International Banking

International banking is a specialized sector of banking which provides the essential commercial, retail, corporate, trade and finance and merchant services to international (foreign) clients round the globe, primarily through banks, branches, agencies and representative offices. These clients can be either individuals or companies. International banks are synonymous with financial supermarkets.

International banks, although regulated by international bodies to maintain international banking standards, do maintain individual polices which determines what services they provide and to whom.

International banking can be used as a tax planning tool and asset protection vehicle, especially when assets are invested and held in offshore financial centers or a tax havens.
The benefits of international banking.

As the international banks lend and borrow in a global rather than a domestic marketplace they are less likely to be affected by fluctuating interest rates, and as a result there is less risk on such investments. In addition, international banks may offer more competitive interest rates than domestic banks, resulting in money saving opportunities.

The beautiful island of St. Kitts and Nevis is known for one of the longest standing economic citizenship programs in the world, the Citizenship – by – Investment Program. This program which enables foreign nationals to have a St. Kitts second nationality was established in 1984. Under the Dominica citizenship by investment Program, through which a second passport can be acquired after citizenship applications are successful, provides a means of attracting foreign investment in real estate or a contribution toward the economy of Dominica. Dominica passports enable visa free travel to more countries as well as personal safety. Every offshore company is required to have a memorandum and articles of association upon company formation. Details such as company name, particulars of the subscribers, company liability and name and address of the first registered agent are on the M&A of the offshore corporation. International business companies are offshore companies with limited liability. The LLC does not have shareholders and are owned by members who manage the affairs of this offshore corporation.

International banks adopt the practice of having established banks in one market and the set up branches in offshore financial centers or tax havens to offer international offshore banking services which allows the client base to exploit the tax benefits and other benefits offered in the tax havens. International banking benefits companies by providing opportunity to expand business market, by acting as the financial link between a traders, who can be located anywhere in the world.

Exporting and importing business requires proficient international banking products and services in order to be successful. International banking services and trade financing products that are essential to businesses include:

  • Letters of credit ( import, export and stand by)
  • Collections services
  • Trade related loans, money lending by overdraft, or otherwise
  • Global trade management- facilitates out-sourcing of the trade documentation prep process to more experiences bodies.
  • Foreign currency and exchange services
  • Import financing
  • Clearing house services (foreign and domestic check clearing)
  • International wire transfers, foreign drafts, travelers checks
  • Online commercial banking services
  • Correspondent bank services

A good international banking provider should have a comprehensive suite of product that will help businesses and enhance their business efficiency and while simplifying the complexities of global business activity.

More recently online banking services offered by international banks have improved to meet with global demands for faster business transactions. The online letter of credit is one of the bank services of online international banking, as it facilitates the immediate security of terms for sales to the exporters. Without a letter of credit most businesses will have to operate on cash upfront basis which is not very lucrative for businesses today. For example: A clients makes and order for a manufacturing company to produce goods, without a letter of credit the client would have to pay to the manufacturer the cost of goods, ( not yet manufactured or delivered) upfront. So the letter of credit (backed by the issuing bank) acts as a payment guarantee.