Virtual address is a problem for a company

Virtual address is a problem for a company

Many companies use a so-called virtual address for their business instead of a real office during the registration process and afterwards. It is understandable that they want to save money, time and not worry about renting premises and the responsibilities that go with it. However, this does pose a number of problems at the present time, particularly when it comes to setting up bank accounts for start-ups and declaring a company as a VAT payer.

1. Virtual address and banks

For some time now, banking establishments have been maintaining virtual address blacklists, often with large offices offering such services. With this type of address agreement – for a virtual address – you run the risk of having your application for a bank account immediately rejected. Without a bank account, a company cannot function properly.

2. Virtual address and VAT registration and reimbursement

A problem can also arise when registering a company for VAT and VAT-EU. If you do not have a contract for an actual office and business premises, your application will be accepted, but you will automatically receive a letter to complete the application with a contract for an actual and not a virtual address. Its absence may result in the rejection of the application.

The same may apply to a VAT refund. In this situation, there is always a check by the Tax Office, which will require the contract to be presented to the company’s real office address, otherwise the refund will not be made. This is especially true if larger sums of money are involved.

3. Why a virtual address is frowned upon by banks and Offices

Why are virtual offices viewed unfavourably by banking and tax authorities? There are several reasons for this. Virtual offices can potentially be used for:

• to register fictitious companies,
• as an address for credit and financial fraud,
• to identify a fictitious company seat,
• registering multiple companies at a single address.

4. Summary

Therefore, we suggest you consider signing a contract for a real address already at the level of company registration in order to avoid problems that its absence may lead to in the future.

Progress Holding, for its part, meets the needs of its clients and offers an agreement not for a virtual, but a real office address – a rental agreement. It provides the company with office space if necessary and eliminates problems that may arise when having only a virtual address.

If you have any questions, please contact us at ofice@progresshloding.pl.