If you are in the E-commerce world, you know that most Dropshipers or sellers in general, are not the biggest fans of PayPal. Don’t get me wrong they are great for customers but they can cause a headache to merchants and sellers.
So today we will dive in the PayPal world and see what info/steps people sometimes forget.
So sit back, open your notebook, read carefully, and start taking notes:
1 – Opening a Business Account: The Basics
You have to first have a business, it can be a Partnership, Public company, Private company, Not for profit organisation, or a Government entity that has a registered business address and how lucky you are that its part of our Ecom package at KingsLaunchese. If you have it covered then you can start the process with visiting https://www.paypal.ae, or the correct country where you want to open your PayPal account in, you click Sign Up’ and ‘Business Account, then ‘Next’.
In the next step, you have to enter a Business email address specifically used for business, it contains the company name in it like [email protected], it is where the payments will be sent and will be visible to the customers so no funny names.
2 – Business information
The next part is where you provide PayPal with all your business info so fill it very carefully, the account holder will have the full authority of the PayPal account, to act on behalf of the company, he can also add sub-users to the account, with varying permissions that are determined by the account holder, that person will also have to provide proof of identity for KYB.
The account holder will also have to use his residential address in the Home address section.
3 – Stakeholders
If your business has stakeholders then you are required to provide their information and a copy of the stakeholder’s Photo ID later, If there is more than 1 beneficial owner, those who own 25% or more of the company then you need to add them all. But If the stakeholder does not own any percentage of the company, then just enter 0 in the Ownership Percentage box.
4 – FATCA
I know what you are thinking “What the hell is a FACTA?”, well FACTA ladies and gentleman stands for Foreign Account Tax Compliance Act and its a U.S. law that seeks to prevent U.S. tax evasion by using offshore accounts. This law requires financial institutions such as PayPal to report on accounts held outside the United States but belong to U.S. persons. If a merchant is a non-U.S. PayPal account holder, they will need to provide additional information to PayPal and certify the address and non-U.S. status.
You can access it by clicking on the ‘Summary’ tab and you will be presented with a red alert, click the blue link with “collect additional information”, this is very important so please read it carefully before answering because if you do not complete the information your account will be restricted after 90 days, If you find yourself unsure about any question just click on the ‘Learn More’ link, for more info.
5 – Bank Account details
Something a lot of people face a bit of difficulty in, the bank account you will be linking with your Business PayPal has to be in the name of the business entity registered on the account i.e in your company’s name. Then you will see at the bottom that PayPal will require to send 2 small deposit amounts (less than £1.00GBP) to that bank account and retrieve them back in 1 withdrawal. This is done to confirm your bank account and can take and it can be completed in a few minutes and sometimes can take up to a few hours.
6 – (KYB) documents
Lastly, you will need to have the KYB documents or as PayPal call them the Know Your Business documents and they are very simple:
- You have to get the Letter of Authorisation signed by selected Account Holder and anyone else added with money moving permissions.
- You need Proof of ID for the account holder, it can be a Driving licence, passport, or just a government-issued identity card.
- If you have anyone else added with money moving permissions or is a beneficial owner/stakeholder they will too need to provide proof of ID just like the account holder.
- A Copy of a recent bank statement for the bank account which is being added to the PayPal account (This is a requirement for government entities).