Many founders abroad end up with Wise Business, often as a second account beside Mercury. It gives a US company US account details, and it does one thing a US bank does badly: it moves money home at close to the real exchange rate. It isn't a bank, though, and it's worth knowing what that means.
What it is
Wise is a licensed money transmitter and electronic money institution, regulated in the countries it operates in, and it safeguards customer money rather than lending it out. A Wise Business account in the company's name can hold balances in dozens of currencies, with local account details in several: US account and routing numbers for ACH and wires, a UK sort code and account number, a euro IBAN and more. A US client pays the company's US details by ACH, and the money arrives as dollars in the Wise balance.
Who can open one
Wise supports businesses registered in the US, and it checks the company, with its formation document and EIN, and its owners, with passports and proof of address. It also publishes a list of the countries where people can hold money with it. Croatia, Latvia and the Philippines are on that list; Nigeria, Pakistan, India, Bangladesh and Ukraine aren't. Wise doesn't say exactly how that list applies to the owners of a US company, so if you live somewhere that isn't on it, check during sign-up before you rely on the account. Wise can't serve anyone in a sanctioned country.
What it costs
- A one-time fee to open the account and get local account details.
- Receiving US dollars by ACH is free; receiving a wire costs a small fixed fee.
- Converting currencies costs a percentage of the amount, usually well under 1% for major currencies, at the mid-market rate.
- Sending to a bank account in another currency costs the conversion fee plus a small transfer fee.
- Cards are available in the countries where Wise issues them for business accounts.
Compared with a bank's international wire and exchange rate, moving money home through Wise usually costs noticeably less.
What it's good for
- Receiving payments from US clients, platforms and marketplaces that pay by ACH.
- Paying contractors and suppliers in other countries in their own currency.
- Moving the company's profit to your account at home, recorded as a distribution.
- Having a second set of US account details if your main account is slow.
What it isn't
- Not a bank: there's no deposit insurance in the US sense, though money is safeguarded under the regulator's rules.
- Not a cheque account: it doesn't issue or accept paper cheques.
- Not a lender: no credit and no overdraft.
- Not for cash, or for holding large balances long term, which is what a bank and its treasury products are for.
Keeping it straight
Every transfer from the company's Wise balance to your personal account is a distribution, and it belongs on Form 5472, so label it that way. Keep the company's Wise account separate from any personal Wise account, and never move other people's money through either.