Expanding your startup to the US can open doors to new customers, investors, and growth opportunities. Whether you’re looking to hire American talent, secure US-based customers, or attract investors for your next funding round, setting up a deposit-insured US business account can simplify your operations and build trust with partners across the border.
In this article, we’ll cover the benefits of opening a US bank account as a Canadian founder and walk you through how to set one up while based in Canada.
Why a US Bank Account Matters
If you plan on accepting US credit card payments, or want to open a US-based storefront on Amazon, eBay, Etsy or TikTok to reach US customers, or want to show US investors that you’re serious about expanding south of the border then having a US bank account is a must. Here are some other reasons to consider a US bank account:
Helps you get paid faster
US clients prefer dealing with a US-based bank account to process payments and transactions faster through ACH transfers
Avoiding fees
Having a US bank account helps you avoid international wire fees and currency conversion fees if you deal with USD regularly
Building credibility
If you have a US bank account, it helps you look more established and builds trust with US-based clients and partners
Simplifies tax filing and reporting
Keeping your US finances in a separate account can make your year-end accounting much easier
Gives access to US tools or platforms
Having a US-based Stripe or PayPal account can lower your overall processing fees if you’re accepting a lot of US payments
“The US dollar is the world’s reserve currency. If you’re a Canadian startup founder, incorporating in a US state and opening a US bank account opens a lot of doors,” said Nestor Castillero, Founder & CEO of Maera, a company that helps international entrepreneurs simplify the process of launching a US company. “If you’re serious about scaling your business, you’re going to quickly outgrow traditional accounts.”
“If your customers are all based in the US, they’re a lot more likely to trust your company with a US address, US bank account and recognizable payment processors,” said Qi Cao, Founder and CEO of Chargeblast, a chargeback prevention tool designed to help fast-growing startups reduce payment disputes.
How to Set Up a US Business Bank Account from Canada
Setting up a US business bank account from Canada is becoming easier, especially with fintechs that specialize in helping non-US entrepreneurs.
Here is a general step-by-step process:
1. Form a US company
The majority of platforms require an LLC or corporation that is registered in the US. Consider states like Delaware or Wyoming for their business-friendly policies and zero state income tax.
2. Get an EIN
An EIN will serve as your company’s tax ID number from the IRS.
3. Choose your banking provider
You can opt for a US branch of a Canadian bank, a traditional US bank (albeit much harder to apply for), or fintechs like Adro, Brex or Relay.
4. Submit the required documents
This typically includes your company formation documents, EIN, valid passport, and proof of address.
When it comes to company formation and getting an EIN, you can do it yourself or use a registered agent.
In the next section, we’ll give you a brief overview of the differences between a traditional bank and fintechs so you can easily decide which one is right for you.
Pros & Cons of Fintechs and Traditional Banks
One of the most important decisions Canadian founders have to make is deciding where to open a US bank account, whether it’s through a traditional bank or a fintech. In all cases, it’s important to look for deposit insurance. If you’re familiar with CDIC in Canada, FDIC is the American equivalent.
Traditional Banks
Traditional banks can be an option for Canadian founders looking to open a US business bank account, especially if you prefer face-to-face service or already have a relationship with a Canadian bank with US operations. However, there are key trade-offs to consider when going the traditional route.
Pros:
- Familiar banks with brand recognition that have Canadian ties to other institutions
- In-person support and physical branches
- FDIC insurance on US accounts
Cons:
- Slow and tedious onboarding process
- Higher international wire transfer fees and currency exchange rates
- Strictly requires US address and in-branch visit when signing up
Fintech Platforms
Fintech platforms have emerged as a convenient alternative for founders who want to open a US business account remotely and start operating quickly. While they’re designed for digital-first businesses, it’s important to understand their strengths and limitations.
Pros:
- Tend to offer online account sign up
- Lower fees on sending and receiving wire transfers
- Has built-in tools for accounting and payments
- Designed for global, digital-first startups
- Some fintechs also offer FDIC insurance
Cons:
- No physical branch access
- May require some understanding and familiarity with new tools or interfaces
For startups that are moving quickly, opening an account at a fintech company is the best option, especially if you’re not planning to travel to the US anytime soon.
Final Thoughts
Canadian founders aiming for the US market should seriously consider a US business bank account. It makes US payments simple and builds trust with American customers, investors and suppliers. If you’re already incorporated in the US, then you’ve already completed the hardest step. As cross-border businesses become increasingly common, founders who take the initiative and lay the right groundwork will be better equipped to grow quickly and smartly.
