How to choose an international bank for your business

Most businesses operate solely domestically but, if your business is operating in multiple countries, it might be a good idea to open an international business bank account.

In this article we’ll discuss what an international business bank account is, why a business might choose to use one, and what some of the advantages and disadvantages of their use are.

As with all financial decisions, it’s a good idea to seek independent specialist advice to ensure a financial product is right for you and your business.

What is an international business bank account?

International business bank accounts can offer all of the benefits of a domestic bank account with the added advantage of being able to process cross-border money transfers – allowing a business to operate abroad.

Many high street banks offer international bank accounts.

Like domestic accounts, international bank accounts can also have additional features such as:

• physical payment cards
• mobile apps
• accounting and invoicing tools
• customer support.

When should a business consider getting an international bank account?

If your business works in different countries, trading in multiple currencies, or transferring money between currencies, it could be a good idea to set up an international business bank account.

This will make transactions easier to manage with international customers and/or suppliers.

An international business bank account could also be a useful addition if you often travel abroad for business.

How do I get an international business bank account?

Many major high street banks offer international business bank accounts, but it’s also a good idea to look at challenger banks too, as each account will differ in what facilities are offered and ancillary benefits.

Each bank will have its own eligibility criteria so it’s a good idea to compare and contrast before opting for a particular provider.

Some banks may also insist you open a domestic business account with them before you open an international account.

Also be aware that some accounts may specify a minimum deposit limit in order to open the account.

What does IBAN and BIC mean?

Your International Bank Account Number (IBAN) and Bank Identifier Code (BIC) are just your account number and sort code presented in a standard format that’s recognised worldwide. 

IBAN and BIC make it simpler to handle international payments. 

By using IBAN and BIC, payments can be processed automatically, which means they’re quicker, more secure, and less expensive compared to old-fashioned paper methods like foreign drafts or cheques.

What are the advantages of using an international bank account for your business?

International bank accounts can offer numerous advantages for businesses that operate in multiple territories.

Client support

Most business accounts, including global ones, come with the added benefit of dedicated client support through client managers. 

These professionals are there to assist with international payments and handle any questions you might have along the way.

Rapid cross-border payments

While there are plenty of international payment networks and methods out there, not all of them are quick. 

Some providers may need up to five working days to process a payment. 

However, international business accounts are often designed to handle faster transactions.

Expanding the reach of your business

International business accounts make it much easier for businesses to expand into global markets by simplifying access to those markets. 

Most international business accounts will allow access to multiple currencies, making this process even easier.

What are the disadvantages of using an international bank account for your business?

As with all financial products, there are potential drawbacks to using international bank accounts for your business.

Transfer fees

Though some international bank accounts feature cheaper fees, international payments often come with much higher fees than domestic ones with some providers charging as much as $30 per SWIFT transfer.

For businesses managing frequent overseas payments, these costs can quickly add up and start affecting the cash flow of the business.

Foreign regulations

Foreign rules and regulations are always changing, and these shifts can catch business owners off guard. 

Such changes have the potential to disrupt the flow of international payments, making it harder to send or receive funds. 

Staying on top of these developments is crucial to avoid unexpected challenges.