How to transfer large sums of money for business internationally
In today's interconnected world, the need to transfer large sums of money internationally has become increasingly common. Whether it's for business transactions, overseas investments, or supporting loved ones abroad, finding the most efficient and secure methods is crucial. In this article, we will explore the best ways to transfer substantial amounts of money across borders in 2023. From traditional wire transfers to digital platforms and emerging technologies, we'll uncover the most reliable options for hassle-free international transfers.
Best ways to transfer large amounts of money abroad
When it comes to transferring large amounts of money abroad, selecting the right method is crucial. Discover the most effective ways to securely and efficiently transfer substantial sums internationally.
Bank-to-bank transfers
Bank-to-bank transfers are a common method for businesses to transfer large sums of money internationally. This approach involves instructing your bank to send funds via electronic transfer directly to the recipient's bank account. Bank-to-bank transfers offer greater reliability, ensuring that funds reach their destination securely. While they may involve higher fees and longer processing times compared to other options, they are often preferred for their established infrastructure and familiarity within the business community.
Wire transfers
Wire transfers are a traditional yet widely used method for business transactions between banks, EMIs and other payment institutions that enable swift and direct money transfers. Businesses opt for wire transfers when transferring substantial sums across borders due to their reliability and global acceptance. For time-sensitive payments requiring a trusted and established channel, wire transfers remain a steadfast choice for international businesses.
Automated Clearing House transactions and local networks
Automated Clearing House (ACH) transactions are primarily designed for domestic transfers within the US. They have limited application for international business transactions since the ACH network and its equivalent systems typically operate only within national borders. Nevertheless, these national networks are some of the most trusted, quick, and low-cost methods of transferring money. This is why some banks and quite a few FinTech companies, including MultiPass, offer multicurrency or separate foreign currency accounts that allow access to these networks without the need to open a bank account overseas.
Cash-to-cash transfers
Cash-to-cash transfers, though less common for international business transactions, can still be utilised in certain situations. This method involves physically moving cash from one location to another, often through trusted international money transfer agencies or currency exchange services. Cash-to-cash transfers may be preferred when dealing with countries or regions with limited banking infrastructure or in cases where immediate access to physical currency is necessary. However, it's important to consider the risks associated with transporting cash, including theft, loss, and potential legal and regulatory restrictions in different jurisdictions.
Prepaid сards
Prepaid cards can be a convenient and efficient option for international business transactions. These cards, typically offered by financial institutions or payment providers, allow you to load funds onto the card in advance. They can be used for purchases, ATM withdrawals, and online payments globally. Prepaid cards offer advantages like ease of use, flexibility, and the ability to track expenses. However, it's essential to consider factors such as card acceptance, foreign transaction fees, and foreign currency exchange rates. Additionally, ensure the card provider offers robust security measures and reliable customer support for a smooth international business experience.
How to transfer large sums of money if you have international business?
Transferring large sums of money for international business transactions requires careful consideration to ensure efficiency, security, and cost-effectiveness. Here are some recommended steps to follow:
- Research Payment Providers: Explore reputable payment providers specialised in international transactions, such as banks, electronic money institutions, online platforms, and remittance services. Compare their fees, exchange rates, transfer limits, and customer reviews.
- Consider Wire Transfers: Traditional wire transfers through banks are suitable for large amounts. However, they can be costly due to high fees and unfavourable conversion rates. Verify the fees and turnaround time for each transaction.
- Explore Non-Bank Payment Platforms: Digital payment providers like PayPal, Payoneer, MultiPass or others offer competitive rates and quick transfers. They often have lower fees and user-friendly interfaces, making them popular choices for international business transactions.
- Utilise Foreign Exchange (FX) Brokers: FX brokers specialise in currency exchange and offer competitive rates. They can help mitigate currency risks and provide personalised assistance for larger transactions. Ensure the broker is regulated and reputable.
- Consider Cryptocurrencies: Cryptocurrencies like Bitcoin or Ethereum offer decentralised and secure transfers. However, they can be volatile and require both parties to have crypto wallets. Consult with experts to understand the associated risks and compliance requirements.
- Comply with Regulatory Requirements: Cross-border money transfers may have regulatory obligations, such as Know Your Customer (KYC) procedures and Anti-Money Laundering (AML) regulations. Ensure compliance to avoid legal issues.
- Prioritise Security: Opt for platforms with robust security measures, including encryption, two-factor authentication, and fraud detection systems. Safeguard sensitive information and consider cyber insurance for added protection.
- Seek Professional Advice: For complex transactions or regulatory concerns, consult with financial advisors or legal professionals experienced in international business transfers. They can provide tailored advice based on your specific needs and circumstances.
Remember, it's essential to conduct thorough research, evaluate costs, and consider the specific requirements of your international business when using specialist money transfer services and choosing the best method to transfer large sums of money.
What do I need to send a large sum of money abroad?
When sending a large sum of money abroad for business, you will need the following:
- Bank Account Information: Obtain the recipient's complete bank account details, including the name, account number, and International Bank Account Number (IBAN) or Bank Identifier Code (BIC)/SWIFT code.
