Easiest for (without loss of generality) US clients: Establish a US bank account and get paid with checks, ACH (in-country electronic transfers), or wire transfers.
Easiest for you: Establish a bank account in your country and instruct your US clients to pay you with international wire transfers.
US clients are often not very experienced with international wire transfers and it causes hitches for their internal processes and banks, so the US account option will save you a lot of friction on a per-client basis in return for having more headaches up front. (The easiest way to set up a US bank account if you don't physically reside in the US is to do it through a local branch of a US-homed megabank. Despite the general impression of a lot of freelancers on this matter, international commerce is in fact fairly routine and "the Patriot Act" -- Know Your Customer and anti-moneylaundering regulations -- are not an absolute barrier to this.)
You should probably avoid using Paypal for transfers of more than a few hundred dollars. I like Paypal, don't get me wrong, but they're not well-suited to running a consultancy on top of.
Just to add to this, I think any serious company you'd work with would be shocked by someone wanting to be paid in anything other than a wire transfer (and by "shocked", read "wouldn't be able to do it and wouldn't take you seriously because of it). In my experience, this is how almost all payments are made in the real world.
If you're a professional, use a wire transfer like everybody else.
Absolutely correct with regards to "clients will neither comply with nor be impressed by requests to pay in any manner they're not used to paying by", but I think that wire transfers are actually fairly exotic by US standards. They typically expect to pay with checks or ACH payments. (More often checks, in my experience. Source: I've cashed hundreds of thousands of dollars of them, and every time it happens I worry that this is finally the time that I'll be shot for robbing the bank.)
Imagine what it's like to walk into your Podunk suburban bank every two weeks with a $50K+ check in your hands from a company with a .com in their name. Yeah, that was fun.
But Patrick's absolutely right re: checks. If cash flow is tight, my favorite trick is to FedEx a prepaid overnight envelope to your client. Ask them to place the check inside. This elimates the "check is in the mail" song and dance, and it's only marginally more expensive than a wire fee.
I'm based in the UK, with some clients in the US and EU. I always offer direct bank transfer (to UK bank account), credit card and PayPal as payment options.
In the UK/EU everything is a direct bank transfer.
From the US — despite offering the wire transfer details — the majority of payments I've received are CC, PayPal and (ugh) cheque. Apparently it causes them less hassle that arranging a wire transfer with their accounts department. As ever YMMV.
I have to say that's fairly surprising to me - all of our clients, both from the US and from other places, pay with bank transfers. I've never seen anyone suggest using PayPal or a credit card, and I would find it surprising to make payments of 10s of thousands of dollars that way.
But as you said, that's just been my experience, I guess there are other ways of doing things.
All three options (bank transfer, CC & Paypal) are presented on the invoice — so this hasn't been through client request but through client preference. I'd actually prefer bank transfer since it usually works out slightly cheaper. But not enough to care about ;-)
YMMV but opening a US bank account as a UK citizen is easy as long as you're present on US soil.
Opened a checking account at a Chase branch in San Francisco with my passport and as many other proofs of address as I could muster. Everything gets delivered to my UK address.
I have had two years of being paid by US company while in the UK and painful does not even begin to cover it. Initially I got airmailed checks (cheques) and would pay them into my UK branch who would promptly send them back to the US for clearance. It took one payment five months to end up in my account. Seriously.
We fixed it and started using wire transfers which worked fine but I would get beaten up on the exchange rate. I was one of the few people in the UK hoping our economy would get worse just to improve my rates :-)
I would say the biggest problems were
- W2 withholding (they had to have proof I was legit or they withheld taxes and payments)
- not having a US bank account
Getting a US account is on my todo list, but it was so problematic (my UK bank simply refused to help - less than 2million GBP turn over ? Fuck you, work it out yourself). There is a Silicon Valley bank that is more amenable but by the time I found them we what wire transfers sorted and it lost it's allure.
So until I am likely to do a lot of small business in the states, I am sticking with "wire me the money - or I don't work"
In my experience as a UK citizen, is that the bar for sorting out a US bank account for a non-US citizen running a non-US registered company is non-trivial. Especially if you're not physically in the US. It's a process that can take several months of tedious running around with forms and no guarantees of a result at the end of it. If others experiences have been different and easy — I'd love the details ;-)
I've also found that US companies expect US bank accounts to be associated with US companies/individuals, so their standard forms are also setup that way to expect SSNs, etc.
For me, running a non-US business, international bank transfers, credit card payments (I've been… surprised… how large some CC payments have been) and PayPal (very much not ideal I agree) have been much simpler.
I like Paypal and have processed somewhere north of $100k through it. That said:
1) Paypal's fraud algorithms are tuned by having lots and lots of comparatively small transactions at comparative high frequency rather than few comparatively high transactions at comparatively low frequency. My account looks very unrisky because it accumulated $100k in $25 chunks over years. I think Paypal would quite possibly need to enquire if I got $25k in a $25k chunk once. Unfortunately, "First-time interaction between US-based Paypal account and foreign-based low-history Paypal account is a huge transfer" will quite possibly set alarm bells ringing in their fraud department, and you might find your money tied up for a while as you try to demonstrate that you're not a criminal enterprise. (Many HNers will accuse Paypal of trying to steal the money and, on this issue, many HNers are fools, but there is a very real risk of you having to deal with complications that you don't need.)
2) Your best customers can't pay with Paypal. I'm not exaggerating: they can't pay with Paypal. There is literally no button at their company which pays you with Paypal. They have an entire department of people who are capable of moving PDFed invoices into an accounting system and clicking a button which generates a check or an ACH payment, but there is no button to click which says "Transfer $25k to our Paypal account then send it to 'tbarbugli."
I've always been amused with the creativity that Finance can show if it's in their interests, and the lack of creativity when the issue is irrelevant to them. Having had a long background in support, I must admit that I'm jealous of that political power :)
I've attempted - and failed - to establish a US account many times. I've even asked US natives and US banks over here to help, and they couldn't do it either.
I always seem to run into rules abut money laundering, domicile, and all kinds of other bureaucratic nonsense.
If anyone has managed to get past this, I'd love to know what the secret is.
A friend of mine had the same problem with HSBC moving from Australia to England. Slogan: "The world's local bank". Experience: "Go away unless you're a large business". Their practices actively discourage private users. The branch here in Melbourne wouldn't even accept forms supplied by a London branch, filled in, then faxed by the same London branch office... 'Not original', despite being sighted as original by the London staff, who were the ones doing the faxing.
Open up a US LLC via the internets, then travel to the US and open up a bank account under the LLC's name with your certificate of incorporation in hand (this gets mailed to you by the state you incorporated in). Results may vary depending on the state. This is also good in case you get sued, your personal liability is shielded by the LLC unless the corporate veil is pierced.
Easiest for you: Establish a bank account in your country and instruct your US clients to pay you with international wire transfers.
US clients are often not very experienced with international wire transfers and it causes hitches for their internal processes and banks, so the US account option will save you a lot of friction on a per-client basis in return for having more headaches up front. (The easiest way to set up a US bank account if you don't physically reside in the US is to do it through a local branch of a US-homed megabank. Despite the general impression of a lot of freelancers on this matter, international commerce is in fact fairly routine and "the Patriot Act" -- Know Your Customer and anti-moneylaundering regulations -- are not an absolute barrier to this.)
You should probably avoid using Paypal for transfers of more than a few hundred dollars. I like Paypal, don't get me wrong, but they're not well-suited to running a consultancy on top of.