Foreign Perspectives

Archive for the ‘Business’ Category

For historic reasons, the various post offices and co-operative banking organisations in Europe maintain loose connections with their opposite numbers in other countries and it’s therefore often useful to open accounts with these organisations before you move.For instance, the co-operative bank offer a service called Tipanet which offers quite cheap international money transfers: around £8 as compared to the £25 that a normal bank would charge you. In the UK, it’s the Co-Operative Bank that does this, in France it’s Banque Populaire. The co-operative movement is quite frequently used by various unions and in France Banque Populaire offers special deals to public servants.The post office links are even more widespread and various special arrangements exist between considerable numbers of national post offices for their account holders. However, information on these isn’t widely distributed and it can take a little searching to find out about them. One advantage that almost all give you is that a post office account effectively gives you government issued proof of address once your first statement arrives.

So what are your options if you find yourself in need of an American bank account yet don’t actually want to visit America to open one?

There are three basic options that are known to work:

1. Form an American company and then open the account for it. This option is obviously a bit over the top if you’re only making $50 a month from your online empire although it’s probably the best way to go if you’re making a living online.

2. Try opening an account with a bank that operates both in America and your own country. The two most common options for this are HSBC and Citibank as they seem to operate in more countries than most.

3. Open a brokerage account with one of the brokers catering to non-residents.

In practice, the third option is by far the simplest for most people. Most American brokerage firms operating overseas cater exclusively for high net-worth clients (ie assets of $100,000 and more) but two offer accounts for the masses. Schwab has a minimum of $10,000, Etrade has a minimum of $1,000 although you can open it with zero cash upfront. How come the brokers can manage to give you a bank account when nobody else seems to be able to? Simply because the brokerage outfits operate as integrated international organisations whereas the banks don’t (eg Citibank USA isn’t the same as Citibank UK).

The etrade account is free for the first 12 months. After that, it costs $40 per quarter unless you meet their requirements which are either 1) $10,000 balance or 2) $1000 in automated credits per month or 3) one share trade during the period. If you don’t have the $10k and don’t have the $1k going in, then it is cheaper to buy or sell some shares than pay the $40. Our American bank account kit contains all the information you need to do this.

The second option isn’t quite so popular mainly because it isn’t as well known. The easiest way is if you have a premium account with either Citibank or HSBC in your own country as your relationship manager will be able to do it for you. These services are CitiGold and HSBC Premier but the downside is that the rough requirements for them is that you have $50,000 on deposit with them, or have an income of $75,000 or have a mortgage of $200,000 with them (roughly; the requirements vary depending on the country). It has recently become a good deal more difficult to persue this option.

Next easiest (and more economical) is to phone Citibank or HSBC in America and they’ll open an ordinary account for you on presentation of the appropriate ID and, sometimes, a bank reference. Citibank seems more geared up for this: call their International Personal Banking people on 001-813-604-3000. The latest information is that the banks are making this option almost impossible to use.

That’s just saved you between $5 and $250 which is about the going rate to buy the relevant information as above. Swiss bank accounts are slightly more difficult but definitely not worth paying the $1000 or more that I’ve seen quoted to provide you with the information. I’ll be covering Swiss banks in a later article, but if you can’t wait, pop a comment on this post and I’ll pass the information on to you (free!), likewise for other countries.

Don’t forget though that the first question you should ask yourself is: why do I need an American bank account? Google will only make payments into an American account if you live there and Citibank offers a US$ account in the UK (and other countries) which will let you deposit US$ cheques free of charge. It’s really only Paypal that requires such an account and even then that’s only if you live in one of the countries for which they don’t support withdrawals direct to your bank account.

This is part of our series on international banking which covers how to open and use accounts in various jurisdictions around the world including France, Switzerland and various offshore banking centers such as the Channel Islands, Isle of Mann and Bermuda.

An updated version of this article is on our expat banking site which also includes access to the detailed opening instructions that many people have asked for.

Most French banks are what would be termed building societies in the UK and consequently the banking scene is fairly different in nature in France.

There are only two proper banks, Societe Generale and BNP Paribas. These both operate nationwide networks but their branches are largely confined to the towns so they may not be entirely practical if you live in an isolated village.

As in other countries the Post Office and co-operative movement operate their own banks offering some advantageous accounts which we’ll be covering separately.

The majority of banks are effectively small regional building societies. For example, the Credit Agricole you see in Normandy is a totally different outfit to that which you’ll see in Paris. Although it is possible to open an account in one region and operate it via the branches in another region, this will entail delays in having your deposits credited and limits the facilities you have access to. So, I can’t use the deposit machines in Perpignan with the card from my account in Normandy.

The other banks worth looking into are those of the various supermarkets. By and large these are re-branded versions of some of the banks covered above but not always, for example Auchan operates its own bank. Generally speaking, the charges for these accounts are lower.

The main postal banks are those operated by Axa (a full-service bank) and Ing (savings accounts only).

One difficulty that you will have in opening any of the accounts is that you are usually required to provide proof of income. If you are living in France, they will ask for proof of a French income and this can take several years to acquire so it’s generally better to open an account with one of the banks before you move here or very shortly after you get here.

Just when you were thinking that the work is all over, here comes another variant of the favourites scheme.

This one seems a little simpler at first sight, if that’s any relief!

OK, the steps:

1. Signup at MyBlogLog, if you haven’t done so already. Recommended anyway as that lets you add things like the “recent readers” widget that you see on this site.
2. Join my community by clicking here, then “join community”.
3. Write a comment here to let me know you’ve done it.

I will in turn join your community ASAP. If I’ve not done that within two days, post a reminder as a comment to this post.

New entrants:

1. AnitokidJoin the Community
2. Tech Lock-RahulJoin the Community
3. Technix UpdateJoin the Community
4. Techno Diary

The originals:

5. Foreign PerspectivesJoin the Community
6. Julies Journal – Join the Community
7. Nathan Drach – Join the Community
8. the.[ED]ition – Join the Community
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10. Make Money with a 13 year old – Join the Community
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13. Jon Lee – Join the Community
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As you may know, I am a participant in the Technorati favourites exchange which was thought up by DoshDosh as a means of getting loads of into the front rank of Technorati and indeed a growing number of the participants are turning up in the top 100 favourites list on Technorati.

However, what I found most instructive was the number of ideas exchanged across the last 10 days amongst the various participants in this programme. For one thing, a considerable number of those participating fall into the “techie” or “make money online” groups of blogs worldwide and the number of lessons I’ve picked up in that time has been enormous.

Some of the first fruits of those lessons has been in the new ad format that you can see throughout the blog. I figured that if the square adsense format was used by almost all the “making money” blogs, it was bound to be a “good thing” so I’ve adopted that. Also, you’ve seen from a few days ago the little underlined popup adverts which is also used by them.

Funnily enough, although I was adding all the blogs to my favourites just to get into that top 100, I’ve found a number of the articles on the favourited blogs quite interesting. I’ve even picked up several relevant backlinks from blogs which I’d not otherwise have seen.

Now, if only I could up the traffic on Foreign Perspectives and/or get ‘yall to click on the adverts for me, I’d be able to give up the day job… Funnily enough, I’d not really have thought that possible a few weeks ago but there does seem to be a whole lot of people out there living off their blog income so apparently it is possible.