The Top 5 Corporate Foreign Exchange Companies

If you are an internationally-trading business, either by importing or exporting goods or via paying for services abroad, you need a reliable foreign exchange partner. A foreign exchange dealer with a corporate FX department can help you:

  • Pay wholesale prices on currency exchanges.
  • Send money abroad with ease, with your personal, dedicated corporate FX dealer.
  • Become more knowledgeable about currency trends, and be advised on when is the right time to sell or buy.
  • Become able to hedge foreign currency risks through FX options (like forward contract).

View our list of recommended business FX companies that deal with Australian clients, or with overseas clients that require AUD transactions and hedging:  

#1 The Best Solution for Corporate Clients of All Sizes in Australia
  • Industry Veteran and Leader
  • Australian Offices in Perth
  • Known for Excellent Service
  • 9/10 Customers Worldwide are Happy with the Service
  • Easy System to Sign Up and Get Quoted Online
  • Fully Functional Online Trading and Mobile App
Free Quote

Since 1971

#2 Most Popular Choice for Aussie Businesses
  • Publicly Traded Firm in ASX
  • Australian Born and Bred
  • AU$20bn+Trading Volumes (Annually)
  • 24/7 Customer Support
  • 94% Customer Satisfaction
  • Easy to Register With Online or Via Telephone
Free Quote

Since 2000

#3 Great Rates for Currency Transfers from Australia
  • Largest Variety of Currencies
  • Large and Trusted
  • Very High Positive Client Feedback
  • Offices in Australia
  • Margins from 0.5% on All Currencies
  • Fixed Margins- Applied Automatically and not Based on Negotiation
Free Quote

Since 2004

#4 Best Online Payment Platform
  • Trading $6+ bn Anually
  • 150,000+ Clients
  • Global Approach with 30+ Offices Worldwide
  • Zero Fees from Everywhere
  • Large Private and Corporate Desk
  • Extremely Easy Sign Up from Australia
Free Quote

Since 1996

#5 Relocation Experts
  • Offices in Queensland
  • Specialising at Moving Abroad / Relocation
  • No Fees Worldwide
  • Hassle-Free Transfer Process
  • Fast and Easiest Website
  • More than 100 Years of FX Experience in Trading Staff
Free Quote

Since 2004

Which Business Should Use Foreign Exchange Services?

The most common misconception in the FX domain is that a business should be massive in size, in order to partake in the market. Most small businesses, in Australia, and globally, simply use their banks to make and receive international payments, without taking an active position in the market. This kind of approach leads to a great deal of waste, and can seriously damage businesses which are reliant on foreign currencies. Banks are non SME-friendly, because they are inflexible. Larger corporate clients will have access to the foreign exchange dealers, but smaller SME’s will not, and thus, as a small business owner – you would have to deal with your banker. A banker which is not permitted to give any special discounts on currency buy or sale. A banker which cannot offer any FX options like Forward Contracts. A banker which won’t follow the market in your behalf and make trades automatically at set rates.

On the other hand, corporate foreign exchange specialists like the ones listed above, will definitely:

  • Provide discount rates on large volumes. The more trades, the bigger the amounts, the lower the margin that they would take.
  • Look into your specific situation and guide you on the right timing to make payments, in accordance to the FX trending.
  • Offer your business with a variety of hedging tools that will help you overcome the volatility which is such a major part of international trading.

How hedging works for your business

Success rarely comes without risk. As an experienced business owner, you’re aware of this. To win big, you’ve got to put your neck out there. However, this shouldn’t mean losing everything when things go sideways.

Black swan events happen, even when you use good economic prediction tools. Life is full of unpleasant surprises. Your business should adopt a currency hedging strategy to guard against these risks. That way, when the market moves against you aggressively, you can limit your losses.

What Is Currency Hedging?

Currency hedging is a series of strategies meant to minimize business FX risk. Currency rates are not static – they move up/down not day-by-day or hour-by-hour, but moment-by-moment.

Market participants, be they day traders, corporate FX departments, or small businesses, can all be exposed to unexpected shifts in FX rates. A bad employment report, flash crashes, or a pandemic can cost significant amounts of capital.

To guard against these bad outcomes, firms that offer foreign exchange for businesses offer hedging tools. These include forward contracts, stop-loss orders, and limit orders.

How Do Businesses Make Use of Forex Hedging?

To mitigate losses caused by unpredictable currency rates, money transfer firms offer Forex hedging tools. How do their clients use them?

For starters, many use forward contracts to protect their bottom line against unfavourable rate shifts. A forward contract is an agreement between two entities to purchase an asset at a mutually agreeable price. In this case, the asset is a currency, like the USD, or EUR, or GBP.

The currency rate in a forward isn’t the best available rate. Instead, it sits somewhere between an imagined “worst case” scenario and the current price. You might not get the best possible rate, but should the market move against you, this tool will protect your assets. At delivery time, your forward contract will compel your partner to accept the agreed-upon rate.

Stop-loss orders are another tool traders use to limit downside risk. When set, a trade is triggered when the price of a currency falls to the noted rate, thereby avoiding a more devastating loss. There are downsides, though – a temporary dip can trigger a sale at what might end up being an unfavourable rate.

Forex hedging tools aren’t solely about reducing risk – you can also use them to exploit market movements. Limit orders are favoured for this purpose, as they only execute trades at a specific price. If the market moves in your favour, you can end up sending money from Australia for far less than you would expect. Similarly, you can receive cash at a much more profitable rate than usual.

Why Are Deposits Necessary To Set Up A Forward Contract?

