Woalet

Trade Remittance

A cross-border transfer that settles a commercial obligation - a supplier invoice, contractor fee or intercompany payment.

Full Explanation

In a business context, a remittance is the transfer of funds to settle a commercial obligation across borders: paying an overseas supplier, a foreign subsidiary or an offshore service provider. Trade remittances travel the same corridors as consumer transfers but carry different requirements. Ticket sizes are far larger, volumes are recurring and predictable, and each payment must be supported by documentation - a commercial invoice, a contract or purchase order, customs paperwork, and in several jurisdictions a certificate of inward remittance for the receiving party. Because amounts are large, the FX margin applied to the conversion usually costs more than the transfer fee itself.

Related Terms

Cross-Border Payment

A financial transaction that involves transferring money from one country to another, across international borders.

Wire Transfer

An electronic method of transferring money directly from one bank account to another, usually internationally.

Foreign Exchange (FX)

The global market where currencies are traded. Also the rate at which one currency can be exchanged for another.

Frequently Asked Questions

What is a typical B2B trade remittance size?

Commonly $5,000 to $500,000 per invoice. At that scale FX margin matters far more than per-transaction fees.

How often do businesses send trade remittances?

Usually tied to invoice terms - on shipment, on delivery, or Net 30/60/90. High-volume importers batch weekly or monthly.

Are trade remittances taxed?

Not taxed as transfers, but they carry VAT or GST, withholding tax and transfer pricing implications depending on jurisdiction.

What do trade remittances cost?

A SWIFT wire runs $30-50 in fees plus a 3-5% bank FX markup. Local rail settlement with negotiated FX brings that down to 0.3-0.8%.