There are many important reasons to open a business bank account in the country you do business in. From professionalism to bookkeeping, maintaining an active account will help you keep track of your finances and business transactions wherever you are in the world. Here are some practical reasons to consider opening up a bank account in the countries where your business takes place.
To Manage Basic Banking Needs
A business account is, on its own, a necessary part of organizing your business finances. It can be easy to mix up your personal checking account with your business banking if your accounts aren’t separate. The need for this kind of organizing is so essential that many banks offer accounts for both types of banking at competitive rates.
To Show Proof of Income
You also need to consider the benefits of maintaining accurate bookkeeping. As your business grows, the volume of your transactions and the details they include will grow as well. You must document all of these transactions if you plan to keep accurate records of both your financial records and the records of your business transactions. You will need this paper trail for tax season and to provide results to your company as required for security purposes.
To Prove Legitimacy of Business
It is essential to open up a business account wherever you do business simply because it proves how serious you are about your business. Proving that your business is a real business and not just a side gig is pleasing to the Internal Revenue Service (IRS) and will give you the ability to show a profit on official tax forms.
Being able to see, on paper, your account separation and all of the transactions that have transpired over the year prevents you from being at risk for an IRS audit. International businesses need to have U.S. bank accounts to conduct business at all. Business entities should keep their bank accounts separate to comply with proper IRS record-keeping expectations and to keep a better track of business cash-flow.
To Preserve Business
It’s also essential to open an account in the areas where your business operates in order to ensure the survival of your business. For example, if you are not an American citizen, having an American business bank account is still essential if you want to make money as a non-resident.
You can easily find a non-resident director who can help you get in touch with business organizations and banks familiar with these kinds of corporate bank accounts. In the U.S., it is impossible to open a bank account with a foreign entity, so you have to register in the USA to have a business bank account as a non-resident.
To Make Banking Easier
With an international business bank account, your home bank will have a greater understanding of your work areas’ regulations. The bank will learn how to better manage assets and issue recommendations regarding money management strategies as a result. Having closer relationships with the people you bank with will provide you with a sense of trust that will make banking feel safer and more reliable across the board.
To Avoid Financial Hurdles
Having a higher level of liquidity and access to finances without having to transfer money internationally and deal with exchange rate issues and international regulatory issues makes conducting business in other countries a breeze. You’ll likely avoid all of these financial hurdles by opening up a business banking account in the countries where you work.
To Make Traveling Easier
Another critical reason to have a bank account in the countries you do business with is travel purposes. If you know you will be away on business, it will be much more convenient for you to access the money set aside in the banks of those areas where you’re traveling.
Transferring money across international borders can be a long and tedious process that would not be an effective way to get the cash you might need in an emergency. Having money nearby is an integral part of managing money and will help you navigate less familiar territories while conducting business.
To Conduct Modern Business
The need for business banking accounts has grown so significantly that banks and banking services have been opening up internationally. With the help of these corporations, you’ll be able to receive payments from your customers, no matter where they live, almost as if you had a real account in their country.
New banking options are great for those who are hesitant to open up accounts outside of their home countries. Digital nomads and those who travel for a living will be particularly interested in these banking services. They may have many different countries that they need to maintain finances in at one time.
If you spent a great deal of time in another country, you would likely rent an apartment or buy some property to make living more practical. The same concept applies to business banking. When you’re doing business in another country, you want to be sure that you’re making the transaction process as convenient as possible both for yourself and the company you are representing on travel. There are many new banking options for those on the move, making it easier to communicate and conduct business with more people.
To Feel Like Home
Opening up a bank in the countries you do business with gives you access to clients in different areas of the world. Without the stress of transferring money or calculating confusing exchange rates, your account will allow you to conduct business as usual, as if you were doing business with residents of your home country.
The Bottom Line
Essentially, having a business banking account allows you to navigate more effectively when you are traveling for work. By bringing your banking with you in a sense, you are making it more convenient for yourself and those you work with to carry out business as smoothly as possible. It sounds like a smart move to me!
About the Author
Matt Casadona has a Bachelor of Science in Business Administration, with a concentration in Marketing and a minor in Psychology. He is currently a contributing editor for 365 Business Tips. Matt is passionate about marketing and business strategy and enjoys the San Diego life, traveling and music.