BLOG: Repatriating overseas earnings
Whether you are an individual who has been working overseas or you are a business located overseas, there is every chance that your earnings have been placed into a local bank account. This is common practice as it enables you to access the cash in the local currency but it also makes it easier to make and receive payments.
However, if you are planning to move back to your own country, then you are going to need to repatriate your overseas earnings but what does that entail?
Repatriating Earnings from Overseas
The process of repatriating earnings is when you convert foreign currency into your local currency. This process is often necessary as a result of business transactions, foreign investments or even international travel. However, when this takes place there are many things to take into consideration such as tax, the foreign exchange rate and the current market situation at that moment in time. Of course, you are going to want to repatriate your overseas earnings at the right time and that could mean that you need to rely on professional advice or guidance.
Whether it’s receiving rate alerts alerting you to a particular exchange rate or up-to-date market news, they can all help you to make the right decision at the right time.
Repatriation – Understanding What It’s About
When it comes to repatriation, from a corporate perspective, it could relate to the conversion of any capital that is held to the currency of the country that the business or individual resides or moves back to.
There are now many businesses and individuals operating overseas. However, with that comes a potential need to repatriate money either as a one-off or on a regular basis. There are many complexities that surround this process as it can mean that businesses and individuals are susceptible to foreign exchange fluctuations, transfer fees, taxes etc, and they will need to ensure that the earnings are converted to the local currency at favourable exchange rates in a fast and efficient manner. Therefore, it is sometimes more beneficial to seek out professional advice to ensure this process is managed smoothly, as well as safely and securely.
The foreign exchange market can be very volatile, and the value of a particular currency can alter many times during the course of a day. Sometimes the market can move favourably, and other times it can move in the wrong direction, resulting in the value of the currency you hold being decreased. Despite this, you can utilise the expertise of foreign exchange specialists to help you identify the right time to move your money and minimise the risk of currency fluctuations. With economic events and government announcements having an influence on the exchange rate, should you be unaware of these economic releases the value to the amount you repatriate could be considerably impacted.
It is common for businesses, and Individuals, to operate in other countries. There are UK companies operating in foreign countries where they receive payment in that local currency but at some point, the earnings will need to return to the UK. So, when a company earns an income in a foreign currency, the earnings are susceptible to foreign exchange risk. Therefore, they have the potential to lose or gain value as a result of fluctuations in the value of both currencies. NewbridgeFX can help both businesses and individuals to repatriate overseas earnings by offering a fee free, fast, efficient and secure service. For further information on how NewbridgeFX can help please contact us