Payment Processing for Offshore Companies

So you set up a business and you’re ready to start selling your products or services… but you’ve hit a snag. How will you setup payment processing?

This is often an overlooked aspect of business requirements when entrepreneurs set up a company. 

Knowing how you will accept payments is critical to your business and one of the first (and most important) things that you should be figuring out.

Where your business is structured, the products or services you’re selling, and where your customers are based, are all things that will impact which banking and payment processing options are available to you.

For a lot of startups and small businesses, simply having a bank account where clients can transfer funds will be sufficient. But if you plan on selling products or services online, that’s not enough.

But in this article, we’ll dive into the details of setting up payment processing for an international company and get you on your way to accepting payments right now. 

Some readers might be wondering why it’s so difficult to setup payment processors? For international companies (particularly those from offshore jurisdictions) and high-risk businesses, finding and setting up a payment processor can be a real challenge. 

Likewise, fees can be extortionate. Chargebacks over a certain threshold are a concern, and account closures are common. Not to mention, just getting your foot in the door can be difficult.

So if you have an international or high-risk business and you’re struggling to find the right payment processing solution, read on and we’ll help you navigate the options below.

Why Payment Processors Won’t Accept You

Let’s start by first explaining why most international businesses struggle to open payment processing accounts.

Payment processors only accept companies registered in certain countries. If your company isn’t registered in the “right” country, the payment processor can’t service you and you’re out of luck. 

That’s often the case for offshore companies. Or, if you incorporated in a jurisdiction that payment processors consider “high-risk” or happens to be on a grey or black list, you may also have problems. 

In addition, businesses in high-risk industries may also find themselves shunned by payment processors. Think: crypto, physical products, pharmaceuticals, cannabis, gambling, adult entertainment, or businesses that traditionally have a high percentage of chargebacks. 

So, if you incorporated in the wrong country or have a high-risk business and find yourself being shunned by payment processors, what can you do?

How to Setup Payment Processing for Offshore Companies

Having the wrong structure from the get-go can be devastating for your business. It can result in getting you banned from the world’s best, most cost-effective payment processing solutions.

If this is the situation you’re in, you have a few options available to you: 

  1. Find a payment processor that caters to offshore companies
  2. Find a payment processor that caters to high-risk businesses
  3. Setup a payment processing subsidiary in a favorable jurisdiction
  4. Scrap your current structure and setup a new company altogether 

Payment processing that caters to offshore companies

payment processing offshore

If you’re hell-bent on keeping your current company structure and you have no interest in forming a new company for payment processing purposes, then it’s time to start looking for a payment processor that will work for you.

At present, GlobalBanks analysts monitor 115 payment processors globally, all of which offer solutions that are generally based on three criteria: industry, country of registration, type of, transaction volume, and beneficial owner

While we don’t currently provide access to our payment processor database, that will be coming in the near future, and for now our analysts are happy to help members find payment processors that work best for them. 

If you’re not yet a member of GlobalBanks Insider and would like to take a stab at finding a payment processor yourself, you should start your search with 2CheckOut, Bluesnap, Square, and Stripe.

2Checkout in particular is an interesting solution, it caters to high-risk merchants, small businesses, and offshore companies. And while most comparable payment processors often charge extortionate fees, 2Checkout is comparable to PayPal and also allows you to accept PayPal for payments without opening a PayPal account. As for whether or not your country of registration is on the list, at the time of writing 2Checkout accepts companies from 196 countries, so you should be covered.

In an upcoming premium report for GlobalBanks Insiders, we’ll discuss the best payment processing options out there, new trends and restrictions, and actionable processing hacks for different companies structures, industries, and jurisdictions.

Payment processing that caters to high-risk businesses

payment processing amazon

What if you have a high-risk business? Step one is to look for payment processors that already cater to similar businesses or have a history of servicing high-risk businesses in general. This will give you an initial sense of how many options are available, how expensive they will be, and how difficult they will be to open.

For example, if you’re operating an Amazon FBA or ecommerce business with a company registered in Panama or Mauritius, what payment processors are your competitors (or similar companies) already using? 

Sometimes you might even find that there are in-country options that are familiar with your business model and know how to properly assess your risk profile. In other words, if your Panama company is selling products online you might find that a Panama payment processor is the best choice – yes, they exist.

Similarly, if you have an adult entertainment, cannabis, or gambling site, you should start by trying to determine which payment processors accept businesses from this category – though in our experience, these businesses tend to be tight lipped when it comes to their banking stack so to not jeopardize their existing banking and payment processing relationships.

And before jumping to the conclusion that these issues only impacts small businesses, keep in mind that Porhub, the largest adult entertainment site in the world, was abruptly cut off from PayPal just last week. As a result, Pornhub said they’ll be adding more payment processing options that are “sex worker friendly” while also considering cryptocurrency options.

Bottomline, regardless of your industry, by looking at the payment processors that other high-risk businesses use you’ll be able to find processors with a higher-tolerance for high-risk businesses.

And if you’re still wondering how to get started, you can become a GlobalBanks Insider for only $197 and start speaking with our analysts right now.

Setup a payment processing subsidiary in a favorable jurisdiction

payment processing united kingdom

If you don’t want to explore alternative payment processors and you’re not ready to completely change your company structure, it might be time to consider a payment processing subsidiary.

In a nutshell, this means setting up a new company in a jurisdiction that has easy access to the payment processing options you’re interested in.

This can either be a direct subsidiary of your current company or a new company that simply re-sells your current company’s current products and services.

Examples of countries and structures that would provide access to good payment processing options include a UK LLP, a US LLC, a Canadian LLP, or similar pass through entities.

As always, before setting up a company, opening a bank account, and establishing a payment processing relationship, you need to do your homework and speak with your own tax advisors to assess how this new structure could impact your personal situation

Many entrepreneurs with companies in foreign countries have started opting for this strategy because it allows them to retain profits in a tax efficient jurisdiction, while having first-world payment processing.

In short, form new company to solve your payment processing problems instead of restructuring your entire business.

Obviously, the specific corporate structures you choose will depend on your business, personal preferences and tax situation. We’ll discuss this more in our upcoming GlobalBanks Insider report.

Scrap your current structure and setup a new company altogether

If you’re not happy with any of the above options, you can always scrap your current structure and completely start over. Depending on your objectives, products, and the related tax implications for you and your company, this could be a good option… though in most instances it’s not required. 

Before scrapping your current structure, no matter how desperate the situation might appear, hit the chat button below and speak with one of our GlobalBanks analysts, they’d be happy to help you quickly determine if there are any viable options available before you go through the expensive process of closing and setting up a new corporate structure.

What Does This Mean For You?

Processing payments from your customers is critical to any business. And, not thinking about this aspect of your banking stack from the outset is a big mistake, especially if you’re operating an offshore company or a high-risk business. 

In a future article, we’ll discuss payouts – how to get your money from your payment processor into your bank account. Again, if you’re operating offshore or a high-risk business, it’s not as easy as you might think.

We’ll cover this topic in much more detail in our upcoming premium report on payment processing. GlobalBanks Insiders will be able to find it in the Intelligence Reports section of the members area. And in the coming months, we’ll also be adding payment processors to our database, along with first-hand experiences and detailed options for your jurisdiction.

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