International Factoring

Definition

International Factoring. It is a variation of factoring, in which the buyer(debtor) is located in a country different from the vendor. Country specific rules or regulations may apply due to the international character of the debt. These rules could affect the relationship between the finance provider, the buyer, and the vendor. For these reasons, often two factors are involved, one in the buyer's country (known as the import factor)and one in the vendor's country (known as the export factor). The two factors establish a contractual relationship to serve the buyer and the vendor, respectively (called the two-factor system). Normally, the two factors use the established frameworks provided by either Factors ChainInternational (FCI) or International Factors Group (IFG).