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Investments through foreign banks?
Old 11-27-2011, 05:27 PM   #1
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Investments through foreign banks?

Was in Hong Kong recently and one of their newspapers had a short article:

Local lenders offer hope in chaos - The Standard

In recently years, there has been some talk about investing in foreign currencies through bank accounts in other countries, on the expectation that these other currencies would appreciate against the USD.

Well in this case, the HKD is pretty stable against the USD. So the appeal would be the yield, if these HK banks are indeed financially sound. Though I'm not sure that what they're talking about are insured bank accounts or that the yield would be guaranteed for a certain term.

Anyone investing with foreign banks?
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Old 11-27-2011, 05:34 PM   #2
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The last thing I need is that kind of additional paperwork, particularly in terms of tax filing.
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Old 11-27-2011, 05:35 PM   #3
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Quote:
Originally Posted by explanade View Post
Was in Hong Kong recently and one of their newspapers had a short article:

Local lenders offer hope in chaos - The Standard

In recently years, there has been some talk about investing in foreign currencies through bank accounts in other countries, on the expectation that these other currencies would appreciate against the USD.

Well in this case, the HKD is pretty stable against the USD. So the appeal would be the yield, if these HK banks are indeed financially sound. Though I'm not sure that what they're talking about are insured bank accounts or that the yield would be guaranteed for a certain term.

Anyone investing with foreign banks?
It's often impossible to open an account with a bank unless you are resident in the country. Also if you are a US citizen FATCA may well make you unattractive to a foreign financial institution. If you get past those hurdles you'll open up the fun of cross border taxation.
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Old 11-27-2011, 10:53 PM   #4
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+1 on what nun says.

I've had a UK bank checking and savings account for decades, and have a small UK pension paid into it. However, the savings account is small interest, ~1.5%, and I've looked multiple times at other options in the UK, including Bank of Baroda, offering much better rates and all require UK residency.

Up to now I've transferred large chunks of money (~£10k at a time) to my US bank using the UK firm HiFx but I received an e-mail from them last week saying that due to changes in legislation they can no longer service USA residents. I expect this is more to do with the US bank lobby than security, so I'll have to look for other ways (more expensive I'm sure) to transfer funds.
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Old 11-28-2011, 03:04 AM   #5
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I have savings in Europe. The taxes are a real nightmare, I need HR Block every year to sort them out.
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Anyone investing with foreign banks?
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Old 11-28-2011, 09:53 AM   #6
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If you are looking for FDIC insured RMB exposure, you can open an account at Bank of China (NYC) either the Madison ave branch or Chinatown branch. They will allow you to convert/deposit $4,000 a day into a non-interest bearing savings account. When you withdraw your funds, they are converted back to dollars at the prevailing rate. The only upside is currency appreciation so it must be considered a LT hedge against dollars.
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Old 11-28-2011, 10:18 AM   #7
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Quote:
Originally Posted by nun View Post
It's often impossible to open an account with a bank unless you are resident in the country. Also if you are a US citizen FATCA may well make you unattractive to a foreign financial institution. If you get past those hurdles you'll open up the fun of cross border taxation.
Thanks for the reminder about FATCA.
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Old 11-28-2011, 11:40 AM   #8
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Thanks for the reminder about FATCA.
FATCA is more relevant for the foreign institution and the forms for the US tax payer and still being developed. FBAR is an immediate concern.
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