Paying a foreign company against their invoice?

[bobdxcool]

Hi. If a US based company wants to pay money to a foreign company for their services, can the US company transfer money (against the foreign company invoice) to an individual's local bank account in USA ? (Individual from foreign company, currently not residing in USA, but in foreign country) Are there are any taxes to be paid by the foreign company for getting funds to a local bank ?

[Freelancier]

Uhh.... what?!? You can just wire the money to the foreign company as payment. Done all the time. I just had the reverse happen yesterday, foreign corporation wired money into my business account.

When you involve individuals handling the money that should be a simple transaction, red lights should be going off in your head.

[bobdxcool]

Uhh.... what?!? You can just wire the money to the foreign company as payment. Done all the time. I just had the reverse happen yesterday, foreign corporation wired money into my business account.

When you involve individuals handling the money that should be a simple transaction, red lights should be going off in your head.


Thank you. So a representative from the foreign company who has a bank account in USA, can be transferred the money to his USA bank account, right ? Are there any tax implications if the money is not wired to the foreign company's bank account in India and instead to an individual's (from the foreign company) bank account in USA ?

[Freelancier]

So a representative from the foreign company who has a bank account in USA, can be transferred the money to his USA bank account, right ? Are there any tax implications if the money is not wired to the foreign company's bank account in India and instead to an individual's (from the foreign company) bank account in USA ?You are paying a vendor bill/invoice. That's your proof of expense; the wire transfer or check is proof of payment for that expense. Pay the invoice where it says to send the money. And, no, a local sales rep's personal bank account isn't always the same thing as the company's bank account.

Either way, make sure you have a trail that shows the bill and the payment toward it going to the company who sent you the bill.

[nealrm]

Something doesn't smell right here. When I start hearing foreign company, transfer funds into a individual's private account and third party payment warning bell ring. Why can't the company in India be paid directly? If he is a representative of the company, why is he using his personal account to accept payments? Did the company tell you directly to pay him, instead of paying them directly?

Here is an easy reason why not to do this:
You buy services from the company in India? You pay a "representative" by transferring funds into a private bank account. The "representative" then disappears. The company then states the person was not a "representative" of the company and they have no idea who he is. The company then demand payment again. You do not have anything showing you paid the company because the wire transfer went to a individuals account.

[smallbizfinancier]

Many smaller INTL companies have foreign nationals living stateside that can accept payments on behalf of US customers looking to pay invoices for foreign goods. I've seen this in the wine barrel industry, where french cask companies have reps in the Bay Area.

[nealrm]

Many smaller INTL companies have foreign nationals living stateside that can accept payments on behalf of US customers looking to pay invoices for foreign goods. I've seen this in the wine barrel industry, where french cask companies have reps in the Bay Area.
There is a difference between accepting payments and having the money deposited in a personal account. With all the different forms of electronic payment, there really is no reason not to pay the company directly.