport triggers enhanced due diligence; UAE jurisdiction is also treated as a red flag (reputation as a money-laundering hub); the combination of "Russian passport + UAE" is an especially high-risk combo; Kazakhstan is also flagged as a risky jurisdiction. Banks sometimes ask Ukrainian citizens to prove they have funds (a bank statement from a Ukrainian account). The combination "crypto + Russia" in a business is a particularly negative signal for banks (a "fatal combo"); a company with export activity in its articles and a Russian owner/passport will almost certainly struggle to open accounts. When reviewing ownership structure on bank forms, banks generally look at voting rights rather than simple capital share — in one real example an applicant had 53% of the capital but 100% of the voting rights because the co-founder's shares were non-voting; a business account for a company with a large non-resident shareholder is viewed cautiously by banks, especially SBI. When registering a new company, a lawyer may point out that notification to METI (Ministry of Economy, Trade and Industry) and the Bank of Japan becomes mandatory once foreign ownership reaches 25% or more — especially relevant for IT companies or dual-use goods. The cost of hiring an outside accountant to prepare and submit a corporate bank account application is roughly 30,000 yen in one example from the chat. Source: https://www.netbk.co.jp/contents/resources/pdf/gaika_country.pdf — Sumishin SBI Net Bank's list of countries with restrictions on foreign-currency transfers.