Treasury Today Country Profiles in association with Citi

Regional checklist

Companies hoping to expand their cash management structures into the Nordic and Baltic region should seek advice from a wide range of sources to bring themselves up-to-date with local practices and any regulatory changes. Aside from banks, treasury consultants and legal firms, people who have experience of operating in the area can be very useful sources of information and the advice of other treasurers working in the Nordic-Baltic region can be invaluable.

There are many areas which will need to be researched thoroughly and the list below details some of the more significant considerations.

Banks

Some considerations for choosing between banks were discussed in Section 2 and 3. Here, however, we delve a little deeper into some of the questions that treasurers may want to research when choosing a bank or banks in the Nordic-Baltic region:

  • Which banks operate in the same countries as your company and what is their market capitalisation?

  • How many branches do they have in how many countries and are they conveniently located for your business units? Are these full branches or just representative offices?

  • What are their credit ratings?

  • Do they own or are they owned by other regional or global banks?

  • Are they allied to another European bank or a member of a banking club?

  • Are they affiliated to one of your relationship banks?

  • What services do they offer and are they offered directly or through a third party?

  • Are pan-regional cash pooling structures available and what fees are involved? Be aware of different terminology surrounding cash pooling used by different countries.

  • Is the bank a direct member of the local clearing systems?

  • Does the bank offer investment products that meet your company’s requirements?

  • How innovative is the bank?

  • Does the e-banking system offer solutions that cater for your company’s needs?

  • Does the bank have good relationships with the regulatory bodies in the region?

  • What customer support is available and in which languages?

Bank accounts

  • What documentation is needed to open an account?

  • In which languages do the banks accept documentation? Must translations be notarised?

  • What types of bank account are available?

  • Is interest payable and if so, at what rate?

  • What are the charges for overdrafts?

  • Are foreign currency accounts available?

  • Are all accounts convertible?

Payment systems

Information on the different payment systems in use in each country is provided in Section 4 of this Handbook. However, it is also important to consider the following:

  • What systems does the company need to make payments?

  • How does the company access the bank’s system?

  • Is information input directly or via the bank?

  • Who bears the cost in the event of an error?

  • When do companies receive value on incoming payments and lose value on outgoing payments?

Tax

Although some of these questions are answered in Section 4 of this Handbook, rates and laws can and do vary over time, so it is always good practice to double check what may have changed.

  • What level of corporation tax will apply?

  • How is tax residency determined?

  • What level of sales tax and value-added tax will apply?

  • Is withholding tax applied and, if so, at what rate?

  • What are the transfer pricing rules? Do companies have to document their transactions?

  • Do any thin capitalisation rules apply? Do these relationships have to be documented?

Regulations and reporting

  • Are there restrictions on the movement of funds between group entities, across borders, or between a resident and non-resident account?

  • Are there restrictions on the payment of interest?

  • Must transactions be reported to the central bank? If so, who is responsible for reporting the transaction?

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