Foreign Archives - GUJRAT INDIA

Understanding The Foreign Exchange Market

With the world increasingly becoming a global village, more and more people are travelling and doing business in different parts of the world. Under such circumstances, it is crucial that you have a local currency of the country you are visiting to aid in your travel. Traditionally, travelers have been buying and selling currencies to aid in their travel and business through banks. These banks set particular rates and sell currencies to those in need. However, during the late 1970s, this trend changed and traders began adopting what is now referred to as the foreign exchange market.

The foreign exchange market is also referred to as the currency or forex market. In simple terms, this is where currencies are traded. This is the largest market in the world with a turn over of 1.3 trillion dollars per day. What began as inter-bank exchange has now grown to the point where there is a floating exchange rate which is determined the demand and supply of a particular currency. Today, anyone with knowledge of how the financial markets work can take part in foreign exchange trading.

The foreign exchange market is entirely dependent on supply and demand making it a highly volatile market. In addition, despite the fact that only a few major currencies are traded in the forex marketplace, the trading volume is extremely high. This is because every country is part of this market and has financial institutions and individual traders who trade in foreign exchange thus creating a high volume of currency for trade.

Today, you can trade in foreign exchange over the Internet from any location in the world. All you have to do is open your online forex account with the broker of your choice, deposit funds and start trading. The foreign exchange marketplace is open 24×7 making it possible to traders across the world. However, expert traders know that there are certain hours of the day when the market is at its peak. During these hours, there is a lot of volatility and certainly a lot of movements. These are known as the Power Hours and they usually coincide with the closing of the European trading sessions and the start of the US session. Also, the forex market has its cold zone where there is not much movement. This usually occurs when both the US and European sessions are closed while the Asian session is open.

The amount of profit that you can make in the foreign exchange market can be enormous if you make appropriate use of leverage. However, you should exercise caution not to overindulge in leverage without adequate training as this can quickly lead to your downfall.

Learn Foreign Exchange Hype and Make Lots of Money Fast

Earning money entails making the right choices and being determined to do what it takes to put cash into your bank account. That is why engaging yourself in the trade world is a good option if you want to earn really big.

The trade world is a lucrative and exciting business wherein you can earn a lot of money and at the same time learn a lot of the tricks of the trade which is an asset for your future plans and goals.

In engaging in the trade business, you should be very careful and discerning with which option of the most common forms of trading available you should have. These three common forms of trading are: Shares/Equities/Stocks; Options and Foreign Exchange or Forex.

Now you might be probably all dazed on all of these business jargons that were mentioned earlier. Read along and let me show you what is in store for you in this world called the Trade.

Let us start with defining what a Share, Equity and Stock are. In reality, these three actually refer to the same thing. As their name suggests, when you purchase a share, you own a piece, a portion of that company. You then become an investor in that company.

When you are already an investor, you are now entitled to a share of the company’s profits. These shares are called dividends. It is almost the same with having money in the bank, you also get paid with interest for investing your money.

Shares on the other hand are traded on exchanges. To be able to trade shares, you must need to use a stock broker to be able to purchase them for you, a stock broker may normally charge a fee for the transaction which depends on the number of people who are trading actively.

In trading shares, it is best for you to only trade to win when the price is increasing or going along. The downside of trading is that it is more complicated to make money when the price is decreasing.

The other form of trading, the Trading Option is, in reality more complicated than trading shares by themselves. The big difference between share and options is wherein stocks actually give you the ownership and rights on a small piece of the company, options are just contracts that provide you with the right to buy or sell the stock at a specific price by a specific date. You should keep in mind that in every option transaction, two persons are always involved- a buyer and a seller.

One of the best benefits of trading options is the leverage that it provides. With trading options, you can get bigger exposure by just utilizing only a small amount of your trading capital.

The final form of trading, the Foreign Exchange or Forex is actually the best form of trading among the three. With Forex, the risks are very minimal, the work is just easy and it is very rewarding.

