Hacker News Board Hacker News, browsed like a classic message board
Live data from Hacker News

Saving money on international payments as a remote freelancer

blog.jurn.io

Post reply on HN
Print view View original

21–30 of 256 posts

Re: Saving money on international payments as a remote freelancer

#21

Post by EastSmith »

I am receiving SWIFT payments each months in EU as a commercial entity. I am invoicing in USD, providing a bank account number, where the money I receive are automatically converted to the local currency (not EUR).

Just checked the exchange rate on TransferWise and it seems it is way better than any bank exchange rate in my country (not EUR).

So, what I am concerned about right now is taxes. It seems I can create an USD bank account in US on the name of my company for free. Then I can invoice my customers in USD (as I currently do) and tell them to pay the invoice to the US bank account in TransferWise. Then I transfer the USD to my local bank account (in local currency, using TransferWise exchange rate). So far so good.

But what about my USD bank account in US - wouldn't I need to pay taxes for my USD income in a US bank account?

Re: Saving money on international payments as a remote freelancer

#22

Post by mft_ »

emdowling wrote: post #6

I’m a former TransferWise employee and I cannot speak more highly of them. Yes, they aim to make money like every business, but I’ve never seen a company so focused on transparency to customers. The CEO intensely interrogates roadmaps from the customer perspective, and fairness to customers is non-negotiable. Their economy of scale enables them to offer increasingly lower fees, but I can speak first hand to the pain…

Are you able to offer any insight (top level, non-confidential, obvs) into how TransferWise works, behind-the-scenes?

i.e. how do they actually enact the exchange of the funds? Do they have a contract with one of the big investment banks? Do they work directly via Forex markets? Can they leverage their scale now to minimise actual exchange costs – for example internally matching up (say) a one customer transferring USD to EUR, and another transferring EUR to USD, so that TW’s costs are minimised?

Re: Saving money on international payments as a remote freelancer

#24

Post by raverbashing »

mft_ wrote: post #22
emdowling wrote: post #6

I’m a former TransferWise employee and I cannot speak more highly of them. Yes, they aim to make money like every business, but I’ve never seen a company so focused on transparency to customers. The CEO intensely interrogates roadmaps from the customer perspective, and fairness to customers is non-negotiable. Their economy of scale enables them to offer increasingly lower fees, but I can speak first hand to the pain…

Are you able to offer any insight (top level, non-confidential, obvs) into how TransferWise works, behind-the-scenes? i.e. how do they actually enact the exchange of the funds? Do they have a contract with one of the big investment banks? Do they work directly via Forex markets? Can they leverage their scale now to minimise actual exchange costs – for example internally matching up (say) a one customer transferring U…

> for example internally matching up (say) a one customer transferring USD to EUR, and another transferring EUR to USD, so that TW’s costs are minimised?

From what I've read, apparently that was their idea since inception, do their own reconciliation as far as they can.

Re: Saving money on international payments as a remote freelancer

#26

Post by noelwelsh »

EastSmith wrote: post #21

I am receiving SWIFT payments each months in EU as a commercial entity. I am invoicing in USD, providing a bank account number, where the money I receive are automatically converted to the local currency (not EUR). Just checked the exchange rate on TransferWise and it seems it is way better than any bank exchange rate in my country (not EUR). So, what I am concerned about right now is taxes. It seems I can create an…

If you don't pay tax now it is my understanding you shouldn't pay tax after changing to Transferwise. The general rule is that tax is paid in the country where the work is carried out.

If you have doubts you should ask an accountant, rather than randoms on HN.

Re: Saving money on international payments as a remote freelancer

#27

Post by andrewnicolalde »

emdowling wrote: post #6

I’m a former TransferWise employee and I cannot speak more highly of them. Yes, they aim to make money like every business, but I’ve never seen a company so focused on transparency to customers. The CEO intensely interrogates roadmaps from the customer perspective, and fairness to customers is non-negotiable. Their economy of scale enables them to offer increasingly lower fees, but I can speak first hand to the pain…

That's great to hear. I regularly use Transferwise and have always been happy with the service they provide.

Re: Saving money on international payments as a remote freelancer

#28

Post by msadowski »

unnouinceput wrote: post #15
msadowski wrote: post #8

I was looking into this when I started freelancing on UpWork. I found that the best option for me was to have an US ACH account through TransferWise, otherwise I was looking at either high transfer fees, currency conversion fees or all of the above + a rate that is far off from the market rate. With the current setup the only cost I have are the TransferWise fees for USD to EUR conversion when I send the money to my…

You "lose" thousands of dollars per year on Upwork no matter what you do. But this is a non-issue in the end, am I right? That's why I used quotation, because I prefer having this loss on a high volume of work rather than work for pennies in my country and saving transaction fees. In the end I don't care about these fees, it's the world we're living in and I prefer to have fun with my projects instead.

Instead of "loss" I consider it a service price for discoverability and the payment guarantees for hourly projects.

I also don't mind paying since so far it's been the best method to get projects for me so far.

Re: Saving money on international payments as a remote freelancer

#29

Post by carlob »

I have an account with an Italian bank that offers multicurrency accounts (EUR, USD, CHF, GBP + others not activated by default). If I change 1000 EUR to USD now I get 1089.90 USD, if I try to change 1089.90 USD to EUR I get 993.80 EUR, so it seems the spread is less than 10 base points, which seems to be pretty much in line with Transferwise.

Also, given that I actually have a part of my account in USD that means I can wait and change money when I need it rather than when I invoice.

Post reply on HN