Foreign Perspectives

It’s amazing how the definition of “quite early” varies between the nationalities that pass through our doors over here.

For Belgians “quite early” can mean as early as 3am yet for the French it’s normally no earlier than 7am.

Having said that, we’re getting one of our “afternoon bookings” next week which will be leaving “quite early” which means around 5pm which is pretty handy for us as we get to use the room later the same day. Now, if I could find some legal way to attract a whole lot more such bookings over the summer I’d be doing “quite well” 🙂

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.

One thing that constantly surprises me is that there are quite a large number of “professional” website designers around who produce websites that are both very amateur and almost entirely ineffective in terms of findability in the search engines. How do they do this?

First they create a lovely picture to grace the homepage. Why’s that a problem? Well, usually the picture is very large, filling the homepage and there’s, at best, a line of text saying “click to enter”. This causes problems in that it takes ages to download the picture and as far as the search engines are concerned the only searchable text is “click to enter” which is hardly a phrase one is likely to use to find a site.

Second, they produce pages filled with lovely photos, often animated. That’s not a problem if the photos are small enough but usually they put them on full size. One example I looked at this morning had so many photos that it crashed the browser which implies that nobody will be able to look at those pages. They also had only photos ie no text so the page was blank to the search engines.

Finally, they put everything in graphics. This has the effect that the page takes longer than usual to download but more importantly, it’s completely blank to the search engines: in some cases you can’t even find the page by searching for the name of the place.

These designers are professional only in the sense that they charge for their services. Don’t be taken in by them!

This used to be really easy: pick a big bank, check that they opened accounts for non-residents, then pop your application in the post.

Post 9/11 though the Patriot Act is with us and it imposes such stringent “know your customer” regulations on the banks that it’s no longer possible to open an account online with any American bank if you are a foreigner and don’t live in America. However, that doesn’t mean that you can’t open accounts with American banks, just that you can’t do it online anymore.

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.

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).

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

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.

One thing that’s slightly peculiar is that almost always when I write something about languages, I get comments on the post.

Why? Basically because there’s something of an underground support group for Esperanto.

Eh? What’s Esperanto? For those that don’t know, way back in the late 1800s there was a feeling worldwide that what was needed was a world language. One that wasn’t tied politically to any particular country (so no vested interests) and could be used around the world.

At the time, such a language didn’t exist so there arose something of a cottage industry in inventing them. Of those produced at the time, Esperanto being by far the best known these days. However, it didn’t stop then and in the early 1900s people proposed even more languages including a simplified version of English.

Although it’s quite a different world these days, the Esperanto community is still developing the language and you can even get free accommodation around the world if you can speak it (it’s reputedly a very easy language to learn). And, they’re very enthusiastic commenters on posts!