International Banking

Organising your freelancer finances, both business and personal when you are outside your normal country of domicile/residency can be both daunting and frustrating. Delays in your ability to receive and make payments can result in cash flow issues, late/failed payments and the resultant fines/penalties. Equally important is your ability to access your cash whatever country you are in and in whatever currency you want.

Tax Optimisation is the main reason why freelancers open offshore accounts but if you are non-resident (see Fact Sheet on Tax Status), you can receive interest without deduction of tax at source by completion of HMRC form thus allowing you to maintain your UK banking arrangements. Your non-residency status and the management of all conditions associated with this should ensure that you are not taxed on income whilst contracting abroad (see a recommended IFA Tax Advisor).

If you are not non-resident then you must be aware that banking offshore requires to be declared to HMRC regarding income generated and associated interest and that the HMRC has legal powers (Council Directive 20003/48/EC) to request from European banks disclosure of your banking records (see HMRC notice; Offshore Bank Accounts).

Another reason for banking offshore is one of privacy which, as a result of the European Saving Directive, can only be secured by banking outwith the European Union. This should only be considered if you have non-residency status.

As an international freelancer, there are essential key questions that you need to answer about your own circumstances prior to setting up your offshore banking arrangements:-

Personal Questions

  • Do I qualify as a freelance business for non-residency status (may not be appropriate to certain nationalities)? What banking service do I require?
  • Do I need to build up credit rating?
  • Do I need financing for the contracts I undertake?

Banking Questions

  • Do you provide a Personal Banking Relationship Manager?
  • Do you provide multi currency current accounts for receiving funds (i.e. $, £, Euro etc)?
  • Do these funds stay in their respective currencies until I decide to exchange?
  • Do you provide FOREX hedging facilities?
  • Do you provide debit cards and are they single or multi currency?
  • Do your debit cards have world wide ATM access in local currency (i.e. Maestro and Cirrus)?
  • Do I receive free ATM transactions if I withdraw from your bank world-wide and what is the daily limit?
  • Do you provide credit cards (i.e. VISA)?
  • Do you provide 24/7 online/telephone access to banking facilities?
  • Do you provide identity theft and fraud protection as a matter of course?
  • What are your banking tariffs and what are my expected costs for a set number of transaction?
  • What countries do you have a physical presence in?

IFA recommended international banks have long established services for expatriate freelancers and by meeting certain criteria (i.e. income of say £75K annually or deposit of £25K) they will provide you with all the above and more within a standard expatriate Freelancer Banking Offering.

IFA Recommends Recommended IFA Freelancer Business Banking Providers

As an international freelancer you must as a matter of course consider the following issues which are more fully addressed in our wealth management section.

Operating Risk Management Issues

Your commitments will be defined within the terms and conditions, this is what you need to provide to deliver your contractual obligations but you need to ensure that all of the following potential issues have been covered either by your end-user client or by yourself.

  • Do you need Offshore Working Insurance?
  • Do you need Employers, Public Liability or Professional Indemnity Insurance as part of you contract ?
  • Do you have the necessary Travel, Medical, Repatriation and Evacuation Insurances (if taking family they need cover also)?
  • Do you have mandatory visas and work permits?
  • Have you had the necessary vaccinations prior to travel and do you understand the top-up requirements?
  • Do you have a fact sheet for the country you are going to work in and are there any security issues that require special attention?
  • Do you have driving insurance and should you in fact drive in that country?
  • Do you have appropriate life cover?
  • Do you need loss of earnings cover?
  • Do you need an international mortgage?

IFA recommended International Business Support providers have long established services for expatriate freelancers. By you meeting certain criteria on tax status and residency, they will provide you with all of the above (and more) within a standard expatriate Freelancer Offering.

IFA Recommends Recommended IFA Business Support Advisors

Value Enhancing Issues

One of the primary reasons for contracting internationally is to increase your financial wealth, to maximise profit and to optimise taxation opportunities and ultimately provide for your retirement and assets transfer to your family. You should be discussing protection and provision opportunities with a qualified financial planner who has International Freelancer experience.

  • Tax Optimisation Planning and Compliance Pension Provision
  • Inheritance Tax Planning
  • Offshore Trust Benefits and Applicability
  • Capital Sum Investment Portfolio Management

IFA Recommends Recommended IFA Wealth Management Advisors