- Identification: Prepare your identification documents, such as a valid passport or government-issued identification, as some financial institutions may require this information to verify your identity.
- Business Documentation: Depending on the purpose of the transaction, you might need to provide relevant business documents, such as invoices, contracts, or purchase orders, to support the transfer.
- Purpose of Transaction: Be prepared to explain the purpose of the transfer, especially if it involves investments, acquisitions, or other business-related activities. This is to comply with anti-money laundering and counter-terrorism financing regulations.
- Funds Availability: Ensure that you have sufficient funds in your business account to cover the transfer amount, including any applicable fees or charges.
- Compliance with Regulations: Familiarise yourself with the regulations of both your home country and the recipient country regarding international payment. This includes understanding any restrictions, reporting obligations, or tax implications associated with the transaction.
Remember to research the specific requirements of your chosen money transfer service method and comply with all relevant regulations to ensure a smooth and secure transfer of funds for your international business needs.
Can you make an instant large transfer abroad?
Instant large transfers abroad for business are possible, but they may be subject to certain limitations and considerations. Factors such as the destination country, the receiving bank's policies, and regulatory requirements can affect the speed and feasibility of instant transfers. While some payment platforms or specialised money transfer services offer expedited transfers, they may involve higher fees or stricter verification processes.
Instant business payments are possible using local payment methods such as SEPA Instant (EUR payments within the EU) or Faster Payments (GBP payments within the UK). If your payment provider offers these methods along with SWIFT payments, it can ensure speedier and often also cheaper payment delivery.
How good are the rates for large money transfers?
The fees for large payments can vary depending on several factors. Here are some considerations:
- Exchange Rates: The exchange rates offered by banks, online platforms, or foreign exchange brokers can differ. It's advisable to compare rates from multiple sources to ensure you get a competitive rate for your large money transfer.
- Transfer Amount: Large money transfers may provide an opportunity to negotiate better rates or lower fees with service providers. Some platforms or brokers offer preferential rates for larger transactions.
- Transfer Method: The method you choose for the transfer can also affect the rates. Wire transfers through banks may involve higher fees and less favourable FX rates compared to online platforms or specialised foreign exchange services.
- Currency Pairs: The currency pair being exchanged can impact the rates. Popular and commonly traded currencies often have better rates and liquidity compared to less frequently traded currencies.
- Market Volatility: Exchange rates can be influenced by market conditions and volatility. Keep an eye on economic factors that may affect currency values and consider timing your transfer strategically to take advantage of more favourable rates.
- Service Fees: Service fees associated with the transfer can vary. Some providers may charge a percentage of the transfer amount, while others may offer flat fees. Be sure to factor in any additional charges when assessing the overall cost of the transfer.
It's recommended to research and compare rates from different sources, considering all associated fees and services offered, to find the most favourable and competitive exchange rates for your specific large money transfer. Keep in mind that even within the same payment provider, the total costs can still vary depending on the recipient country and payment currency.
How much money can you send abroad?
The amount of money a business can send abroad varies depending on several factors, including the regulations of the home country, the destination country, and the purpose of the used specialist money transfer service. There are typically no universal limits on the amount of money a business can send abroad, but legal restrictions and practical considerations come into play.
Regulations surrounding cross-border money transfers aim to control capital outflows, prevent financial crime, and ensure compliance with tax laws. Different countries may impose specific limits on transfer fees or reporting requirements for certain types of transactions. It is hence crucial for businesses to familiarise themselves with the regulations of both their home country and the recipient country to understand any limitations that may apply.
Compliance with AML and KYC regulations is also a crucial aspect of international money transfers for businesses. Financial institutions may require businesses to provide documentation and information related to the money transfer provider, the transaction's purpose, the source of funds, and the business relationship with the recipient.
While there may not be specific limits set by money transfer companies, practical considerations come into play when determining the transfer amount. Consider the available funds of the business, cash flow management and risk assessment before making a large funds transfer.
It is advisable for businesses to consult with financial advisors, tax professionals, or legal experts who specialise in international business transactions to understand the specific limits, reporting obligations, and requirements applicable to their unique circumstances when sending money abroad.
Small sums vs large sums of money
The choice between sending small or large amounts of money for international business transfers depends on various factors and the specific needs of the business. Here are some considerations:
Small sums:
For day-to-day operational expenses or smaller payments, using digital platforms may be preferable.
- Cost-Effectiveness: For smaller transactions, using online payment platforms or digital remittance services may be more cost-effective due to lower fees compared to traditional bank wire transfers for larger sums.
- Speed: Small transactions processed through digital platforms often have quicker processing times, making them suitable for time-sensitive payments.
- Flexibility: Sending smaller amounts can provide more flexibility in testing and adapting to different payment methods or platforms, especially when exploring new markets.
Large sums:
For significant business deals, consolidating larger sums may offer cost advantages and streamline the transfer process, albeit with additional considerations for compliance and currency risk management.
