Transferring Funds Across International Borders

Moving money around the world should be easy in this electronic age, but, with all the banking and government rules, requirements, restrictions, and peculiarities, sometimes it isn’t.

This week a wire to a business I work with was rejected because the receiving bank didn’t like how the sending bank had input the beneficiary’s name. The sending bank left off the “Inc.” from the beneficiary company name. The name was correct otherwise, and the bank account number was also indicated and also correct. Yet the receiving bank rejected the wire.

Seems ludicrous, and it is.

A friend recently had trouble sending a wire because the sending bank didn’t like the recipient’s account number. In this case, the sending bank simply refused, again and again, even to attempt the wire. They insisted the account number contained too few digits and couldn’t be correct, so they weren’t even going to try to make the transfer.

The account number was correct. The recipient’s bank was small, with not many account holders, so account numbers were short. They didn’t need 16-digit account numbers. But the sending bank wouldn’t listen, didn’t care. Finally, my friend had to ask the recipient if he had another account at another bank for which the account number had enough digits to satisfy his sending bank. Crazy.

I tout diversification constantly, and these examples are another reason why. You never know when some part of your personal international infrastructure will break down. You need back-up options, whether it’s a place to sleep safely at night, another bank account where you can receive an incoming payment, or a couple of extra credit or debit cards for use when access to certain cards is cut off, as I guarantee you it will be from time to time.

For banking, one offshore account is a good start (and if you don’t have at least one offshore bank account, I recommend you address that agenda immediately), but, long-term, your plan should include at least two. The examples above help show you why. You need options…especially if time is of the essence. When you’re in a situation where you need funds in a particular location within a particular time frame, you can’t spend weeks trying to figure out why a transfer isn’t working.

Meantime, opening a bank account in many countries continues to grow more difficult for Americans. Nevertheless, even we Americans can find banks in different jurisdictions that will do business with us. Once you have an account open, keep it, even if you don’t think you need it any longer. Given the expanding restrictions worldwide, it’s better to keep a few hundred dollars in an account to maintain it than to close it only to find some new need for it down the road…when reopening it could be more difficult or impossible.

I also recommend that you have at least two bank accounts back home. This concept is new to many Americans. Most people I know in the States have one account…or, if they have more than one, the second account is with the same bank.

Connect your banks back home so you can easily transfer money among them. That way you’ll be in a position to switch gears if you run into a problem trying to make that down payment on a piece of property in Thailand or sending money to your account in Nicaragua to pay your local electric bill.

Having multiple accounts offshore makes meeting filing requirements more complicated if you’re an American, but you can’t let that distract you from the bigger-picture objective. Diversification and options above all else.

Lief Simon