What is KYC (Know Your Customer)? Definition & Guide
Regulatory procedures that require financial institutions and migration agents to verify a client's identity and assess risk before providing services.
Know Your Customer (KYC) refers to the regulatory procedures that financial institutions, law firms and licensed migration agents must follow to verify a client's identity, assess the risk of illegal activity, and ensure compliance with anti-money laundering (AML) regulations.
In investment migration, KYC procedures apply at multiple stages. The immigration law firm must verify the applicant's identity before accepting the engagement. The bank receiving the investment funds must conduct KYC before processing the transfer. The government agency processing the application conducts its own verification.
KYC documentation typically includes: a certified copy of the passport, proof of address (utility bill or bank statement dated within three months), source of funds documentation (tax returns, employment contracts, business ownership records, inheritance documentation), and a completed declaration of the origin of wealth.
For applicants with complex financial profiles, such as those with income from multiple jurisdictions or wealth derived from business sales, the KYC process can take several weeks and may require additional documentation. Tax returns, audited financial statements and company registration documents are commonly requested.
Failure to satisfy KYC requirements can delay or block an application. Incomplete source of funds documentation is one of the most common reasons for processing delays in Golden Visa applications.
Why It Matters for Golden Visa Applicants
KYC requirements affect how quickly a Golden Visa application can be processed and whether it is approved at all. Applicants with straightforward employment income and a single bank account will pass KYC quickly. Applicants with income from multiple businesses, trusts, offshore holdings or cryptocurrency will face extended KYC timelines and more document requests. Preparing KYC documentation before engaging with a law firm or submitting an application can save weeks. Common delays result from missing tax returns for prior years, unexplained large deposits, and insufficient documentation of business ownership or sale proceeds.
Example
"The bank required three months of additional KYC documentation to verify the source of funds from his technology company sale before releasing the investment transfer to Portugal."