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How Can An Indian Company Open A Bank Account In Europe?

By | Banking

India is a pretty progressive country that inhabits a billion people. The pace at which India is developing, both technologically and economically is brisk. This success, development and progress are a result of its performance in the international market.

The major rule of expanding to other countries is to have a base set up in the destination country. For instance, if somebody is trying to expand his horizon with a move to a different country, then he must first set up a Headquarter or a base of operations for his firm. The amalgamation of different European countries in a single union is named as European Union. The laws and regulations in the countries that are part of the EU are pretty similar, with only minute differences here and there. The intercontinental transactions has been made easier in Europe since the creation of the European Union, but what about the millions of Indians trying to expand the borders of their business to the vast greenery of Europe? In order to buy property or to buy anything else for that matter in an entirely different country, you need to have a bank account in the country.

Here is a detailed explanation of how to do exactly that;

Choosing a Bank

Banks in Europe are allowed the courtesy of deciding their own customers. No laws within the European Union can prevent or force a bank to open a bank account for a particular customer. Therefore, it is essential to choose a bank beforehand that has a history of granting permission for the opening of a bank account for people who are not exactly residents of the European Union.

Filling the form

An online form can be submitted from the comfort of your home that expresses your desire to the bank about getting an account opened in your name. After the form is filled, the bank will inform you about the ways you can identify yourself as a proper candidate who is viable to receive the bounties of a bank account.

Proving your Identity

For an Indian national, an important step in opening a bank account in a European country is providing the required documents to proof your identity. Identifying yourself is a process that gives the bank a go-ahead to process the opening of your bank account. There are two methods through which you can identify yourself in any European country;

  • By Lawyer or Notary
  • By Bank

By lawyer

It means to identify yourself in a European country with the help of a lawyer; the lawyer takes responsibility on your behalf. The lawyer that takes the responsibility must be a resident of the EU.

By Bank

It is a very simple process, it involves the bank that you use in any state of India to share details with the bank where you are trying to open an account. The bank back home in India and the bank in your destination country collaborate together and settle the case.

This is all it takes to open a bank account in any country in Europe. Apart from opening an account in a bank in Europe, some other questions also wander in the minds of many Indians who decide to expand their business to Europe.

Virtual bank account for exporters

If you export into Europe you can also consider signing up with B2B Pay. With B2B Pay an you can get your own virtual bank account inside the European SEPA zone, combined with vastly cheaper fees for currency exchange and transfer to your local bank account.

Paying Taxes

The regulations for paying taxes on a bank account in Europe are particular to the country you have chosen to open a bank account. Overall, most countries do collect some service charges or taxes, while some such as “Germany” do not compel you to pay taxes to the government unless you make use of the money in the country.

B2B Pay – Exports to Europe Made Easy

By | Banking, Money transfer

B2B payment simply refers to the business transaction between 2 businesses for the completion of a task. For instance, a company A makes shoes, but to make shoes, it needs leather. Conversely, a company B specialises in the accumulation of leather. In order to fulfil its purpose, company A needs leather from company B so that they can create shoes. The relocation of money in this whole scenario is referred to as B2B pay, or Business to Business pay.

b2bpay-logo

B2Bpay.co is a joint venture of innovators and entrepreneurs from Finland, New Zealand, India, Holland and Brazil. The basic idea of the site is to help exporters receive money. We provide exporters with a virtual bank account inside the European Union and then transfer the incoming money to the exporter’s local bank account in for example India or Brazil.

When an investor wants to relocate money between European countries and India, he or she is required to pay 3 to 6% in terms of charges for the relocation. That does not seem to be the problem for B2B Pay, since B2B Pay transfers money to and from these countries at the rate that is below 1%, which means you save almost 80%.