The Foreign Exchange Market has transactions 24 hours a day, 5 and 1/s days a week and daily exchanges are actually worth approximately two trillion dollars. Forex is also made up of about 500 trading institutions such as international banks, central government banks and commercial companies and brokers for all types of foreign currency exchange. It is very obvious that trading institutions behind Forex are very credible and this may assure you that you would not be cheated on.

In getting started with the trade world, you should be able to learn all of the tricks of the trade because not everyone inside this world would be willing to help you. Instead, you should help yourself by being determined and willing to learn the correct strategies which you are going to apply when your trading days come.

How Globalization Affects Countries’ Foreign Policy

In this short article I will discuss the multi-facet topic of globalization. I will touch on how the increase in trade, investment in foreign entities, and immigration has all lead to sturdier globalization. This increase in globalization leads to a lower tendency for political entities to throw their countries into war. This creates a more stable global economy, where countries are interdependent on each other for their goods and money.

The definition of Globalization, as defined by the Merriam-Webster Dictionary is; the development of an increasingly integrated global economy marked especially by free trade, free flow of capital, and the tapping of cheaper foreign labor markets. So basically, the three main entities that contribute to Globalization are the free flow of goods, money, and labor. This definition does a good job of identifying what Globalization is, but not of how it affects our global society.

Nowadays our global society is so used to the benefits of Globalization, so much so, that countries are now dependent on these benefits. Countries are dependent on their trade with other countries, they’re dependent on the labor they use from other countries, and they’re dependent on the ability to have cash inflows/outflows from/to foreign countries. Now ask yourself – how might this affect a countries foreign affairs policy? This interdependency will cause countries to steer away from conflict. Why is this? Because of countries that were interdependent on each other were to declare war on each other, what would happen to these aforementioned benefits? They would lose out on the free flow of goods, labor, and capital that they have become so used to – which in turn would hurt both participating countries. The only way for a modern country to achieve maximum growth is through these aspects of globalization.

Another aspect to look at is multinational intergovernmental organizations such as the World Bank, the United Nations, International Monetary Fund, and World Trade Organization. These organizations provide great benefit to almost every country that covers our planet. It provides sturdier economies, in terms of stable currency, and provides seamless flow of goods and capital. Countries don’t want to start wars because conflict would cause these organizations to struggle, not only for them but for all countries involved – especially if the warring countries are economic powerhouses such as the United States and Russia.

This brings me to my next point – when powerhouse countries involve themselves in trade with third world countries that have a smaller economy, these powerhouse countries affectively act as a “roof” for their partner country. This roof shelters trade, immigration, and investments, and offers protection in their partnering country. When the U.S. has its hands in the trade of goods with another company, they are going to do their best to make sure their partner country’s factories are free from threats such mafias, and any other illegal activity that could hinder the production of goods that the U.S. wishes to acquire. The U.S. acting as this roof, also protects their 3rd world partners from invasion as well, because if a country was to invade the U.S.’s trade partner, this would affect not only their economy negatively, but the U.S.’s as well. It also promotes immigration, because with the free flow of capital and goods, people will come too. The capital and goods will increase the opportunities available for immigrants to move and make it easier for them as well.

Another bonus to increased globalization is the increase of social awareness and the wellness of workers. Countries, when they have their hands in other countries due to trade, are pressured to have equal levels of work safety and regulations. This happens because the fairness of trade relies on the reliance that all involved parties have the same level of regulations, safety requirements, and environmental safety precautions in place. This will ensure that no country is at a disadvantage because of a lack of environmental consciousness or safety precautions for their workers. An example of this is the trade war the U.S. implemented on China for their lack of acceptable working conditions for their people.

As we can see from the above paragraphs, there are almost limitless reasons to be pro globalization and increase globalization in countries. Globalization affects the global stage by shifting individual countries’ mindset from a nationalistic territorial, towards a unilateral interdependent global society. This allows for a weaker focus on individual economies and rights a greater consciousness for world events and global development.

