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What Makes a Company High Risk?
Whether you’re planning to establish a new company or expand your existing business worldwide, we are here to provide you with comprehensive assistance every step of the way. With our expertise and extensive global network, we specialize in helping entrepreneurs and businesses navigate the complex world of corporate services.
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A high-risk business is a company that operates in an industry or engages in activities with elevated risk and potential liability. Compared to low-risk businesses, high-risk businesses are frequently subject to stricter regulations and face greater difficulty obtaining financial services.
Here are some comments regarding the factors that determine whether a business is deemed high risk:
Financial institutions, payment processors, and regulatory bodies frequently evaluate these factors when assessing the risk associated with a particular business. Being categorized as a high-risk business can affect the company’s access to financial services, the cost of processing transactions, and the level of scrutiny placed on its operations.
If your company gets labeled as high risk you will have a hard time getting insurance, merchant accounts or financing. Businesses categorized as high risk in Europe can get a high risk merchant account in order to accept credit or debit card payments. The level of risk associated with a business may vary depending on the type of business.
More and more online businesses are applying for high risk merchant accounts as they are considered in risk of failing or encountering problems in the future. A lot depends on the type of industry your company is involved in. The types of internet businesses that are considered high risk companies include:
Internet dating sites
Online auction sites
Online media
Fortune telling and horoscope sites
Multi-level marketing
Software download companies
Online travel industry sites
Telemarketing businesses
Telecommunications
Online holiday planners
Forex companies
VoIP services
Property rental sites
Health supplement, pharmaceutical and vitamin sites
Banks and financial institutions consider online businesses particularly prone to be high risk because of their vulnerability when receiving credit card payments online; canceled transactions; the high number of chargebacks; returned items and refunds. It doesn’t really matter how ethical, organized or well-planned your online business is; if it is online it inevitably comes with a high level of risk and this is recognized by banks and financial institutions.
Online businesses that experience a high volume of traffic and turnover are at risk of fraud from within the company and from the clients. Many online businesses, especially gaming businesses and Forex are based in offshore jurisdictions where historically money laundering and fraud have been a problem in these industries. Gaming companies are a typical example of high risk businesses. With a gaming business risks include chargeback disputes; legal issues; the danger of gambling addiction; clients from many different jurisdictions across the globe and simply the nature of the business.
Whatever the risks, all online companies need a payment gateway, merchant bank account and business bank account. If the online business is new they will have no credit and transaction history to show potential banks. If startup businesses are in one of the high risk industries, then that makes it even harder to find a bank willing to offer them an account.
Welcome to GBO, the industry-leading company in corporate services. Whether you’re planning to establish a new company or expand your existing business worldwide, we are here to provide you with comprehensive assistance every step of the way. With our expertise and extensive global network, we specialize in helping entrepreneurs and businesses navigate the complex world of corporate services.
Company formation is one of our core areas of expertise. We recognize that establishing a new business can be a daunting task, particularly if you are considering international operations. Our team of seasoned professionals is therefore well-equipped to guide you through the entire procedure. We will ensure that your new business is established efficiently and in accordance with local laws, allowing you to focus on your core business objectives.
In addition to company formation, we also provide services for opening corporate bank accounts in a variety of jurisdictions. We recognize the significance of streamlined financial operations for businesses, and our team has developed strong relationships with reputable financial institutions around the world. Whether you require a business bank account, a merchant account, or other financial services, we can assist you in locating the most suitable options for your particular needs.
Working with international financial institutions is one of our core competencies. Our extensive network enables us to connect you with reputable banking partners, ensuring that you have access to a variety of financial solutions tailored to your business’s specific requirements. We can guide you through the complexities of global financial systems, from facilitating international transactions to optimizing cash management.
At GBO, we take pride in providing individualized service and customized solutions to our clients. Our team of specialists will work closely with you to comprehend your specific needs and provide individualized solutions that align with your objectives. With our extensive array of corporate services and global expertise, you can rest assured that your business will receive the assistance it needs to thrive in today’s dynamic and competitive environment.
Contact us today to learn how GBO can assist you in forming your new international company, opening corporate accounts, and working with international financial institutions. Allow us to be your reliable partner on your path to success.
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