What is a Foreign Bank?
Generally, the term “foreign bank” refers to any operation of a banking organization headquartered outside of where its head office is located. Foreign banks offer an extensive array of banking services and products to its customers, who may be individuals or companies.
How the foreign Bank came about?
The economic bang of the 1960’s and 1970’s was followed by an extensive international increase in the establishment and operations of foreign commercial and industrial companies. This global expansion augmented international banking activity, partly as a result of banks following their customers and banks needing to facilitate the international banking demands. And so, the foreign bank was conceived. Major financial institutions found themselves setting up branches and subsidiaries in markets all over the world in order to facilitate the international banking needs of customers: new and old. The rapid expansion of foreign or overseas offices was evident in many countries especially: Japan, Germany, Canada and the USA.
To learn about acquiring a second citizenship please go to the contact us page to submit questions. There are reputable economic citizenship and citizenship by investment programs which make it possible for foreign citizens to invest and apply for citizenship. Dominica citizenship program comes with two options, one for single applicants and another option for families. The donation or investment amount required under each option for Dominica citizenship program differs, with single individuals required to make a smaller financial contribution. Financial contributions accumulated under the Dominica second passport program go towards economic development in the country. The citizenship program which offers second citizenship in Saint Kitts and Nevis also has two main options to persons seeking to have dual citizenship and a second passport from the Federation of St. Kitts and Nevis. Offshore companies and bank accounts go hand in hand. Offshore corporations are registered to be used as trading companies for use around the world. Offshore companies make excellent holding companies. The offshore company must follow regulations in countries where trading takes places to avoid any legal problems. Offshore company formation is fast and done fully online through registered agents for company incorporation services.
Foreign banks are operated, regulated and supervised as any domestic establishments would be. Parent companies owning foreign banks can choose from establish a freestanding banks or a new holding company, or alternatively operate as a branch, agencies, representative office, and subsidiary. Branches are the most common form and structure undertaken by foreign banks. Branches can carry out all basic activities and function of banks, such as deposits and withdrawals, loan foreign exchange. Representative offices are sometime found but are limited in capacities and powers as compared to a branch, representative office are normally the first steps in establishing a foreign bank presence, developing relationships on local level, while not engaging in any banks activity. Domestic bank performs.
What is the function and use of a foreign bank?
Today, foreign banks represent a significant financial presence in the global market and provide various important benefits to businesses, individuals, and the general economy. In fact, foreign banks make up the majority of all loans issued. Foreign banks are indeed important corporate citizens and an essential part of the global financial system.
Most foreign banks are set up to provide services to international subsidiaries of clients in their home countries or to a specific group of interest. Foreign banks may offer several types of specialized banking products that include: retail; business; corporate; private; and investment banking. Foreign banks may also be offshore banks located on tax havens or offshore financial centers all over the world.
Foreign banks establish branches in non-resident countries for various reasons: to carry out trade investment activities, to service the domestic activities of home-country operations, to partake in the interbank market, to engage in foreign exchange trade, and in some cases to develop a retail banking business, engage in offshore banking activities.
Who is the foreign bank account for?
Foreign bank accounts would appeal to anyone who dwells out native domicile and need access to their accounts, or needs to have money transferred back or forth form one account to another, or needs to operate a bank account with a bank with whom they are familiar and trust. Many individuals who fit this category are international investment companies, foreign students, expats, people who live temporarily and work in foreign countries, but maintain accounts at home; and the like. Foreign banks appeal to those who want to continue using their original bank. A foreign bank account facilitates convenient and faster money transfers and money management. Investors (individuals and companies alike) seek confidence and security in banking. One way to fulfill this need is to bank with a bank from their own country, bank in their own language while they are confident their assets are secure and accessible.
What to look for in a good foreign bank?
There are several elements to factor in when looking for a foreign bank overseas. A foreign bank should be able to facilitate and expedite efficient money transfers, provide the required access to accounts, and most important- should provide the security and assurance.
Foreign banks and a foreign bank account will facilitate and expedite transfers and movement of money if you deal with the same bank as you do in your country of origin. This does safe on time and cost of movement of money, but may not be such a benefit if the currencies used are different.
Consider choosing a foreign bank that is capable of dealing with international clients. Most major banks abroad have the ability to operate multi-currency accounts offering a host of flexible features allowing customers the ability to conveniently manage their money wherever they are in the world.
When moving money you will need to open a foreign bank account to receive your funds. As a non-resident it is crucial to consider a banking facility or banking provider that will allow you easy access to your savings and investments
Internet banking is a must!!!!!It is essential to have internet or online banking, and or telephone banking to have 24 hour access to accounts and account management. This feature is even more beneficial for a client with other accounts with the same bank. By using a branch of your home banks, you will be able to manipulate transfers and other activity privately and securely as well as needed.
Advantages and disadvantages of a foreign bank.
Once a foreign bank account is established, assets held in the foreign bank are not subject to US law, and therefore cannot be accessed through litigation, seizure, court ruling or otherwise,.
The down side to foreign banking is the complex rules governing who is entitled to open and operate a bank account. That it is not accessible by non-residents companies or individuals in most countries.
In order to open a bank account in a foreign bank, you will need documentation proving that you are a resident, or have a valid reason for residing in the country, part time or student or employed in that country, along with other normal identification and proof of address. Further, in order to open an account in a foreign bank, the applicant must visit in person and may be subject to an interview. It is impossible to pick up the phone or go online and open an account with a foreign bank in just any country you wish.
Of late the procedures in place to detect and squelch money laundering may mean that setting up such an account is a long-drawn-out process requiring many stages of legal and administrative clearance.
Citizens or residents of the United States must tell the Internal Revenue Service each year if they have any foreign bank or financial accounts holding a total of $10,000 or more. Income from the assets is taxed at ordinary rates of up 35 percent. Money transfers into and out of accounts is monitored and there are certain requirement to transfer money over specific vales which are required for auditing purposes.
Interest rate with a foreign bank may be better, worse or dissimilar to that of local banks. If you are residing in a country for more than 6 month and are renting, paying for utilities, you will find that in many countries especially Europe, landlords prefer to be paid through standing orders ( directly from banks) and a foreign bank account will facilitate this.
If you are working with different currency than home country there will be fees attached to debit card so best if an account is established in country of tem residence.
If you are employed, some employees require you have a bank account where salaries would be paid into.