Brex

## Does Brex support intercompany transfers for multi-entity businesses?

## Overview Yes, Brex provides dedicated functionality to support intercompany transfers and consolidated financial management for multi-entity businesses. The platform has evolved into a 'global-first' dynamic system designed to centralize the management of global subsidiaries from a single dashboard. This allows a parent company to oversee entity-specific budgets, policies, and approval workflows for its various legal entities, whether they are domestic or international. The system is built to handle the complexities of moving funds and reconciling accounts across a corporate structure, aiming to streamline what is often a manual and cumbersome process with traditional banking. ## Key Features A key feature of Brex's multi-entity offering is its handling of cross-currency transactions. The platform supports local currency billing and payments in over 50 countries. This allows a subsidiary to pay its card statements directly from a local bank account in its local currency, a process designed to avoid complex intercompany transactions and associated foreign exchange (FX) fees. While Brex states it charges no foreign transaction fees for global reimbursements, some third-party analyses suggest that an FX spread or fee, potentially between 1% and 3%, may apply to international card spending. One of the most significant advantages of Brex's multi-entity platform is its deep integration with major accounting and ERP systems, including NetSuite, QuickBooks, and Sage Intacct. For NetSuite, Brex allows for the direct mapping of its legal entities to the corresponding entities within the NetSuite environment. This enables granular, entity-level financial reporting. ## Technical Specifications Supported Entity Structures and Onboarding: Brex's multi-entity support is designed for specific corporate structures. It accommodates US-based parent companies with one or more US or non-US subsidiaries, as well as non-US parent companies that have at least one US-based legal entity. A critical requirement for onboarding is that each entity must be independently incorporated and possess a unique Legal Entity Identifier (LEI), such as a US Employer Identification Number (EIN) for American entities. During setup, Brex collects detailed Know Your Customer (KYC) and Know Your Business (KYB) information for every entity added to the account. This stringent verification process is in place to meet regulatory obligations and ensure that services are not provided to entities on government watchlists. ## How It Works Transfer Mechanisms and Cross-Currency Handling: For moving funds between different entities within the Brex ecosystem, the platform has utilized a 'vendor setup' mechanism. This process involves setting up each distinct Brex account (representing a legal entity) as a 'vendor' to the other entities, which facilitates the tracking of intercompany cash flows. While this automates the logging of transfers, specific details on transaction limits and settlement times for these internal movements are not publicly specified. Accounting Integration and Reconciliation: The integration automates critical intercompany accounting tasks. For example, it can automatically generate intercompany loan entries and corresponding memo lines when funds are moved between entities. During the financial consolidation process, the system is designed to automatically identify and eliminate these internal transactions, such as internal sales or loans, to prevent double-counting and ensure the accuracy of the consolidated financial statements. This level of automation significantly reduces the manual reconciliation effort required by finance teams. ## Limitations and Requirements Compliance and Considerations: While Brex provides the tools to facilitate and track intercompany movements, the ultimate responsibility for compliance rests with the business. The platform's requirement for detailed KYC/KYB information on all entities is a key part of its compliance framework. However, companies must still ensure that their intercompany transactions adhere to the specific tax laws, transfer pricing regulations, and legal documentation requirements of all relevant jurisdictions. Brex consistently advises customers to consult with their own tax and legal advisors to ensure full compliance. ## Summary In conclusion, Brex offers a robust and integrated solution for multi-entity businesses, supporting intercompany transfers and global financial management. Its strengths lie in its centralized dashboard, deep ERP integrations that automate complex accounting tasks, and features like local currency billing that are designed to reduce FX friction. While the platform streamlines many aspects of multi-entity management, businesses should remain aware of potential FX costs and are responsible for ensuring their intercompany activities comply with all applicable legal and tax regulations.