International Banking Advisory
We provide comprehensive support and expertise to help businesses navigate the complex processes of company formation, mergers and acquisitions, and ensure a smooth and successful transition.
International banking transactions are quite complex for foreign investors. Therefore, it is important to work with experts in international money transfers and banking transactions.
It is important for investors to be accurately informed about the national and international regulations and penalties that must be followed during foreign money transfers.
Within QANAQ's partners, there are individuals and companies who have a background in banking and international banking, as well as familiarity with local and international regulations. Some of the countries in which we provide consultancy services in international banking transactions for our clients include Brazil, the United Kingdom, Nigeria, Liberia, Uganda, Rwanda, Kenya, Turkey, Azerbaijan, Qatar, Italy, Romania, Germany, Austria, Slovenia, Canada, the United States, Malaysia, Japan, China, South Africa, Serbia, Switzerland, Uzbekistan, Luxembourg, Greece, Malta, Pakistan, the United Arab Emirates, Morocco, and Tunisia.
Transactions in international trade are recorded in the bank debt or credit records of the respective countries. In this agreement, the parties are free to determine all details. Both parties must agree to cancel the agreement.
Forfaiting is a financial instrument that is commonly used for investment goods in long-term and credit-based export-import transactions around the world.
Companies can work with intermediary institutions to carry out international banking transactions at more favorable costs.
Additionally, they can reduce their tax burden by establishing their companies in countries with tax advantages. In this way, they can become more competitive in their international transactions.
Foreign exchange markets are some of the most advanced markets in the world where buying and selling of foreign currencies take place. These markets play a significant role in shaping the finance of international trade and help create international currencies through the exchange of different currencies. In international markets, the US dollar is known as the "reserve currency" because most transactions occur using the US dollar. Other currencies, such as the pound and euro, are also used as exchange instruments. The exchange rate is the price of a currency against another currency, and it is calculated based on a quotation. The difference between the buying and selling rates is referred to as the "spread". With the advancement of technology, foreign exchange markets are now created electronically. In this market, intermediary institutions also make buying and selling agreements, and exchange rates are constantly changing.
How is the discounting process carried out?
The process of discounting involves a business that sells goods on credit to its customers issuing a promissory note on behalf of the buyer. The buyer then approves it directly with their bank, which turns the promissory note into a commercial acceptance document. These approved promissory notes are then sold to the seller's bank or money market intermediaries at a certain discount rate, allowing them to be converted into cash.
International money transfers are important for companies that invest or export goods/services abroad. These transactions can face various risks such as exchange rate fluctuations, country regulations, and transaction fees. Therefore, these companies need to take care to ensure that their international money transfers are carried out smoothly and with minimal costs. Different financial instruments and services can be used for this purpose, such as SWIFT, telegraphic transfers, international payment cards, wire transfers, and blockchain technology. Companies should compare the features and costs of these methods to determine the most suitable option for their money transfer needs.
A Forward Foreign Exchange Transaction is an agreement to buy or sell a specific amount of currency at a predetermined price on a future date. The transaction must be executed on the agreed-upon future date, regardless of the current market rates. These transactions offer flexibility in terms of maturity options, as various exchange and parity options can be used. The forward exchange rate, price, or parity can be fixed on the transaction day. This type of transaction is preferred because it eliminates the risk of currency fluctuations and provides clarity for future cash flows and profitability by removing uncertainties.
A futures contract is a type of contract traded in the derivatives market that creates an obligation for the parties involved to buy or sell a specific, standardized quantity and quality of a commodity, value, financial indicator, security, or currency at a previously agreed-upon price on a future date. Futures markets are organized markets where standardized contracts are exchanged, with the purpose of providing arbitrage and protecting parties from risks and speculation. Essentially, futures contracts are standardized forward contracts that can be divided into two categories: commodity and financial futures contracts. Commodity futures contracts include agriculture, energy, precious metals, and industrial metals futures, while financial futures contracts include currency, interest rates, short-term and long-term interest rates, and stock index futures contracts. Futures contracts are traded on organized exchanges, registered with exchanges, and regulated in compliance with exchange standards, with the underlying assets of the contract standardized in every aspect. The contract is terminated by the opposite direction trade, and since they are in bearer form, these contracts are negotiable. Futures markets have a clearinghouse system that facilitates the entire operation of the futures market. Margin accounts can be created by daily calculations to enable investors to buy and sell.
The Zero Cost Collar is a type of forward currency transaction in which a bank allows for the execution of a transaction based on the upper and lower limit levels determined on the agreement date according to the market rate at the maturity date of the transaction. This allows for benefiting from a downward (upward) movement of the exchange rate of the determined currency at the specified maturity, while providing protection against an upward (downward) movement of the exchange rate. This is preferred since it provides a hedging opportunity against currency risk without incurring any premium cost.
International Leasing Agreements
Businesses often prefer to obtain necessary investment goods through leasing due to the high cost of importing these goods and the risk of them becoming obsolete over time due to technological developments. Leasing can be defined as renting a good to provide financing instead of purchasing it on credit.
Institutions such as IFC, LEASEUROPE, IASB, UNIDO, ECLAT, and ASIALEASE establish regulations related to leasing. LEASEUROPE has provided the clearest definition of financial leasing, which is a contract signed between the lessor and lessee for a specific period of time in which the lessor purchases goods selected by the lessee from the manufacturer and owns them, but the lessee is allowed to use them in exchange for a certain rental payment.
There are two commonly used leasing models in international trade:
The goods subject to the leasing agreement can be returned to the lessor when the contract expires and the conditions are met.
The lessee can be given the right to take ownership of the goods when the contract expires and the conditions are met.
QANAQ also provides consulting services on leasing agreements in foreign countries to its customers.