Advice on money transfer business
"As soon as I see the word ""friends"" along with money transfer I think scam. But ignoring that red flag.... You will have American companies reporting to the IRS that you are a Canadian Vendor they have hired. Then you are transferring money to people in Bangladesh.  Assuming also that you fill out all the regulatory paperwork to establish this Money transfer business  you may still face annual reporting requirements to 3 national taxing authorities. In the United states there are situations where the US Government hires a large company to complete a project. As part of that contract they require the large company to hire small businesses to complete some of the tasks. In a situation where the large company is imply serving as a conduit for the money between the government and the sub-contractor; and the large company has no other responsibilities; the usual fee for providing that function is 8% of the funds. This pays for their expenses for their accounting functions plus profit and the taxes that will trigger. Yet you said ""At the end of the day, I will not earn much, but the transactions will just burden my tax returns.""  The 8 percent fee doesn't include doesn't include having to file paperwork with 3 nations.  Adding this to all the other risks associated with being an international bank, plus the legal costs of making sure you are following all the regulations...No thanks."
You would think so wouldn't you, after all, it's your money! In practise though, it's not as easy as you might think because anti money laundering and anti fraud laws mean you generally have to withdraw money to the same account you funded your trading from. Some forex trading account providers will allow you to fund from multiple sources, but then insist on putting money back to those sources in some proportion or some order or other. Some forex trading account providers at least claim that they may, AT THEIR DISCRETION, let you do it, IF the destination account is in the same name, but I wouldn't be surprised if they charged you for it, and actually the charges might be somewhat justified if they have to invoke identification procedures to make sure the other account is indeed actually you. You would have to talk to a specific service provider and see if they agree to do what you want, they all have FAQs about funding and withdrawal so you can scan around online for the slightly more flexible ones and then give them a call. You might find it difficult to get any guarantees out of them though. "As you've observed, when you're dealing with that amount of money, you're going to have to give up FDIC guarantees. That means that keeping the money in a bank account carries some risk with it: if that particular bank goes bust, you could lose most of your money. There are a few options to stretch the FDIC limit such as CDARS, but likely can't handle your hypothetical $800 million. So, what's a lucky winner to do? There are a few options, including treasury securities, money market funds, and more general capital investments such as stocks and bonds. Which one(s) are best depend on what your goals are, and what kind of risks you find acceptable. Money in the bank has two defining characteristics: its value is very stable, and it is liquid (meaning you can spend it very easily, whenever you want, without incurring costs). Treasury securities and money market funds each focus on one of these characteristics. A treasury security is a piece of paper (or really, an electronic record) saying that the US Federal Government owes you money and when they will pay it back. They are very secure in that the government has never missed a payment, and will move heaven and earth to make sure they won't miss one in the future (even taking into account recent political history). You can buy and sell them on an open market, either through a broker or directly on the Treasury's website. The major downside of these compared to a bank account is that they're not as liquid as cash: you own specific amounts of specific kinds of securities, not just some number of dollars in an account. The government will pay you guaranteed cash on specified dates; if you need cash on different dates, you will need to sell the securities in the open market and the price will be subject to market fluctuations. The other ""cash-like"" option is money market funds. These are a type of mutual fund offered by financial companies. These funds take your money and spread it out over a wide variety of very low risk, very short term investments, with the goal of ensuring that the full value will never go down and is available at any time. They are very liquid: you can typically transfer cash quickly and easily to a normal bank account, write checks directly, and sometimes even use ""online bill pay""-like features. They have a very good track record for stability, too, but no one is guaranteeing them against something going terribly wrong. They are lower risk than a (non-FDIC-insured) bank account, since the investments are spread out across many institutions. Beyond those two somewhat ""cash-like"" options, there are of course other, more general investments such as stocks, bonds, and real estate. These other options trade away some degree of stability, liquidity, or both, in exchange for better expected returns." You're licensed to sell investments. You could get a job at a broker or RIA. You can sell stocks bonds funds annuities and work for a fee based ria in sales. You're technically licensed to give advice on investments but without at least some academic expertise in finance I would avoid it. Helpful?  