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The Rule Most People Learn About Too Late: Substantial Presence 

In the U.S., eligibility is heavily influenced by IRS residency standards, including the Substantial Presence Test. 

In simplified terms, it evaluates: 

• Physical presence in the U.S. 

• Days spent in the country over a rolling three-year period. 

• Whether the individual can reasonably be considered under U.S. oversight 

If you do not meet these standards, you are generally treated as a non-resident individual for tax and financial compliance purposes — regardless of your U.S. entity. 

From a processor’s standpoint, which means: 

• Increased AML risk 

• Limited regulatory reach 

• Higher chargeback exposure 

• Difficulty enforcing agreements. 

Which equals declines, shutdowns, or funds held. 

Why Stripe and PSPs Shut These Accounts Down 

You typically see one of two outcomes: 

1. Immediate Decline

Automated platforms like Stripe flag: 

• Non-resident ownership 

• Foreign access patterns 

• Jurisdiction mismatches 

• Unsupported risk profiles 

Result: “We’re unable to support your business.” 

2. Delayed Termination

Sometimes the account is approved initially. 

Then: 

• Volume increases 

• A payout is requested. 

• A review is triggered. 

• More documentation is requested. 

And suddenly the account is closed — often with reserves or fund holds. 

This isn’t personal. 
It’s risk management. 

Reddit Post About this subject  

What Does NOT Work (And Gets “Fished Out” Eventually) 

This part is critical, because I see people attempt these workarounds every single day — and they almost always fail. 

 Straw Signers 

Using a U.S. person who: 

• Doesn’t understand the business. 

• Isn’t operationally involved. 

• Can’t explain transactions, customers, or flow of funds. 

These are flagged quickly during reviews or disputes. 

 Using Someone Else’s Stripe or Merchant Account 

This includes: 

• Friends 

• Relatives 

• “Partners” in name only 

It may work briefly — until: 

• A chargeback occurs. 

• A compliance review happens. 

• A tax or reporting issue arises. 

When it breaks, it breaks badly. 

 Fake U.S. Addresses or Virtual Presence Tricks 

Mail drops, VPNs, and forwarding services do not create regulatory presence. 

Processors see through this fast. 

 Assuming a Bank Account = Approval 

A bank account is not underwriting approval. 
Different rules. Different liability. 

What Actually Works Instead 

This is the part of the most incorporation services and YouTube gurus skip — because it’s harder and less flashy. 

What does work depends on structure, risk, and transparency. 

 Legitimate U.S. Presence or Residency 

If you meet residency or presence requirements, underwriting becomes dramatically easier. 

 Properly Structured U.S. Operating Partner 

A real partner: 

• Has authority 

• Understands the business. 

• Is accountable. 

• Passes underwriting independently. 

Not a name on paper. 

The “Straw Signer” does not work, banks, ISO’s and processors have caught on to this and look at the persons background etc.. and take into account the person jobs etc.. and sometimes emails or questions come up about the  

 Using the Right Merchant Account (Not Just Stripe) 

Traditional merchant accounts with proper underwriting often succeed where Stripe fails — if structured correctly from day one. 

 Jurisdiction-Appropriate Processing 

Sometimes the right answer is: 

• EU processing for EU operators 

• UK processing for UK control 

• Cross-border structures that are compliant, not hacked together. 

 Getting Advice Before You Build 

This alone saves people tens of thousands of dollars. 

Many companies that are in other countries have successfully opened up companies in the USA and we have experience of working in these cases.  

This Is Not Just a U.S. Issue 

These same principles apply in: 

• The EU 

• The UK 

• Canada 

• Australia 

Forming a company in a country does not bypass financial compliance in that country. 

The Real Cost of Not Knowing This 

The worst part isn’t rejection. 

It’s watching people: 

• Build websites. 

• Spend on branding. 

• Run ads. 

• Launch products. 

Only to discover that payments were never viable to begin with. 

That information should come first — not last. 

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