- Efficiency: For significant business transactions, sending larger sums at once can be more efficient, saving time and effort compared to multiple smaller transfers.
- Negotiation Power: Large sums provide an opportunity to negotiate better exchange rates or fees with service providers, potentially reducing costs.
- Compliance and Documentation: When dealing with larger amounts, compliance with regulatory requirements may be more critical, and additional documentation may be needed for transparency and verification.
- Currency Risk: Large sums may be subject to currency fluctuations, which can affect the final amount received by the recipient. Especially important for businesses from low-margin industries where unfavourable exchange rate and associated exchange costs may result in losing profits.
Common reasons for sending large amounts of money overseas
There are several common reasons for businesses to send large amounts of money overseas. Some of these include:
- International Investments: Businesses may send substantial funds abroad to invest in foreign markets, acquire assets or properties, or establish international subsidiaries. Such investments can help expand business operations, diversify portfolios, or capitalise on growth opportunities in different countries.
- Supplier Payments: Large amounts may be transferred internationally to pay suppliers or vendors located in other countries. This is common when sourcing raw materials, components, or finished goods from global suppliers as part of the supply chain.
- Business Expansion: When businesses decide to expand their operations globally, significant funds may be sent abroad to set up new offices, manufacturing facilities, or retail outlets. This includes expenses related to infrastructure development, leasing or purchasing properties, and hiring local staff.
- Cross-Border Mergers and Acquisitions: In mergers and acquisitions, businesses may transfer large sums overseas to complete the acquisition of foreign companies. This includes the payment of acquisition costs, share purchases, or financial settlements as part of the deal.
- Overseas Employee Payroll and Benefits: If a business has employees stationed or working abroad, transferring large amounts of money is necessary for payroll, benefits, allowances, or relocation packages. This ensures that employees receive their compensation in the currency of their local jurisdiction.
- Loan Repayments: If a business has obtained financing or loans from international banks or lenders, it may need to transfer large sums to repay the borrowed funds along with interest payments.
- Cross-Border Trade: Sending large amounts abroad is common for businesses engaged in import-export activities. This includes payment for exported goods or settlement of import duties, customs fees, and shipping costs.
- Joint Ventures and Partnerships: Businesses may send substantial funds overseas to fund joint ventures, partnerships, or collaborative projects with foreign entities. These funds may be used for shared expenses, capital contributions, or investment in joint initiatives.
These are just a few examples of the common reasons businesses send large amounts of money overseas. Each situation may have specific considerations and requirements based on the nature of the transaction and the countries involved.
EMI vs Bank account for international money transfers
When it comes to international business money transfers, there are different options available, including EMI (Electronic Money Institution) accounts and traditional bank transfer accounts. Here are some considerations for each:
EMI Accounts:
- Speed and Efficiency: EMI accounts often offer faster and more streamlined processes for international money transfers compared to traditional banks. They leverage digital platforms and advanced technology to facilitate quick and efficient transactions.
- Lower Fees: EMIs are known for offering competitive rates and lower fees compared to traditional banks. This can be advantageous for businesses seeking cost-effective solutions for their international money transfers.
- Currency Conversion: EMIs often provide favourable currency exchange rates and options for multi-currency accounts, allowing businesses to hold funds in different currencies and convert them as needed.
- Additional Services: Some EMIs offer value-added services like integrated payment solutions, virtual cards, and merchant services, which can be beneficial for businesses conducting international transactions.
Traditional Bank Accounts:
- Established Infrastructure: Traditional banks have an extensive network and established infrastructure for global money transfers. They offer a wide range of services and have long-standing relationships with correspondent banks worldwide.
- Regulatory Compliance: Banks are subject to strict regulatory frameworks and compliance measures, which can provide an added layer of security and assurance for businesses involved in international transfers.
- Accessibility: Traditional banks often have physical branches and ATMs in various countries, making it easier for businesses to manage their finances and access funds internationally.
- Trust and Familiarity: Many businesses have longstanding relationships with their banks, which can contribute to a sense of trust and familiarity. This can be important for businesses seeking stability and reliability in their cross-border money transfers.
The choice between an EMI account and a traditional bank account depends on factors such as transaction volume, cost considerations, speed requirements, and the level of additional services needed. Businesses should evaluate their specific needs and compare the offerings, fees, and capabilities of different money transfer providers to determine the most suitable option for their international money transfers.
Why choose MultiPass for large business money transfers?
MultiPass is a UK-based FCA-registered EMI that specialises in facilitating international payments for a wide array of businesses, ranging from wholesale trade, IT, e-commerce, digital marketing, and many others operating on a global scale. We understand the complexities of transacting in foreign markets so we made it our goal to minimise friction, stuck payments and excessive FX fees associated with international banking.
Unlike traditional banks that often reserve personal support for top-tier and high-net-worth customers only, we provide the same exceptional quality of service to every client, without discrimination based on size. Let's look into your individual case – sign up with MultiPass today!
We assign personal managers to every business account