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Topic # 11257 11-Jan-2007 23:32
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hopefully someone can help me on this!

I work for someone who has a NZ business and is setting up agents/franchises in Australia.
The agents basically sell the companies products and then pay on invoice. The product itself is manufactured in europe and then sent to NZ where its forwarded to australia.

The company want to know the easiest way to manage payments and invoices in a situation like this. They were thinking of opening a Foreign Currency Account, as this supposedly allows easier deposits and withdrawals where foreign currency bills are involved. They would also be wanting paying their supplier in Europe out of this FCA account to avoid having to pay exchange rate twice.

Does anyone know how this works? Is this the best way to do it?  Or would they have to set up an a/c in australia and register for GST and income tax and etc.
The agents would not be paying any Australian GST content on the NZ companies invoices.

Any ideas or suggestions?

Thanks


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BDFL - Memuneh
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Reply # 57689 12-Jan-2007 05:39
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Thsi si the kind of topic where you should get help from an accountant or a company that specialises in foreign investments. Anything you read on an on-line forum on these matters can be just pointing in the wrong directions and cause great losses if wrong.







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  Reply # 57694 12-Jan-2007 07:43
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yeah i just though id try, as youd never know who might know something, tried the banks and they all were unhelpful, even our own bank told us to look online Surprised

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  Reply # 57710 12-Jan-2007 12:50
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Any ideas or suggestions?

Hi Ross,

Are you related to the Colebrookes in Whangarei by any chance?

I am related to them...


Anyway, in our business we have used Offshore FCAs for several years, and have also dealt with the issues of collecting payments from Australian customers.


Your idea of setting up an Australian FCA is a good one because it will avoid transferring those funds back to NZ$.  Also, your Australian customers can pay directly into that account via any branch of the Australian bank concerned.  For example, we use ASB and they are owned by CBA, so Australian customers can make deposits at any branch of the CBA.


Secondly, on the issue of GST:


When you export goods directly overseas, you don't add any NZ GST.  However, the recipient will have to pay GST to Australian Customs when they uplift the goods, so the net effect is the same.

Thirdly, on the issue of paying suppliers in Euros:

You will need to sell AU$ and buy Euros out of your FCA.  Hopefully this will work out better than bringing the funds back to NZ and then buying Euros.

I hope that helps.

Cheers,
Grant.


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Reply # 57713 12-Jan-2007 13:03
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You could also use a 3rd party to make your forex payments... I recommend Elldridge Lynch https://www.elynchfx.com/Entry/default.aspx  as I used them extensively when I was in the UK and back here when transferring money back from UK.  You pay into a local bank account (in Oz for example) and they will pay your beneficiary in the country you specify...

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