Among the many smart business accounting practices that can help your business is that of using an off shore merchant account for your credit card processing needs. These offshore accounts are completely legal and can help your business save money. They also provide service levels comparable or often even better than their on shore counterparts.
In the present day context credit card processing ability is almost a necessity for big and small businesses alike. Most people prefer to pay with credit or debit cards. The practice of paying by check or cash is fast disappearing. In this scenario, it is important to have the ability to process credit and debit cards. It allows you to serve a wider range of customers.
In order to ensure that the money paid by credit or debit cards is properly transferred from the customers' accounts into your account you will need to open a merchant account. Merchant accounts are similar to any other bank account, but should be kept separate as business accounts for accounting purposes.
You can open a merchant account with one of many companies in the United States. But you could also look at offshore accounts available in countries in Central America, Europe and the Caribbean. An off shore merchant account can help you save money in many ways with respect to your debit and credit card transactions.
If your account is located off shore, often it counts as foreign income. Foreign income, thought taxed, is taxed at a different rate than domestic income. Consult with your accountant or a tax attorney to settle the accounting necessities attending this option. At any rate, if you choose to open an off shore merchant account, you can send less of your money to Uncle Sam.
The other way that you will save money is on security fees and upfront costs. You will have to block quite a bit of money to open an on shore merchant account, as many of these companies ask for hefty initial deposits for security reasons. Many banks also keep back a certain amount of your money each month, over and above the original security amount to cover charge backs. Usually, off shore accounts offer comparatively lower initial deposits and hold amounts for charge backs.
However, off shore accounts charge higher transaction fees but the differential is much less than what you would save in taxes. The added advantage is that they provide very good service in their endeavor to attract and hold their clients.
Whether or not you go in for it, it is a good idea to explore the option of off shore merchant accounts. If it works for you it may well be one of the best accounting moves you can make for your business.
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