Sending money between bank accounts in different countries

External question — Personal Finance Stack Exchange Author: user19904 Original post: https://money.stackexchange.com/questions/165727 License: CC BY-SA 4.0 — https://creativecommons.org/licenses/by-sa/4.0/ Adaptation: HTML converted to plain text; contact email addresses removed. I know quite a few people who have bank accounts in two different countries (let's say, USA and France) and transfer money between them depending on the Euro/USD rates, to make gains. So for example, they'll send $20,000 to France when the rate for USD is strong and then send it back again a few months later once the rate has changed, making profit. This in a sense feels like currency trading but with reduced risk, because these people have financial commitments in both countries. So, if the money 'got stuck' in France because the exchange rate hasn't moved favourably, it isn't a big concern. I have considered doing something similar myself, as I also have bank accounts in two countries. What are the legal implications of this? Is this a completely fair and legal way to make money?

External answer — Personal Finance Stack Exchange Author: glglgl Original post: https://money.stackexchange.com/a/165730 License: CC BY-SA 4.0 — https://creativecommons.org/licenses/by-sa/4.0/ Adaptation: HTML converted to plain text; contact email addresses removed. I do similar things, but not by transferring money over boundaries, but by exchanging money depending on the exchange rate. I have an account with Wise, and from time to time I exchange EUR to USD whenever I seem the rate is good, so that I have money to pay my AWS bill. I do that only with small amounts, but I don't see any problems with that.

External answer — Personal Finance Stack Exchange Author: AKdemy Original post: https://money.stackexchange.com/a/165740 License: CC BY-SA 4.0 — https://creativecommons.org/licenses/by-sa/4.0/ Adaptation: HTML converted to plain text; contact email addresses removed. Kenneth Rogoff and Richard Meese received an incredulous reaction to their now-famous paper showing that random-walk (RW) forecasts outperform economic models of exchange rates. Reactions were along the line of “You just cannot possibly have done it right” or "the results are obviously garbage". Turned out they were correct. Rogoff makes an interesting point in some later paper. If money supplies are hard to predict, then one should not blame the models if exchange rates are hard to predict. It is unforeseen news that matters. However, as Rogoff further stated , their finding was even more extreme. They tested predicting the exchange rate in one year, given the information about what money supplies, interest rates, and outputs are going to be in one year. However, even in this case, no economic model beat(s) the RW. In layman terms, a RW forecast means that the best forecast is yesterday's value. If you know people who claim to make money by converting back and forth between EUR and USD, they are either lying or just lucky for a while or miscalculating their actual returns. On top of that, if you do this as a retail person, you will pay substantial fees (or bid ask spreads) every time you convert from one to the other. https://quant.stackexchange.com/a/67940/54838 offers a comprehensive summary of theories and FX puzzles. Finally, legal and tax implications will be something you best discuss with an accountant or lawyer in your jurisdiction.

External answer — Personal Finance Stack Exchange Author: Kate Gregory Original post: https://money.stackexchange.com/a/169139 License: CC BY-SA 4.0 — https://creativecommons.org/licenses/by-sa/4.0/ Adaptation: HTML converted to plain text; contact email addresses removed. A data point, from some years ago. A family member had companies and accounts in several countries. One company borrowed some US dollars from another. Later, when they paid it back, due to exchange rate changes, it cost far less to pay it back than had been received in the local currency when borrowing it. He asked his accountant what to do about that and the answer was nothing. It wasn't income. Yes, he had more money in the local account after borrowing and repaying, but it wasn't income. If the agreement between the companies had been to borrow and then repay a certain amount of local currency, then the US company would have been the one needing advice and would probably get the same advice. I think the key thing is whether you are only moving the money back and forth as a form of arbitrage, or whether you are doing it for some other reasons (my Country 1 client paid me, and I need the money in Country 2 to cover my salary). Or my Country 1 client paid me, and I don't need the money, so I'm going to leave it there until the exchange rate improves a bit. That's fine. Also if you have other income (you're doing consulting for clients, you're selling a product, you have a job) or are just managing investments by moving them around. If this is all a sort of bingo that occasionally happens, it will likely not attract attention. If you're trying to make it your job, then two things will happen: between the fees and the vagaries of foreign exchange, you probably won't make a reliable income stream that justifies your time and effort, and you're more likely to find yourself needing to pay taxes or otherwise attracting the attention of authorities.