edit: you don't need securities licenses to work in a bank. you'll be selling loans which is regulated differently. "In Frank Abagnale's book ""Art of the Steal"" the author talks about how to set up a bank account for safe wire transfers. He recommends setting up an account at your regular bank and specifying that money can be transferred into that account from another bank, and out to your regular account only. You are then free to give the necessary transfer information to whomever you want, knowing full well they can't take money out. This guy should know what he's talking about since he's an ex-confidence man legitimately working as an American security consultant." If you’re concerned about transferring  USD, I can’t really help you there. But if you’re looking to transfer wealth, I believe that’s where something like Bitcoin could help you. In fact a small or nonexistent processing fee is one of Bitcoin’s biggest strengths as a currency. Off the top of my head, I believe BitPay has services that would suit your needs. And if you’re worried about the volatility of Bitcoin, you can always convert it straight to USD just so you can avoid service fees! I just called the customer service of a real bank, not a money transfer service. It seems that the limit is on the electronic transactions only. If you show up at the bank the limits tend to be huge or do not exist (the bank rep. just told me that he is not aware of a limit in this specific bank). "For some reason can't transfer it directly to his account overseas (something to do with security codes, authorized payees and expired cards). Don't become someone's financial intermediary. Find out exactly why he can't transfer the money himself, and then if you want to help him, solve that problem for him. Helping him fix his issue with his expired card, or whatever the real problem is, would be a good thing to do. Allowing him to involve you in the transaction, would be a bad thing to do.  Possible problems which might be caused by becoming directly involved in the transaction: -The relative is being scammed themselves, and doesn't realize it / doesn't realize the risks, and either wants you to take the risk, or simply thinks there is no risk but needs administrative help. -The person contacting you is not the relative - perhaps they are faking that person's identity, and are using your trust to defraud you. -The person is committing some form of fraud, money laundering, or worse, and is directly trying to defraud you in order to keep their hands clean. -The transaction may be perfectly legal, but is considered taxable in one or more countries. By getting involved, you might face tax filing obligations, or even tax payment obligations. -The transaction may be perfectly legal and legitimate, but might accidentally get picked up as potential fraud by a financial monitoring system, causing the funds to be held, and your account to be flagged for further investigation, creating headaches for you until it becomes resolved. There are possibly other ways that this can go awry, but these are the biggest possibilities I can think of. The only possible 'good' outcome here is that everything goes smoothly, and it works exactly as well as if your relative's ""administrative problems"" were solved first, and the money went through his own account. Handwaving about why your account is needed and his is faulty is a big red flag. If it is truly just an administrative issue on his end, help him fix that issue instead." "Depositum irregulare is a Latin phrase that simply means ""irregular deposit."" It's a concept from ancient Roman contract law that has a very narrow scope and doesn't actually apply to your example. There are two distinct parts to this concept, one dealing with the notion of a deposit and the other with the notion of irregularity. I'll address them both in turn since they're both relevant to the tax issue. I also think that this is an example of the XY problem, since your proposed solution (""give my money to a friend for safekeeping"") isn't the right solution to your actual problem (""how can I keep my money safe""). The currency issue is a complication, but it doesn't change the fact that what you're proposing probably isn't a good solution. The key word in my definition of depositum irregulare is ""contract"". You don't mention a legally binding contract between you and your friend; an oral contract doesn't qualify because in the event of a breach, it's difficult to enforce the agreement. Legally, there isn't any proof of an oral agreement, and emotionally, taking your friend to court might cost you your friendship. I'm not a lawyer, but I would guess that the absence of a contract implies that even though in the eyes of you and your friend, you're giving him the money for ""safekeeping,"" in