Cross-Border Financing

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DEFINITION of 'Cross-Border Financing'

This term refers to any financing arrangement that crosses national borders. Cross border financing could include cross border loans, letters of credit or bankers acceptances, for example, issued in the United States for the benefit of a person in Canada.

BREAKING DOWN 'Cross-Border Financing'

Cross border financing within corporations can become very complex, mostly because almost every inter-company loan that crosses national borders has tax consequences, even when the loans or credit are extended by a third party such as a bank. Large international corporations have entire teams of accountants, lawyers and tax experts that evaluate the most tax-efficient ways of financing overseas operations.

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