Three international banking services you need

hehehee....International banking is a type of banking that takes place across the borders. Individuals and companies use it to get favourable banking conditions in a global marketplace.

For some banks, international banking is more or less a function within a department. But for many large banks with a global footprint, it is a department in itself.

Financial Web notes that international banking services are available to individuals and corporations that do business internationally.

It is a requirement for anyone with extensive business relationships in foreign countries or is looking to expand into the foreign marketplace.

An international bank can help you meet your banking needs when playing on the world stage by providing you with essential services and assistance.

The essential services needed when choosing to establish an international banking relationship are private banking services; the ability to convert or exchange your currency and paying as well as receiving payment for your goods and services. Indeed, they are the basic services you require to be successful in the venture.

Private banking

Private banking involves the offer of loan rates and other products and services not generally available to retail customers.

A private banking relationship with your international bank gives you access to special offerings and greater discretion in the way your account transactions are handled or the priority your account is given.

 Advantages

• Private banking gives you exclusive action to special deals and rates.
• You become a prime banking customer with the bank.

Disadvantages

• You may be subject to some additional scrutiny, depending on the country in which you are doing business.
• Your account may be subject to special taxation or assessment, depending on the foreign country.

Foreign currency exchange

You should have a currency exchange service set up in order to take advantage of changes in currency rates between countries when travelling. The foreign currency exchange department for an international bank can help determine the best time to exchange your country’s currency for the local currency as well as trade currency contracts for you to increase your account’s income.

Advantages

• It helps you take advantage of differences in exchange rates.
• It gives you an opportunity to profit from foreign currency trading.

Disadvantages

• You may have to pay higher service fees on certain currency transactions.
• It is difficult to predict changes in currency rates, which may result in some losses for you.

Money transfer and collection

As you operate your business with foreign companies, the ability to collect receivables and pay bills is important.  A money transfer and the collection facility within an international bank allow you to transfer and receive payments in an efficient and timely manner.

 Advantage

• You can pay bills and complete payments without the need to be present.

Disadvantages

• You are relying heavily on the abilities of the bank to complete transactions in a timely manner.

According to howstuffworks.com, the process of establishing an account at a reputable international bank will probably include the following:

The bank will confirm your identity and those who have any ownership interest in your money.

Like a good father, the bank will ask you about your intentions. Why you need an international bank account and what your business does?

The bank will inquire about the origin of your deposits, especially very large ones.

The bank will ask for references, whether you are a reputable individual or company.

The bank will analyse how risky a customer you would be. Can you or your company pay back loans?

Reasons to bank internationally

Many people around the world use international banks to shelter their money from their home country’s income and estate taxes, according to howstuffworks.com. Hosts of banks are based in countries with low or no income and estate taxes, such as the Cayman Islands, Belize, Panama and the Isle of Man. But you can’t just put your income in Belize and not pay taxes. Customers must report their income and work with their banks to make sure tax avoidance doesn’t turn into tax evasion.

Some individuals use international banks to invest in the economies of booming countries and in developing countries, the same way they might invest in a domestic corporation or real estate venture.

A number of wealthy individuals keep their wealth in offshore banks and other entities to keep it safe from lawsuits. That doesn’t mean these people are criminals; they simply want to avoid losing any money to a sudden, unexpected or predatory lawsuit.

Since international banks lend and borrow on international markets, they’re less affected by domestic interest rate fluctuations. For example, when Mr. and Mrs. Platinum want to avoid sinking interest rates in their own country, one thing they might do is move their money into an international bank.

Also, some foreign banks might offer better interest rates than domestic banks, providing a money-making opportunity for customers.

International banks also make it easier for a company with an international presence to do business around the world.

For one, the company doesn’t have to set up a million different bank accounts around the world, then wait to receive money while the banks deal with one another.