Using a virtual mailbox offers business owners a wide range of benefits, from enhanced privacy and security to increased convenience and beyond. But will having a virtual mailing address impact your business’s ability to open a business bank account?
This is a question we hear a lot at Stable, so we thought we’d take the time to thoroughly address it here. If you’re considering setting up a virtual business address, here is everything you need to know about how it will impact the process of creating a business bank account.
What is a virtual business address?
Before we get into how to open a business bank account using a virtual address, let’s start by taking a look at what virtual addresses are and how they work.
With a virtual address service, your business gets a real street address as if you were using a physical address. But instead of having your mail delivered to a mailbox, it goes to the virtual address provider’s mail center for sorting, processing, and storing.
Once a parcel arrives at the mail center, you’ll typically have the options of mail forwarding, scanning, and shredding.
Some providers, like Stable, also offer registered agent services to further simplify the process of mail handling for businesses operating across multiple cities or states. With Stable, you also have the option of forwarding mail and packages to another location (such as your home address).
Virtual mailbox services provide a lot of benefits to entrepreneurs, online business owners, digital nomads, expats, and anyone who wants to take the hassle out of mail handling.
They offer an unmatched degree of privacy and security, allow you to view your mail online without going to a post office, and permit business owners to use a real street address instead of a P.O. Box.
Do banks accept virtual business addresses?
Most banks will accept a virtual business address for LLCs and business owners wanting to open a bank account for their company.
In cases where your bank doesn’t allow you to open a business bank account using a virtual address, you can often open the account with a physical address and then later change it to your virtual address without any issue. Just be sure to ask your bank what their policy on virtual addresses is ahead of time to avoid any problems.
A lot of times, banks will require a "proof of address" document when opening a business bank account. For a physical address, this typically means providing things like a lease, utility bill, or credit card statement.
For virtual business addresses, you’ll need to work with your service provider to obtain proof that the address is actually yours. Stable, for example, can provide a proof of address letter on your behalf to satisfy this requirement.
Will banks accept a virtual address when opening a personal checking account?
Virtual addresses usually work fine when opening a business bank account using the technique mentioned above. Unfortunately, this isn’t the case for personal savings and checking accounts.
If you want to create a personal account, you must submit a residential address for verification. While this may change at some point in the future as the popularity of virtual addresses continues to grow, using a virtual address to open a personal bank account is currently not an option.
Legal and regulatory considerations of using a virtual address in banking
It should come as no surprise that banks are required to follow a lot of laws and regulations. Here’s a brief look at how some of these requirements apply to opening a bank account with a virtual address:
Federal law
There are no federal laws that explicitly prohibit using a virtual address for business banking. However, banks are required to abide by the Patriot Act, which dictates that banks must verify a customer’s identity and physical location (among other things) before allowing them to open an account. This is for Know Your Customer (KYC) compliance — a policy designed to help fight money laundering and other financial crimes.
State law
Regulations regarding virtual addresses for businesses will vary from state to state (and from bank to bank). To ensure compliance, you’ll need to check your state’s regulations pertaining to virtual addresses for business banking — as well as your bank’s policies.
Can a virtual address be used for taxes?
Yes, a virtual address can be used for filing business taxes. However, the IRS does not allow individuals to use a virtual address when filing their personal taxes; a personal address is required.
What do you need to open a business bank account?
Regardless of whether you plan to use a virtual address or physical address for your business, you'll need several documents to open a business bank account, such as:
- Employer Identification Number (EIN) or Social Security number if you're a sole proprietorship
- Your business's formation documents
- Ownership agreements
- Business license
For more information on how to open a business bank account, check out this guide from the U.S. Small Business Administration.
Easily get a virtual address for your business with Stable
A virtual address offers a broad range of benefits to businesses of all sizes, from improved privacy and security to the convenience of accessing your mail from any location.
If you would like to get a virtual address for your business that includes helpful services such as a secure mail viewing online portal, mail forwarding, mail storage, mail shredding, and more, Stable can help.
Ready to create a virtual address for your business in just a few easy steps? Get started by signing up for Stable today!