the eyes of the law, you're simply giving it to him. In the US, you would owe gift taxes on these funds if they're higher than a certain amount. In other words, this isn't really a deposit. It's not like a security deposit, in which the money may be held as collateral in exchange for a service, e.g. not trashing your apartment, or a financial deposit, where the money is held in a regulated financial institution like a bank. This isn't a solution to the problem of keeping your money safe because the lack of a contract means you incur additional risk in the form of legal risk that isn't present in the context of actual deposits. Also, if you don't have an account in the right currency, but your friend does, how are you planning for him to store the money anyway? If you convert your money into his currency, you take on exchange rate risk (unless you hedge, which is another complication). If you don't convert it and simply leave it in his safe, house, car boot, etc. you're still taking on risk because the funds aren't insured in the event of loss.  Furthermore, the money isn't necessarily ""safe"" with your friend even if you ignore all the risks above. Without a written contract, you have little recourse if a) your friend decides to spend the money and not return it, b) your friend runs into financial trouble and creditors make claim to his assets, or c) you get into financial trouble and creditors make claims to your assets. The idea of giving money to another individual for safekeeping during bankruptcy has been tested in US courts and ruled invalid. If you do decide to go ahead with a contract and you do want your money back from your friend eventually, you're in essence loaning him money, and this is a different situation with its own complications. Look at this question and this question before loaning money to a friend. Although this does apply to your situation, it's mostly irrelevant because the ""irregular"" part of the concept of ""irregular deposit"" is a standard feature of currencies and other legal tender. It's part of the fungibility of modern currencies and doesn't have anything to do with taxes if you're only giving your friend physical currency. If you're giving him property, other assets, etc. for ""safekeeping"" it's a different issue entirely, but it's still probably going to be considered a gift or a loan. You're basically correct about what depositum irregulare means, but I think you're overestimating its reach in modern law. In Roman times, it simply refers to a contract in which two parties made an agreement for the depositor to deposit money or goods with the depositee and ""withdraw"" equivalent money or goods sometime in the future. Although this is a feature of the modern deposit banking system, it's one small part alongside contract law, deposit insurance, etc. These other parts add complexity, but they also add security and risk mitigation. Your arrangement with your friend is much simpler, but also much riskier.  And yes, there probably are taxes on what you're proposing because you're basically giving or loaning the money to your friend. Even if you say it's not a loan or a gift, the law may still see it that way. The absence of a contract makes this especially important, because you don't have anything speaking in your favor in the event of a legal dispute besides ""what you meant the money to be."" Furthermore, the money isn't necessarily safe with your friend, and the absence of a contract exacerbates this issue. If you want to keep your money safe, keep it in an account that's covered by deposit insurance. If you don't have an account in that currency, either a) talk to a lawyer who specializes in situation like this and work out a contract, or b) open an account with that currency. As I've stated, I'm not a lawyer, so none of the above should be interpreted as legal advice. That being said, I'll reiterate again that the concept of depositum irregulare is a concept from ancient Roman law. Trying to apply it within a modern legal system without a contract is a potential recipe for disaster. If you need a legal solution to this problem (not that you do; I think what you're looking for is a bank), talk to a lawyer who understands modern law, since ancient Roman law isn't applicable to and won't pass muster in a modern-day court." Disclaimer: it's hard to be definitive as there may be some law or tax rule I'm not aware of. From a UK perspective, this should be perfectly legal. If it's just a one-off or occasional thing for personal reasons, rather than being done in the course of a business, there probably aren't any tax implications. In theory if there's an identifiable profit from the transaction, e.g. because you originally obtained the INR at a lower exchange rate, then you might be liable to capital gains tax. However this is only payable above approximately £10K capital gains (see http://www.hmrc.gov.uk/rates/cgt.htm) so unless this is a very large transaction or you have other gains in the tax year, you don't need to worry about that. I would only recommend doing this if you trust each other. If one side transfers the money and the other doesn't, the international nature will make it quite hard in practice