Transparency about fees

In its entirety, Europe has a cumulative sum of nearly 200,000 banks; all of these banks have variable fee plans, structure and processing times for transactions. Exchange rate plays a vital role in this whole situation, for instance if you receive an amount from Europe, they will only initiate the transaction by using a payment order in their bank. Usually a fixed charge is deducted for the services, but the big trade-off is the exchange rate. The bigger the difference in exchange rate, the bigger the difference in the total amount sent and total amount received. This is a reason in potentially losing hundreds of euros. On the other hand, B2Bpay believes in transparency about charges. They claim to provide the best business in town with the best rates in the market. This can be proved by the fact that their rate for India is only 0.8%. Which means, your costs are reduced by up to 80%.

Annually, more than 100,000 small exporters and businessmen, send goods and provide services to their clients in different parts of Europe. These transactions and deals are carried about in a similar manner, the two parties meet, agree on a deal, sign documents that make the transaction official. The exporter then exports the product or the service to the importer, while the importer returns the favour with money. As expressed earlier, all the payments that the importer makes, are made with his or her local bank, while the exporter bears all the cost related to the transaction.

No more overpaying

The real question is, how does B2B Pay help you in avoiding such circumstances where you have to overpay on transactions to receive your money?

To take care of all the hullaballoo, B2B Pay conducts all necessary checks when it registers you as a customer if you sign-up. Additionally, it also adds information about your bank account number into its database system.

B2B Pay IBAN number in Europe

To receive money in any country associated with the European Union, B2B Pay also provides you with a European IBAN bank account number. An IBAN number is your key to keep track of your transactions and your money. Thanks to SEPA the very IBAN number can be used in all 34 states under the banner of European Union for absolutely free.

When the money arrives in your European bank account, B2B Pay sends it to your local bank, since they already have your local bank account number. Additionally, their fee for this transaction is 80% less than the lowest fee offered by any other service provider of the same genre. This guarantees a saving of 2-5% on the value of transaction. Of-course, this will directly impact on your profit by 10 to 20%.

In conclusion, when you sign up for B2B Pay, you get to take a compliance test only once. It also supports profitable currency conversion and payment to your original bank is so much simpler. Furthermore, it provides you with a European IBAN account number that sets up your European transactions pretty neatly.

https://www.b2bpay.co/

b2bpay logo

Banks in India

By | Banking

Geographically, Asia is the largest continent of the world, with over 60% percent population of the entire planet. The continent has more than 50 countries, that are either very rich, like China, India or Indonesia, very poor and disturbed, like Iraq, Afghanistan and Pakistan etc. China and India are the two front runners from Asia, which are at competition on over everything. They have similar numbers in population, similar industrialization scopes, and similar level of education, in short the only visible difference is the fact that China is a socialist country, while India is a democracy.

India, with a population of over 1.2 billion people, serves as the ideological, geographical, industrial, and technological hub for South Asia. That being said, more and more companies from far off lands like Europe and America, want to come over here and invest in the market because they realize that India is booming economically. This outreach by firms from abroad has brought many opportunities with itself. This trend has also convinced many leading firms from the banking sector of the world, to set up shop in India. Nowadays, numerous banks from overseas can be seen operating in the country. These banks include, multimillion conglomerates and newly budding banks alike.

Banks in India

Banking in India has always been lucrative for the people of the country. Non-Indians believe in this weird myth which says that Indians are wonderful at Mathematics and great with numbers. This might not be true in its entirety, but there is no denying the fact that Banking is one of the high risk and high reward sector in India. Banks in India, range from million dollar franchises to government operated banks. A composed study of the biggest banks of India, is as follows;

State Bank of India

The State bank of India is the government controlled bank of India. It is responsible for all the state owned tasks of the country, like printing and distributing currency, submission of utility bills and etc. It currently has more than 9143 branches throughout the country.

ICICI bank

ICICI bank is not the largest in terms of number of employees or branches but its net profit at the end of the fiscal year is enough to get it ranked second in the list of the biggest banks of India. It currently has more than 557 branches throughout the nation.

Punjab National Bank

As the name suggests, the mainstay of banking sector in the state of Punjab. Punjab national bank has more than a whopping 4000 branches across the nation with over 58000 employees throughout.

