13 Comments on "How to Maintain a Transit Account"

  1. Streber,

    With an off shore merchant accout it should seem odd to the bank to hold a zero balance per se?


    • Not at all. Merchants rarely actually hold their money with the acquirer (“merchant account bank”, which needn’t actually be a bank). Settlements are often wired directly to a different bank or just pushed through a zero-balance account to keep the card schemes happy.

      If an acquirer tries to force the merchant to hold funds with them, I stop the negotiations right then and there.

  2. Thanks for this informative post Streber. I found the post really helpful with my queries related to SAR and the manner it follows. Also, I’m very impressed with the way it describes or rather suggests ideas for a secured relationship with banks and an advice to keep the account healthy.

  3. Thank you for the insight. I agree, any bank this creative is possibly one of the best!

  4. Is a term deposit with FBME let us say, a safe or recommended. I read term deposits are safe if FDI guaranteed etc.

    Any ideas?

    • Cyprus insures deposits up to 100,000 EUR per bank per person and FBME itself is financially sound. I can’t tell you what safe or isn’t or give recommendations (that’s for you to assess based on your own risk appetite), but I don’t lose any sleep over the money I have sitting with FBME.

      • Thank you for that input. Based on your personal feeling, it sounds like whether one has funds in Tanzania (FBME) or Cyprus — they should be just as safe, correct? I struggle to open an account in Cyprus due to the recent crises and Tanzania just on the basis of it not being much a financial centre.

        • Well, you should always consider the risks and pros and cons of any bank anywhere. However, FBME is a bank I’ve worked with a long time and they have always provided top notch service. While a privately held company with no public financials, I have seen parts of their balance sheets and it’s quite impressive. It comes at a price, though, with fees being higher than most other Cypriot banks.

          I can’t straight up tell you it’s a safe or not, as that might be construed as financial advice and not something I can offer through this blog.

          During the lockdown in Cyprus, some VIP clients were able to use money that was technically in Cyprus through their Tanzanian branch. If you had a million sitting in Cyprus that you needed to wire out, you could wire them out from Tanzania instead. I’m not aware of any Cypriot bank that did that. It’s possible some of the other more – shall we say – creative banks did it as well.

  5. I’ll be holidaying in Turkey in 6 weeks time. Can you recommend a bank there that will allow me (a tourist) to open a bank account? Is Turkey banking any good? What paperwork is needed?

    • With regards to paperwork, as mentioned above, you will need a Turkish tax ID which most banks will help you with. In addition to that, your passport is usually all you need for a personal account. For corporate accounts, it varies depending on type of company, location, and the bank’s own policies.

      In either case, I’d suggest speaking to banks in advance and get confirmation. I have so far never heard of a bank in Turkey that won’t open an account for non-residents, so finding a bank is basically just a matter of picking one that looks good to you. Maybe some smaller, local banks don’t accept non-residents.

      It’s not in the nature of the blog to make recommendations. That said, my favourite banks in Turkey are İş Bankası and Finansbank, both listed in The Best Offshore Banks 2013.

      Banking services in Turkey are generally of high quality. Naturally, the bigger banks will have more advanced services than the smaller ones. As always when banking in a country like Turkey (or really any country in the world), examine the risks and stability of the bank and country closely.

      Hope you have a pleasant stay in Turkey!

  6. Hi Streber,

    thanks for the interesting post. This is exactly what I am looking to do. I do have a problem though and I would highly appreciate any help again 🙂

    I receice payments from clients from the EU that demand an iban for transfering money to me. To open an account in the EU is no option for me. Do you have any idea how I could receive payments without having an account in the EU? I know there are a some countries outside of the EU that offer ibans but most of them are no option either. Do you know any other way to offer my clients an iban?

    Thank you so much,

    • Hi Jule,

      Thanks for your comment! Glad you enjoyed this post.

      There is unfortunately no practical way to get an IBAN in a country that hasn’t adopted it. It’s theoretically possible to get an IBAN but the recipient bank will have no idea what to do with the transaction and reject it, if they even see it at all.

      These days, there are quite a lot of non-EU countries that have adopted IBAN. You can see a full list here: http://www.swift.com/dsp/resources/documents/IBAN_Registry.pdf

      Some noteworthy examples of jurisdictions in that list which (for better or worse) tend to not ask a lot of questions would be Azerbaijan, Moldova, Turkey, and Israel. You will have to visit the country in person, which probably makes Turkey the most attractive. Opening an account there is a breeze. You will need a local tax ID but if you make arrangements in advance, the bank can help you with it.

      Best of luck!

Leave a comment

Skip to toolbar