Types of Invisibles
Generally speaking, the term 'invisibles' refers to both; international payments for services (as opposed to goods) as well as movements of money for which there is no contra transaction (i.e. money is not exchanged for either a good or a service). These non-exchange payments are often referred to either as 'transfer payments' or 'remittances' and may include money sent from one country to another by an individual, business, government or NGO (non-governmental organisations – often charities).
An individual remittance may include money sent to a relative overseas. Business transfers may include profits sent by a foreign subsidiary to a parent company or money invested by a business in a foreign country. Bank loans to foreign countries are also included in this category, as are license fees paid for the use of patents and trademarks. Government transfers may involve loans made, or official aid given to, foreign countries while transfers made by NGO's include money used for charitable work in foreign countries...
Read more about this topic: Invisible Balance
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