Canara Bank

The bank is the 4th largest in the country when it comes to number of branches, number of employees and the amount they fork out for each high ranking employee. As of this moment, they have 2532 branches throughout all the states of India.

Bank of Baroda

The bank of Baroda is the country’s 5th largest bank, with over 2 and a half thousand branches inhabiting more than 38000 employees, the bank is rightly so, the mainstay of banking in the region of Baroda.

Bank of India

With a combined count of over 2000 branches and over 40000 employees throughout the country, the Bank of India occupies 6th spot in our list of the biggest banks in India.

Union Bank of India

2000 branches, 25000 employees, it is safe to say Union bank of India is the 7th largest bank in the whole country.

International banks present in India

In a country like India, which is rapidly progressing towards economic stability and financial prosperity, numerous firms from different countries try to seize this opportunity.   There are a few International banks that have gained a strong hold in India, namely;

  1. Standard Chartered Bank
  2. HSBC Bank
  3. CITI Bank
  4. The Royal bank of Scotland
  5. Deutsche bank
  6. DBS Bank
  7. Barclays Bank
  8. BNP Paribas
  9. Bank of America
  10. Credit agricole corporate

Exporting to the EU

By | Banking, Money transfer

In primitive times, men thought they can fall off the earth if they reach the edge. They also thought that India was in west (Hence, the west-indies). Some men thought it is impossible to fly. Guess what? Everyone was proved wrong because of people who believed in “seeing is believing”. Travelling is the basic element of life, people made discoveries and shared their culture with people from different parts of the world by travelling to the nooks and corners. Today, the world is a global village because of this. Similarly, the European Union (EU), an alliance of more than 25 states of the continent of Europe, has paved way for people from different parts of the world to export their products and services to Europe and continue the historical trend of spreading culture.

Conditions for Exporting to the EU

  • 3 years history of business (minimum)
  • There should be no conflict of interest
  • The owner must possess technical and professional capability
  • Financial and economic stability is a must
  • Must not be a legal convict, fraud, tax scammer and other malpractices
  • Proof of payment of social security obligations
  • A bunch of references

Bank Account in Europe

For exporting to the EU it can be useful to have a European bank account in any one of the 25+ member states of the Union. Once you have an account, everything from then on in, is a piece of cake. Exporting to the EU is not only a way to spread culture, but it is also a plus to spread your financial prowess and status. Most companies from developing countries consider it a step up if they export to Europe.

Exporting without Moving

You can also export to Europe without ever moving to the continent by setting up 3rd party management like “Entity asset management”. Services like these are a B2B service that requires a B2B payment, but they relieve you off the stress of moving back and forth to Europe.

FX spread

By | Banking, Money transfer

Before we discuss currency spread, it is important that we first understand how foreign exchange market works. In the FX transactions, currency is paired such that the relative value of one currency is denominated in the units of the other currency. The exchange rate in the international market depends on the customer’s willingness to purchase the quote currency what is known as BID. A bid is the highest buying price of the currency pair. The price of the quote currency is known as the ASK. Ask is the lowest price that a given currency pair is to be sold.

All the countries in the world, whether large developed countries or poor third world countries, have their own monetary currency. In the primitive era, gold was the dominion that determined the richness of a person. But as times changed, countries have developed their own systems for monetary exchange.

Famous Currencies

  • US Dollar
  • Sterling Pound
  • Euro
  • Canadian Dollar
  • Taka
  • Yen
  • Indian Rupee
  • Saudi Riyal
  • Dinar etc.

All these currencies on their own have proved an effective way of dealings and happenings, as opposed to the previously implemented Barter system. But what if you want to buy something from an American and you are a European National? How can you determine which currency has more value? Obviously, to you, Euro is more valuable, but to the seller, his beloved Dollar is more precious. This is the reason; terms like exchange rate and FX spread were first coined.