Why Business Owners Seek to Enter Foreign Markets

It is no longer news that business investors from around the world look at entering foreign markets in order to expand their local business operations or diversify their investments and establish new operations in the international market.

Every year, hundreds of entrepreneurial and growing companies consider international expansion as a marketing and growth strategy.

If you have been successful in your business for some time and you have already mastered everything about running a business, overseas expansion may just be the logical next move you have to make.

On the flip side, for a majority of others, just having an overseas registered company and business address makes more sense to them than moving over to these foreign countries to establish a brick-and-mortar office.

Whichever the case is, there are at least 7 reasons entrepreneurs incorporate an overseas company, subsidiary or a representative office.

1. EXPANSION. About 95% of the world’s consumer’s reside outside Nigeria. Entrepreneurs whose vision and target market is a global one would consider to enter new markets abroad thus increasing their company’s overall market share and growth potentials.

2. POSSIBLE UNTAPPED MARKET. The possibility of an untapped market in foreign jurisdictions may motivate a Nigerian entrepreneur to incorporate an overseas company, subsidiary or representative office of his/her local company. Nigerian entrepreneurs who produce and package local foodstuffs for sale abroad fall into this category.

3. PROXIMITY TO INTERNATIONAL CLIENTS/CUSTOMERS. Truth be told, the Internet hs done enough to bring businesses closer to buyers. However, for some reasons, several business transactions may still warrant a traditional business presence in the city or country of operation. An overseas office of a local company need not be that big, and may be a home business address, a paid virtual office, or a small/liaison office just for the sake of getting customer feedback and linking back to the Nigerian office.

4. CORPORATE IMAGE. In order to boost their corporate image in the eyes of customers, suppliers, investors and businesses, some entrepreneurs just register an overseas subsidiary of their Nigerian company. This gives their target audience an impression that they are a company with international networks. In situations like this, the “international entrepreneur” need not set up a brick-and-mortar office abroad, he/she only pays for a virtual registered office in such country plus a mailing and telephone forwarding service.

5. COMPETITION. The fact that competing businesses or brands are entering the overseas market and are doing well motivates entrepreneurs in similar businesses to follow suit.

6. INTERNATIONAL PAYMENT. There are quite a number of international banking options available to companies registered in overseas jurisdictions – whether you are currently established in the overseas country or operating the overseas company from Nigeria. Having a corporate checking account abroad makes international payment much more easier by direct deposits, cheque or international wire transfers.

7. MIGRATION. Entrepreneurs considering a migration or move to an overseas country may incorporate a company in the destination country pending the time of their travel.

The United Kingdom, for instance, grants an Entrepreneur Visa to persons outside the European Union to gain entry to the UK for business reasons.

The initial visa will give you 3 years in the UK; and if during that 3 years you can show that you met certain criteria, you can then apply for a further 2 years extension visa. Following the 5 years, you’ll have the option of applying for permanent residency in the UK.

Learn A to Z About Foreign Currency Trading

The currency trading (foreign exchange or more know as Forex) market is the biggest and fastest growing market on earth. Its daily turnover is more than 2.5 trillion dollars. The participants in this market are central and commercial banks, corporations, institutional investors, hedge funds, and private individuals like you.

In Forex markets, investors trade on currencies of various countries (as well as gold and silver). For example, you might buy euro with US dollars, or you might sell Japanese Yen for Canadian dollars. It’s as basic as trading one currency for another.

Actually, Forex trading is quite similar to share market. You need to have adequate market info in order for you to win in every battle. But the difference between Forex trading and share market is Forex trading will not lose more than your initial investment.

