With the deepening of economic globalization, many companies are doing foreign trade. Countries in the world are not at the same level of economic development, and currency values ​​are not the same. If currency conversion between countries is required, the term foreign exchange settlement will be involved. Next, I will introduce to you what does the foreign exchange settlement in foreign economic activities mean? What are the settlement methods?

What does settlement mean? What are the methods of foreign exchange settlement?

It is the abbreviation of foreign exchange settlement (exchange settlement/foreign exchange settlement), which is divided into two situations: personal foreign exchange settlement and company foreign exchange settlement. It must be handled at a bank or online banking. At present, many domestic banks can handle it. Regardless of whether it is an individual or an enterprise, as long as it involves foreign economic activities, it will be related to foreign exchange settlement. Foreign exchange settlement refers to the settlement of foreign exchange. When enterprises or individuals purchase products for foreign investment, they must take their own domestic currency to the foreign exchange bank to exchange foreign currencies, or the foreign currency obtained by the enterprise or individual after exporting their products will be converted into the national currency To use. The above two situations are the daily settlement of foreign exchange. The exchange of the same currency value may be different each time, because foreign exchange has to be linked to the exchange rate of currencies between countries. If the domestic exchange rate rises, the domestic currency obtained by converting the foreign currency with the same value will be less than before.

For the foreign exchange income of domestic institutions with an equivalent value of less than US$50,000 (including US$50,000), the bank can first handle the settlement or entry of foreign exchange, and indicate in the special copy of the export receipt verification in the foreign exchange settlement note or the receipt notice The corresponding verification form number.

What are the settlement methods?

Foreign exchange settlement methods generally include remittance, collection, letter of credit and others. There are three types of remittances: one is mail transfer, where the bank is the principal, and the transaction is conducted between the importing country and the exporting country; the other is wire transfer, where the bank in the exporting region sends an email to the bank in the importing region to conduct the transaction based on the principal. ; The other is bill transfer, that is, the bank mails the bill transfer purchased by the customer to the relevant personnel in other countries and regions. Entrustment includes two modes of presentation of documents, payment and acceptance. Documents against payment means that the bank, under the entrustment of the exporter, only gives the receipt to the importer after the buyer has delivered the money. Documents against acceptance means that the importer accepts the relevant bills You can get the goods. A letter of credit refers to a guarantee receipt issued by a bank between importers and exporters. As long as one of the parties can provide the receipt, the bank’s remittance can be obtained.

How to calculate the exchange rate?

The government financial authorities generally distinguish between different foreign exchange holding objects and foreign exchange sources, and give different treatment methods of full foreign exchange settlement, partial foreign exchange settlement, and all self-retention. The final exchange rate is the ratio of foreign exchange to total foreign exchange income. Calculated as follows:

Settlement rate = (amount of foreign exchange settlement ÷ total foreign exchange income) × 100%

Settlement is the abbreviation of foreign exchange settlement (exchange settlement/foreign exchange settlement). It is divided into two cases: personal settlement and company settlement. It must be handled at a bank or online banking. At present, many domestic banks can handle it. .

What kind of company can settle foreign exchange?

Everyone also needs to know what kind of requirements the company must meet in order to settle foreign exchange. The first is that the enterprise must have the foreign trade management rights granted by the relevant state agencies, and the enterprise must have an independent legal representative to execute the relevant rights. The second is that the company abides by the country’s relevant foreign trade regulations, and has not violated the law within two years. Thirdly, the management personnel of the enterprise must have participated in the training organized by the relevant foreign exchange institutions and be aware of the relevant regulations of the country’s foreign exchange. Finally, the enterprise meets the relevant management requirements of the provincial region where it is located.

Through the above introduction, I believe everyone can understand what it means to settle foreign exchange? What are the settlement methods? And what are the requirements for corporate foreign exchange settlement? We hope to help related enterprises and individuals with foreign trade activities to better carry out foreign economic activities.