In terms of finance, an exchange rate is defined as the rate at which one currency can be exchanged in favor of another currency. As mentioned before, it also helps gauge the value of one currency in a country other than itself.

What is FX spread

FX spread is actually the difference between the price at which an entity is bought and the price at which it is sold (Here, entity means, “Currency”). Spread is the difference between the two prices, the price that the market gives to buy from the trader and what the trader gives to buy from the market.

The reflex action of people is to buy and sell the currency immediately, which means there has been no change in the exchange rate, but this result in the loss of money. Reason being, the buy price is always lower than the selling price.

As in, the EUR/USD currency rates at a bank may be 1.0001/1.3001. This signifies a difference of 1000. This difference is considered to be extremely high in comparison with exchange rates for online Forex financiers, such as 1.0001/1.005, a difference of 4.

Bid and ask price

Bid is normally lower than Ask. The difference that comes between Bid and Ask is what is known as Spread. It is important to note that we have fixed and variable spread. Fixed currency spread is the difference between Ask and Bid and is not dependant on the market conditions. The dealing companies set the fixed spread. On the other hand, the variable spread fluctuates in relation to the market conditions. When the market activity is low, a variable spread is also low with approximately one or two pips, but when the market is volatile, it can rise to more than 40 pips. This is what brings uncertainty in the FX transactions.

Factors influencing currency spread in Forex trading

Several factors influence offer bid size in Forex trading. Currency liquidity is the most important of them all. Popular currencies pairs are always traded with low spreads while rare currencies have higher pips. The other factor that influences the spread is the amount of money transacted. When the market is volatile, the bid offer spread is higher than during quiet market conditions. Nowadays, Foreign exchange market is highly competitive because brokers are getting closer to the customers, for this reason, currency spreads tend to be fixed and remain at the lowest level possible.

Traders need to pay close attention to currency spread management. The successful trading strategy should be based on effective market evaluation and specific financial conditions. Because currency spreads are subject to high volatility spread management should include market tools such as risk analysis, forecasting, complex analysis, and transaction cost evaluation.

How to manage currency spread

• Trade at favorable trading hours, this is the time when most sellers and buyers are in the market. When there are many sellers and buyers of a given currency pair, it increases the competition in the market which increased the spread.
• You should also avoid selling and buying thinly traded currencies. Market markers compete to trade the popular currencies such as the US dollar or the Sterling Pound. When you trade in the thinly traded currency pair, you will only get few market markets, and this lessens the competition.

Money transfer to India

By | Banking, Money transfer

How to Send Money Back Home without Much Ado

India is situated in the heart of Asia. It is known for its cultural diversification, its history, its monuments and what not. However, India also has the third largest population in the world. According to the census of 2003, the population of India is nearly 1.3 Billion people. It would not be much of a problem had all its occupants were living on a satisfactory income, but unfortunately, they are not. Almost 80% of Indian people live below the line of poverty. In this regard, most Indians strive to grow up and move abroad for earning money. This strategy of the people of India has brought fruitful results to the country because firstly, it has outsourced a lot of people which has decreased the population boom. And secondly, because when these people send money from abroad, part of it also assimilates in the national wealth of the country.

There are a lot of methods via which overseas Indians send money back to their relatives in India; some of these are Greenwich Money Exchange, Western Union Money Transfer, and Remit2India etc. But the most famous of these options is Continental Exchange Solutions. It is a huge conglomerate, whose division for India is called “Ria Financial Services”.

This assists millions of overseas Indians in their quest of money transfer to India.

Sending Money

Continental Exchange Solutions allow customers to send money from wherever in the world to India via a debit card or a credit card, whichever suits your needs. You can also go to one of the millions of branches of Continental Exchange solutions personally and handover cash to them to transfer it to a particular city in India.

Receiving Money

Receiving the money sent via Continental Exchange Solutions is as easy as 123. There are two options for your recipient in collecting the money. He or She can either transfer the money received directly to his bank account, or the money can be collected personally through the 44000 branches of Continental Exchange Solutions throughout India.