How to let you more alert on Forex trading? Below I will share my opinion on it:

Trading Currencies – Forex trading is always done in currency pairs. For example, imagine that the exchange rate of euros to US dollars on a certain day is 1.1999, in which the number is called Forex rate. If you had bought 1,000 euros on that date, you need to pay 1,199.00 US dollars. Certain period later, the Forex rate is 1.2222, the value of the euro has increased in relation to the US dollar. If you sell it now, you will get profit of USD23.00. This is the power of forex trading. Of cause, you will have to chance to lose money if you are not careful about the market.
Market alert – Before you want to start invest in Forex trading, you should furnish yourself with ample market info. This info can be obtained via newspaper, business show, press conference, business magazine, etc. Actually a country’s currency is hugely influenced by major events, e.g. launching of mega projects, inflations, fluctuation in commodities price, etc. Of cause, the safest way to invest after any news announced. But always the case where high risk will bring higher profit. So, invest on Forex requires sharp-sighted on market.
Volatility and risk – Volatility is the degree to which the price of currency tends to fluctuate within a certain period of time. For instance, in an active global trading day (24 hours), the euro/dollar exchange rate may change its value 18,000 time flying 100-200 pips in a matter of seconds if the market gets wind of a significant event. Seeing these, high volatility will create a great fluctuation in currency; profit and loss is all happen in just a glimpse.
Frequency of trading – Most investors thinking that involve actively in the forex trading, they can have more market awareness and able to earn good profit. In fact, this is not true. Each year, forex trading market will have a few times of great transaction. As a prudent investor, you should invest at the right moment.
Monitoring news – Keep abreast of world news. Read all the headlines, particularly those directly related to Forex. Check the impact of such news, if any, on the charts. Also, read daily/weekly outlooks posted on Forex or general financial sites. Many include alerts to upcoming reports and events such as market indicators and interest rate decisions. Besides, you should pay attention to forecasts, some of which are available free of charge. Bear in mind that forecasts and predictions are made by people, none of whom can guarantee the occurrence of future events. Don’t forget about Forex glossaries, which are offered free on many platforms. A given word may have different meaning as it relates to Forex and to the terminology used by the Forex market participants.
Investors’s self discipline – Always remind yourself that you should only invest when you are confident. Don’t listen to rumors. Always the case that people lose money because of their greediness and listening to other people ‘tips’ without details study.

Lastly, I would like to inform you all that the potential financial risks of engaging in foreign exchange trading. Before deciding to undertake such transactions with a Forex trading platform, a user should carefully evaluate whether your financial situation is appropriate for such transactions. Trading foreign exchange may result in a substantial or complete loss of funds and therefore should only be undertaken with risk capital.

Basic Guide For Foreign Buyers of Real Estate in the USA

As the Great Recessions is slowly but surely fading away with the hopes of eventual recovery showing up on the horizon, foreign buyers and investors starting to pursue opportunities in the US real estate market again. Even though stable recovery of the housing market is still “work in progress”, many foreigners recognize that American real estate is “On Sale”, plus the dollar is historically weak, so many buyers are trying to snatch the bargains in residential and commercial properties here. However, a foreign buyer investing in the US must take extra diligence to plan the acquisitions due to nuances in taxation laws, title holding rules, money transfer rules and many other factors. There are many aspects to consider, I’ll concentrate on some key points:

(1) DOCUMENT EVERYTHING: Before you transfer even a dollar here, make sure you can verify where the money came from. Any transfers over $10,000 into the US, including your all cash real estate buys, will be reported to the federal authorities, and when the Feds come asking questions, you need to make sure that you can prove legal sources of your cash. According to 2001 Patriot Act and the Money Laundering Control Act of 1986, escrow and title companies, brokers, banks must report to the federal authorities any large deposits and money transfers over $10,000. Make sure you have documentation backing up your sources of income, taxes paid overseas, bank account statements, investment account statements, in other words – the paper trail.

(2) FINANCE OR ALL-CASH? If you are planning to buy with all cash, it will give you many advantages as the “all cash” buyers might enjoy deeper discounts from motivated sellers in many areas. All cash buyers can close deals very fast, and some sellers prefer to deal with buyers like this. However, I recommend that you plan the acquisitions with a real estate investment adviser to see if buying with some type of financing will be financially more beneficial for your investment strategy because of leverage-enhanced ROI and distribution of risk among several properties.