to enforce the agreement legally, even though I think that in theory it should be possible. If the sums involved are large, you may find that the transaction is automatically reported to the authorities by your bank under money laundering regulations, or they may want documentation of the source of the funds/reason for the transaction. This doesn't automatically mean you'll have a problem, but the transaction may receive some scrutiny. I think that reporting typically kicks in when several thousand pounds are involved. "I am not sure about transferwise and how they work, but generally when I had to transfer money across countries, I ended up using a foreign currency/transfer company who needed the destination account details i.e. a GBP account in the UK in your case, and money from the source account. Basically that means your father would need to open an EUR account, probably in an EU country (is this an option?) but may be in the UK is fine too depending on transfer fees. And a GBP account in the UK, perhaps see if there is a better business account than HSBC around, I have used them as well as Santander before. The only FX transaction done in this straightforward set up is the one performed by the specialised company (there are a few) - and their spread (difference between interbank i.e. ""official"" and your price) is likely to be around 1.0 - 1.5%. The other expenses are transfer fees to the FX company account, say a flat fee of $25 for the SWIFT payment. The full amount less the spread above then goes to your UK GBP account. There are still the running costs of both EUR and GBP accounts of course, but here the advice would be just to shop around for offers/free banking periods etc. Point being, given the saving in FX conversion, it might still be a better overall deal than just letting HSBC deal with it all." 1.  this is not the correct sub, try /r/Entrepreneurs or similar 2. Banks only care about 1 thing: collaterals with personal guarantee from the owners/shareholders of the business. Nothing else matters, don't waste your time with a business plan.  (Yes ELI: bank only give money to people who have money). Regardless of UK Money Laundering Laws - All companies have a responsibility under the Data Protection Act to ensure that all data kept is necessary and accurate - and so they can actually ask you to send up-to-date information* in any time period that they deem reasonable to ensure they are compliant with the act. That being said, most payment systems these days are automated and use algorithms to try and find suspicious activity. Using multiple accounts will definitely be a red flag here, unfortunately, the advice to use your previous account will just be seen as yet another account switch by these algorithms and will probably look even more suspicious. The main thing to remember is that ultimately these acts and regulations are there to protect you and your investment, so unless you have any suspicious that you're being asked for documents by a company or individual that you don't trust I would simply send them on and let them do their job. As a side note - make sure you send anything of that nature in a recorded delivery so that you know exactly who handled it and when! * So long as the information is necessary. A non-cash transaction will not be a problem. The bank will have to fill out federal paperwork if there are large amounts of cash involved.  This is to stop the underground economy.  This can even extend to non-banks. If you were to walk into a car dealer or some other stores and hand them a bag  of cash they will also report it. You can do what you propose without having to transfer any money between accounts. Your girlfriend can put the furniture and landscaping on her credit card, or write checks to the stores or companies. Based on the number of questions on this site regarding how to transfer funds between banks and accounts, the mechanics of the transfer is the hard part. Resist the urge to use cash to make the transfer. That will require paperwork. Many people find that the old standard of using checks to transfer funds is easy, safe and quick. Have them contact their embassy for help. They may be able to facilitate the transaction. This answer assumes that this isn't a scam, and that the 'friend' is really in trouble. "If wire transfer through your bank does not work then perhaps one of the more popular money transfer services may be what you are looking for such as MoneyGram or Western Union. Now these rely on a trusted ""registered"" third party to do the money transfer so you need to make sure that you are working with a legitimate broker. Each money transfer service has a site that allows you to perform the search on registered parties around your area. There are certain fees that are sometimes applied due to the amount being transferred. All of these you will want to do some detailed research on before you make the transfer so that you do not get scammed.   I would suggest doing a lot of research and asking people that you trust to recommend a trusted broker.  I have not personally used the services, but doing a quick search brought many options with different competitive conversion rates as well as fees. Good luck."