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U.S. bank account for a non-resident of the U.S.

edited December 2011 in Off-Topic
Dear friends,

A Trinidadian friend who has been helping behind the scenes with MFO is looking for a bit of guidance. He's resident in Trinidad, thinking about spending an extended period in England, writing for a Canadian firm which wants to pay him in US dollars through an American PayPal account. It all seems remarkably global to me. Give or take my curiosity about the underlying arrangement, since he presumably gets dinked 3% or whatever in PayPal fees (they transfer $100, he gets $97), he's trying to figure out how to access the money.

His thought was that he'd need to establish a US bank account or perhaps a US brokerage account (say Scottrade), into which his PayPal money might be moved. He found one site that promises to set up US accounts for non-US residents but, having read the site, I'm deeply skeptical. Deeply.

Any guidance for the wise and global about how to work through this challenge? I'll go check Scottrade (my brokerage) as soon as I can, but it's all new to me and I'd hate to misguide any friend.

Take care and thanks!



  • I've wondered about stuff like this many times, with an eye on the day when I will want to keep my money invested in USA mutual funds but withdraw dividends in Filipino pesos, living over there. Hmmmmm.

    First of all, PayPal: I don't trust them, though it has been a number of years since they were brought up short for being careless with people's money. I forget the details. Steer him clear of that outfit which promises to create USA accounts for non-USA residents. Which Canadian firm is it? I just hope this fellow from Trinidad is not chasing a great many "what ifs."

    The PayPal account could conceivably be accessed from anywhere, eh? If he will physically be in England for an extended period, I'd say even though he gets paid in US dollars, it will be much more practical if he opens an account or two in Britain. There may be no way around a service charge, but the bank might be more kind if he keeps a minimum balance on hand, on deposit. Wifey and I had been keeping some money for vacation spending in a bank in The Phils. But when we discovered they were eating away about 3 or 5 percent every month because we were not keeping X amount on deposit with them, we arranged to withdraw the whole stash.

    Does he have a personal contact already in England? They could start up a joint account with the understanding that it is really his. The other individual will just leave it alone. But the first name on the account will be liable to report interest on his/her annual tax return, I expect.
  • If he had a bank account here the money could be transferred right into the account without involving paypal. My bank has a number to call for international services, they should be able to answer questions. I don't know if your friend qualifies for a US bank account but they would know. TD Bank 888-264-4685
  • It all sounds a bit fishy to me. Why would a Canadian company want to pay in US dollars through paypal, so that he could receive the money while living in England? That means that the money would be exchange twice, first to US dollars, then to Pounds. Not to mention the paypal fees. He would loose quite a bit of money before he could even get a it.

    Being that Canada and England are both in the Commonwealth, I'm sure that it would be easier just to transfer money directly from Canada to England, which is why I don't understand the point of sending it through the US. I would try and have the company transfer the money directly to England. If they can't I would want to know why not.
  • I write this from the perspective of using PayPal associated with Ebay; as I have been a seller/buyer via eBay since 1997.
    eBay's purchase of PayPal was to facilitate global transactions, offering better protection of dispute resolution between sellers and buyers; and of course, as a very convenient transaction method that has become accepted globally, at least among those using eBay. It is also my understanding, that at least in some small amounts, PayPal continues to attempt to be a payment method in lieu of Visa, Master Card, Western Union, etc.
    In regards to PayPal, folks who sell/buy via eBay and PayPal do have to qualify to have an account; but one will find account holders from many different countries. Not sure about the qualifier for/with PayPal; but the PayPal web site will detatil this.

    Max, I am not sure about whether you are directing your note about PayPal; that is perhaps related to the pre-eBay days.

    In this age of electronic transfers of monies into and from any bank account; I don't follow why a firm from Canada would want to use PayPal as the go between vendor, aside from any fact that it may be of benefit to that firm for a tax advantage or otherwise.

    My limited 2 cents worth.


  • So far the best idea I've heard is to have the Canadian firm open a (joint) account with your friend in England.
  • Reply to @Mark:


    I think that Soupkitchen is right on the spot.

    If he's a tax resident of Trinidad, then he needs to declare his foreign income there on his tax statement. Tax authorities normally require that you provide proof of where your income came from. If this is legally earned income, then at the end of the year he would normally have an income declaration from the Canadian firm that he can use in his Trinidad income tax statement (even if they paid in USD, which doesn't matter). This statement would not say what he was paid in Trinidad dollars--only what he was paid in USD. He would report this income on his Trinidad tax statement using the USD-TTD exchange rate that the government requires.

    As for spending his money in the UK while he's living there, presumably his Trinidad bank issues a Visa or Mastercard which he can use in the UK to draw money from ATMs. If that bank doesn't, then he might consider changing to a global British bank with offices in Trinidad (e.g., HSBC, Barclay's, and maybe even Canadian banks such as RBC or TD). If he's going to be in the UK for an extended period, his Trinidad bank will undoubtedly have a partner bank in the UK where he can more easily open a current/checking account, and he may be able to transfer money there at a somewhat more favorable exchange rate.

    Every time you change money, there will be a fee. That's unavoidable.

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