If you’re looking to finance your real estate acquisition in the US, be prepared to encounter some tough times. Real Estate Financing is pretty tough for even Americans these days, but for foreigners it’s even tougher. There are only a handful of institutional lenders who will consider loans for foreign nationals, but they will all require a large downpayment (at least 30% or more) and verification of income from your country. If you have a work visa in the US, such as H or L, and have an established credit history in the US, you may be able to qualify for regular financing with as little as 3.5% down even though you are still considered a “foreign national”.

If you have established relationship with your bank in your own country or another foreign bank, you may consider obtaining financing from them and then bringing the loan proceeds into the US as “all cash” purchase, again just make sure to have documentation as to where the money came from.

Alternatively, there a many private lenders who will lend up to 65% of the asset value at 9-12% annually regardless of your immigration status, and if you are looking for a commercial property, you might be able to finance it easier too, because commercial lenders underwrite loans primarily on the merits and income of the property itself, rather than the borrower.

(3) CONTROL YOUR ASSETS: In the US you can hold title to the property in many different ways: as an individual, corporation (either domestic or foreign), Limited Liability Company, partnership, living trust, pension fund, or many other form of entity. Each of these forms has advantages and disadvantages, especially when it comes to taxation of the rental income received from your investment property, transfer of the property to related or unrelated parties, estate planning and many other situations. You need to decide BEFORE you buy a property in the US how you will own the property, spend some time with a knowledgeable international tax advisor to learn about your options.

Investing in real estate is a very hands-on enterprise. You must think through the details before you buy the first property. It’s very hard to operate a rental business when you don’t see what’s happening yourself. I’m working with many investors and have owned many rental properties, and can tell many horror stories about property management companies embezzling money from out of town investors, renting units for cash but reporting them vacant, overinflating repair bills, etc. How are you planning to control your investment physically while living in India or Russia and owning properties in the US?

(4) BEFORE YOU ENTER, PLAN YOUR EXIT. Are you planning to sell for profit? How long before you sell? Did you account for the future capital gain tax? Will you take the money out of the country? If you are planning to sell for profit but re-invest proceeds into another property, you need to become familiar with 1031 tax-deferred exchanges that allow you to trade and consolidate properties for years and decades without paying a dime of taxes until their final disposition. It’s a great tool for smart investors that can make you very rich, but again, you have to plan for this strategy in advance and consult with a knowledgeable person. Besides, when you are selling a property here as a foreign individual, you are subject to all kinds of withholdings regardless if you made any profit or not, including 10% withholding under FIRPTA just because you are a foreigner, 3 1/3% withholding in California because the property is non-owner occupied, etc. But, you can avoid some of these withholdings if you learn the rules and plan your title holding strategy in advance!

(5) VISA CONSIDERATIONS: Important misconception I see among many foreign buyers that I’d like to address here: don’t assume that owning real estate in the US will automatically entitle you to a US visa. You can own $10 million of properties in the US, but still be denied an entry visa. So, make sure to get your visa status cleared first and then come to the US to look at areas of interest and specific properties. DO NOT EVER BUY PROPERTIES SIGHT UNSEEN!!!

(6) WHY REAL ESTATE? Finally, ask yourself honestly: why are you investing in real estate in the US? Because of visa, passive income, future market appreciation, or because you are thinking of making it your future home? If visa and investment potential are your main decision factors, consider some alternatives that can provide you with similar ROI (return on Investment) and visa opportunities, such as EB-5 visas ($1 million dollar minimum), “Regional Centers” ($500,000 minimum), E-2 small investor visas ($200,000 investment), etc. Or you can combine several strategies, depending on your preferences and access to capital.

Bottom line: your investing in real estate here should be a RESULT and the FINAL STEP of some serious planning path. Measure seven times, cut once, as we say in Russian. It’s much easier to avoid costly mistakes before you step into this market than waste time and money undoing mistakes made in the course of a rushed poorly planned real estate venture. Happy Investing!