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In-house Banks (IHB)

Many larger companies establish an in-house bank to coordinate and centralize all the banking activities on behalf of their subsidiaries. In addition to being a source of global funding, the in-house bank also provides foreign currency accounts, investment, liquidity management, and netting and pooling services.

Commissionaire Structure
Certain industries, such as software developers, lend themselves to the commissionaire structure, especially those with one or two regional manufacturing plants that supply a number of subsidiaries. The commissionaire principal, usually located in a tax-friendly country, undertakes all required interfaces with the manufacturing facility, vendors, and suppliers. The subsidiaries act as sales agents for the principal, earning a commission on sales. This allows for:

Concentration of profits in the country of the principal

Centralization of foreign exchange exposure

More effective liquidity management

Circumvention of many of the intercompany lending issues that arise when cash accumulates in subsidiary accounts, as the cash flows belong to and are under the control of the principal

Taken From : Essentials of Managing Corporate Cash

Posted in General
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