Overseas / International Bank Accounts
"As our future appears to be with foreign clients should we consider opening
overseas bank accounts? If so how should we go about it?"
Is the opening of an overseas / international bank account what is really needed? Such a move would simply
enable your company to deal with payments/receipts in local currency a little more
easily. However, there may be difficulties opening a bank account in a foreign
country without a business or other local presence because of money laundering
rules. While the idea sounds simple, the creation may not be so.
The best place to start could be a discussion with your UK bankers. They should
be able to create foreign currency bank accounts in the UK if it is simply a need
to deal with foreign currency, or introduce you to their overseas affiliate.
However, if the real question is "What do we need to do to secure and retain
overseas business?", the position is a little more complex.
Often the most useful way is to have some form of business presence in the
territory concerned. This could simply be an agent, a branch, or even a full blown
subsidiary, the merits of each depend upon the level of trade forecast, and the
presence required in a local territory to be taken seriously. In many territories
local businesses prefer, and are encouraged, to deal with local businesses and local
people. No local presence can seriously hinder local trade, certainly in the case
of people based businesses.
Operating through a business presence in another country can give rise to many
commercial practical and tax issues. And understanding local business custom is
paramount. You will need to understand the local taxation regime and what relief is
available in the UK for any tax suffered abroad. There should be no double taxation
but care will be needed. There may be local taxes, and other levies, including local
payroll taxes, the incidence of which would need to be researched. Local advice, in
addition to UK advice, is paramount.
All advice offered here is of a general nature and is intended for guidance
only. It is offered without any legal responsibility. You should always consult
your own professional advisers.
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