US Office Solution for Small Foreign Banks
Small foreign banks face high costs to enter the US banking market. On one of our previous post, USA Banking Representation for Foreign Banks, we detailed the options for opening a banking office in the USA. But all of the options listed in our post involve a substantial investment.
One way to avoid the high cost of installing an office, especially if the bank is small, is to start by establishing a company in the USA. This company must be completely independent of the bank and not related in any way. Depending on the demographics, the company can be located in an area that Expats visit frequently. The proximity of a consulate or embassy is an ideal location.
The company will offer the accounts exclusively to the Expat community in the USA. This works best if the company contact people of the same Expat community who are very well connected. It can also work with the consulate or embassy to refer clients.
- But this system has some requirements:
- The company will not open accounts.
Account applications will be forwarded to and handled by the Bank in the country of origin (sent via email).
The Bank will need:
- To open an account in a US bank.
- The Bank can also use RIA to receive the funds from account openings.
The company and the bank will need to establish an agreement for a commission structure. Also, the Bank needs to design a fee structure to recover the cost of using RIA and small deposits.
Keep in mind that this is not a banking structure. This is not a banking office either. This is only a way to support and create awareness of a particular bank in a particular Expat community in the USA.
Fulton Abraham Sanchez, CPA, founder of FAS CPA & Consultants of Miami, FL, is a Certified Public Accountant specialized in Offshore Banking and International Tax Planning. You can email him to firstname.lastname@example.org.
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