Foreign bank accounts are one of the most misunderstood tools of business banking. When people hear about foreign bank accounts, they picture shady, offshore Cayman Island accounts, or the strict, private banks of Switzerland. The reality is much less exciting. 
There are plenty of reasons why a business would want a foreign account. International banks facilitate international business, which helps pay for foreign contractors, cover payroll, and invest in emerging markets. However, because offshore banking is so heavily associated with tax dodgers, the federal government keeps a close eye on any business with a foreign bank account, and requires entities with such accounts to file an annual Report of Foreign Bank and Financial Accounts (FBAR).
What is a FBAR?
This is a simple form that some entities with foreign bank accounts must file with the Department of Treasury. Officially called FinCEN Form 114, it asks for the filer’s personal information and the information related to any foreign accounts overseen. The bank’s name, type of account, and the maximum value of the account all have to be disclosed. (You can download the form at the Department of the Treasury’s website.)
Who has to file a FBAR?
Any U.S. citizen, resident, or entity with a financial interest or signature authority over at least one foreign account. The aggregate value of all foreign financial accounts must also have exceeded $10,000 at some point during the calendar year to have to be reported.
Are there any exceptions to that rule?
Just a few. Accounts owned by a government entity or international financial institution normally do not have to be reported. Certain types of accounts jointly owned by spouses, or owned by IRA owners and beneficiaries, also get a pass. Banks based on US Military Bases don’t need to be reported, nor do accounts that people solely have a signature authority over. But the exceptions are still a bit complicated – if you want a full list, you should read the FBAR Filing Instructions.
When do you have to file a Foreign Bank Account Report by?
The deadline for 2013 is June 30, 2014 – so that deadline is coming up fast! It’s also a requirement that the FBAR be filed electronically, and before you do that you have to apply to do so by filling out FinCEN Form 114a. In other words, there isn’t a lot of time left, and the Department of the Treasury doesn’t give extensions. Luckily, the IRS has a hotline you can call if you need some help; you can reach them by dialing 866-270-0733 (toll-free for callers inside the U.S.) or 313-234-6146 (not toll-free for those outside the U.S.).