Frequently Asked Questions –
International Settlement Bank Accounts

What is an International Bank Account?
An overseas bank account, located in another country, which can be used to simply house funds or to be linked with a company’s International Merchant Account in order to receive business revenue.

What is an International Settlement Bank Account?
An International Bank Account specifically setup to receive Funds Settlements from a Merchant Account.

What Bank Account should a Merchant use with their International Merchant Account?
An already existing US Bank Account can be used to accept the funds resulting from the online credit card transactions of an international merchant account.  However, in many cases, International Bank Accounts make more sense for settlements simply for logistical purposes, especially if much of the business is taking place outside the US wherein suppliers are being paid for services and other overhead expenses that take place internationally.  We provide International Bank Accounts to which a merchant can have funds from their online credit card transactions sent.  These corporate settlement accounts securely hold funds while offering many of the benefits US bank accounts offer, including online banking & international debit cards for easy access to funds.

Can IBC Merchant Accounts help me setup an International Settlement Bank Account?
Yes.  We assist our merchants with setting up settlement accounts when necessary.

How do Merchants know the Banks IBC Merchant Accounts use are strong Banks?
All the banks we assist our merchants to setup settlement accounts at have been in operation for over 10 years.  They are the largest International Banks in their areas and have long track records of success taking care of IBC Merchant Account’s merchants.

Is it Legal to have an International Corporate Bank Account and/or Brokerage Account?
This depends on the jurisdiction.  It has never been illegal for Americans or Canadians to maintain bank accounts or investment banking accounts internationally.  Similarly, most countries allow their citizens to own international corporate banking accounts.  Merchants should consult a legal expert in their own jurisdiction to find out whether their resident country allows this, and if so, how they should report it.

Earnings in an international corporate bank account are generally considered tax-free in the country where the bank or brokerage account is located.  International investors, including US and Canadian residents, are expected to voluntarily report any income earned outside their country (offshore).  International settlement banks do not cooperate with, or provide reports to, the IRS or Revenue Canada on income earned from any form of investment, so it is entirely up to you to comply with the reporting requirements of your jurisdiction.  Questions surrounding international corporate banking legalities usually arise when a US or Canadian citizen fails to report offshore income to the IRS or Revenue Canada at tax time.  Of course, we recommend you follow all tax laws and consult an accountant and/or tax attorney on these matters.

In some cases, there are ways of structuring your affairs using international business companies or trusts that can be used for legal tax reduction or deferral.  The laws in each jurisdiction differ, so you should consult a local tax advisor to find out how.

How do Merchants utilize International Settlement Bank Account funds in their country?
Merchant can wire money directly from their international corporate banking account or brokerage account into their domestic account.  The international settlement banks will allow them to wire transfer through an online international corporate banking system much like the ones they use with their local banks.

International settlement banks and brokerages issue Visa/MasterCard debit cards and secured credit cards to international corporate bank account holders.  These cards may be used to make purchases from merchants or to withdraw cash from ATM’s.

The International Business Company (IBC) or Trust may purchase real estate, cars, businesses, etc.  Typically, the founder/client acts as an agent of the IBC or Trust to purchase assets on its behalf.  By this, assets are held under a corporate or trust name, thus helping to protect the client’s privacy.

The client may borrow funds from the International Corporation or Trust.  The IBC or Trust is a separate legal entity from an individual and may make loans to individuals or other entities.

Are Deposits Insured?
International Settlement Banks do not carry insurance on non-resident accounts.  However, most of the International Settlement Banks are regulated by a central bank of the country they are in, which sets capital ratios and liquidity requirements in line with International Corporate Banking Standards.  
For instance, the capital ratios and liquidity requirements of the bank we use for our clients in Belize are set by the Central Bank of Belize.

Are there any International Treaties Regulating Depositors from the US signed with countries used for your Merchants’ International Corporate Bank Accounts?
Not that we know at the time we have written this.  However, you should consult an attorney to know for sure.  Either way, it is generally the case that, if the Court of any particular country decide that any depositors funds are the proceeds of crime, they are still bound by the laws of their country to release the source of funds.  That said, the Privacy & Security in countries like Belize remains strong for law-abiding clients.

How long does it take to get an International Corporate Bank or Settlement Account opened?
Once a Merchant’s International Corporation is setup, IBC Merchant Accounts will send them the International Settlement Bank application along with detailed instructions on completing the application process.  The merchant will then email the complete package of documents so they can be reviewed for any errors or missing information.  After the merchant makes the necessary changes/additions and sends the original documents to the bank, the account can be opened the same day they receive the documents as long as all of the International Settlement Bank’s requirements are fulfilled.

Can IBC Merchant Accounts help the average client or merchant minimize or legally reduce their taxes?
No.  We provide Corporate Structures for Merchant Processing that maximize access to international investments and expand the scope of a foreign company’s Credit Card Processing abilities.  We believe taxes are the legitimate way for any community to provide for its basic social services.  Some countries like the US and Canada have adopted a tax exploitation policy towards their citizens.  For citizens of these jurisdictions, there are minimal opportunities for legal tax reduction by use of international structures.  All merchants should consult tax experts in their country of residence for advise on these matters.  Our clients’ compliance with the tax laws in their respective countries is entirely their responsibility.