Forward contracts can reduce the risk for your company. For this reason, however, they’re a risky financial instrument for the firms that offer them. If the market moves significantly against you, they are still obligated to pay you at the agreed-upon rate.

Further, some customers, dismayed that the market moved in their favour, abandon the contract. As a result, some firms require a security deposit of 10-20% of the transaction amount. Your transfer provider will hold this fee in trust until the date of fulfilment. On that day, they release the deposit and use it in the agreed-upon transaction.

Don’t be disappointed if an FX firm treats you this way. Often, money transfer providers, like OFX or WorldFirst, only impose this requirement on new or smaller customers. Once you have proven that you are a trustworthy actor, they will waive the need for a deposit on subsequent transactions.

Seek Out Business FX Firms That Offer Hedging Tools

There are dozens of corporate FX providers out there. However, not all offer currency hedging. As a business owner, you should be using firms that provide these corporate FX services.

We don’t say this just because they can save you money. To even offer hedging tools, these corporate FX firms must satisfy stringent regulatory requirements. Forward contracts are essentially derivatives – ever since the Global Financial Crisis of 2008, they have been under intense scrutiny.

To pass inspection year after year, these firms employ brilliant financial minds. Not only do they keep these operations in compliance, but they also offer expertise other firms can’t match. If you want to minimize risk as you build your business, you’ll want these folks on your side.

Why having your dedicated dealer in the corporate FX desk can take you a long way?

Finance can be a tricky subject at the best of times. Get a detail wrong, and you might lose out on profits. In worst-case scenarios, you could even take a significant loss.

In 2020, the stakes are higher than ever before. Market volatility has been wreaking havoc on currency rates. Under these conditions, an innocent mistake could lead to a loss from which you may never recover.

You can’t wing it anymore. Now, more than ever, you need expert counsel. Dedicated dealers provide this expertise, as they are well-versed in all things corporate FX.

What Is A Dedicated Dealer?

Dedicated dealers are finance professionals who possess an in-depth knowledge of Forex markets. They keep a close watch on current affairs that could impact currency rates. With that in mind, they then use their understanding of economics to make recommendations to clients.

They also understand that every client is different. What works well for a Fortune 500 company might not be optimal for SMEs. The goals of an SME will differ from those of an individual. No matter the customer, they make it their mission to establish their intentions clearly.

In this way, they can craft business FX solutions that work best. Any serious firm that does foreign exchange for businesses has them on staff. If they don’t, keep looking.

How Can A Dedicated Dealer Help?

A dedicated dealer can employ many creative solutions that can aid businesses/individuals. Take inheritances, for example. Every year, thousands of people repatriate them from abroad. However, if you move your windfall without consulting a dedicated dealer first, you could lose CONSIDERABLE sums of money.

In many countries, moving more than a specific amount can trigger gift, inheritance, or estate taxes. In Finland, for instance, only the first 20,000 EUR is tax-free for close relations. The state taxes every EUR above that – the more you move, the higher the rate you’ll pay.

Sometimes, though, you can get around the rules with a bit of creativity. If it’s legally possible, a dedicated dealer can break up an inheritance into tranches. This way, you may be able to avoid paying taxes on your estate.

Their Knowledge Of Currencies Can Save (Or Make) You Money

However, most strategies dedicated dealers employ revolve around currency hedging. This term refers to tools/tactics designed to protect your capital from currency rate fluctuations.

The forward contract is one of the most common Forex hedging tools in the dedicated dealer’s arsenal. They reduce risk by establishing a guaranteed rate for a future currency transaction. Regardless of the geopolitical climate, your dealer will often recommend this arrangement for significant transactions. After all, it only takes one black swan event to damage your finances significantly.

Stop-loss orders also protect business FX clients from fiscal ruin. These tools set a rate that constitutes an acceptable loss for a business/individual. If you are a trader, you may want to consult a dedicated dealer about how to use this FX hedging tool. After examining your finances and your appetite for risk, they can recommend where to set it.

Finally, dedicated dealers from Foreign Exchange Companies can advise clients about limit orders. A tool commonly associated with stock trading, you can also use it for currency hedging. A limit order only conducts a currency trade when the named price is met. A dedicated dealer can advise its use to access rates that might not usually be attainable.

For instance, when the Corona panic hit markets in March 2020, it (briefly) increased the value of the USD by historically significant margins. In situations like this, your dedicated dealer might recommend aggressive limit orders to take advantage of inter-session volatility. If prices don’t hit your target, no worries. But, if they do, you may be able to snag an incredible, once-in-a-lifetime deal.

Any Limitations on Joining a Corporate FX Service?

All businesses, big, and small, can use commercial FX services. As long as the business is registered in Australia, New Zealand, United Kingdom, Eurozone, or UAE, you are good to go. For US-based businesses, you can choose World First, Moneycorp, OFX or Currencies Direct as this FX companies have licenses to operate in that region, while other companies might not have. There is not minimal trading volume which is expected of you, but if all of your trades are under AUD $5,000, you might be referred to use the online system and not be provided with a dedicated FX firm. Since these Foreign Exchange Companies are 100% compliant with Anti Money Laundering laws, you should anticipate quite a lengthy process until you are approved as a trade-able client. In the same fashion, you would have to provide a lot of documents if you decided to open a new business bank account. They will need unvarying proof of your business’ registration status, address, and bank account, to set up. This is the only major hurdle with these companies because once you have registered, you will be assigned with your own corporate FX dealer whom you’ll be in contact with for current and future trades. That person will know you, and your business, and will offer bespoke solutions to any query.