Singapore is a global city and one of the world's most important commercial and financial hubs. It boasts of a robust economy and a stable currency, making it an appealing destination for businesses and individuals looking to send and receive money from overseas.

Singapore is also a popular expat and student location. Nearly one-third of the Singaporean population are non-residents. Many people receive overseas money to cover their living expenses and send money back home to support their families. Because of the advancement of online banking technology and systems, we now have a plethora of Overseas Remittance Service providers for transferring money all over the world at our disposal. We will look at the various ways and regulations for international money transfers to and from Singapore in this article.

Ways of Overseas Money Transfers in Singapore

Bank Transfers

Bank transfers are a simple and convenient way for transferring money internationally.  Most of Singapore's main banks provide international money transfer services, allowing consumers to send money abroad using their online banking portal or by visiting a physical branch. When receiving international funds, you need to provide the sender with your bank account number and SWIFT code. While the process is normally simple, it can be costly because banks often charge high fees and provide low exchange rates.

Online Remittance Providers

Online remittance services like TransferWise, iRemit, Xoom, and WorldRemit are becoming increasingly popular in Singapore. These services provide a quick and easy way for overseas remittance with lower fees and better exchange rates than traditional banks. Their mobile apps have made internal money transfers fairly simple for the majority of people. However, it’s important to do your due diligence and choose a reputable provider for a seamless experience.

Money Transfer Operators (MTOs)

MTOs like Western Union, MoneyGram, and Ria are companies that specialize in international money transfers. Cash pickups, bank deposits, and mobile wallet transfers are common services provided by MTOs. Customers can often bring cash to be sent overseas or retrieve money received from overseas at these providers' physical locations. They provide better exchange rates and lesser fees than banks. 

Underlying Fees

Irrespective of the Overseas Remittance Service you choose, it is important to check the exchange rates and fees to get the best deal. You should also compare the transfer speeds of various providers.  Some providers may offer same-day transfers while others may take some days to process. Below are the fees which may be applicable for the overseas money transfer - 

• Handling Fee - Charged by the bank to cover administrative fees. Typically, handling charges for transfers done physically at a branch are more than those sent through online banking.

• Cable charge - Charge for wiring the money when your transfer service provider sends money to an overseas bank account. This is usually a fixed amount.

• Agent bank charge - Charged by the receiving bank to process and complete the transfer. 

• Exchange fee - Charged by the SWIFT network to pay to multiple banks involved in the international money transfer process.

• FX margin - Some transfer service providers may charge a higher exchange rate than the true market rate. This hidden markup over the true rate allows banks to make extra profit from international money transfers as they are only required to pay the true market rate.

Regulations and Requirements

Singapore has strict regulations in place to ensure the security and integrity of international money transfers. The Monetary Authority of Singapore (MAS) is the regulatory body for International money transfers in Singapore and is responsible for the SWIFT network.

Here are a few key regulations and requirements to keep in mind:

• Government Control Regulations - To keep track of funding for criminal activity, the Money Authority of Singapore (MAS) monitors all international money transfers exceeding $1,500. It was introduced for the Prevention of Money Laundering and Countering the Financing of Terrorism, to ensure that Singapore’s banking system isn’t used to fund criminal activities such as money laundering or terrorism.

  The remittance service provider must supply details of the transfer to the MAS. You may be asked to provide personal information, such as a National Identification Card, as evidence of the identity of the person completing the transaction. Suppose you’re performing the transfer on behalf of a company. In that case, you may need to provide details of your employment, the business name, unique entity number (UEN), and/or the registered business address. If you’re sending or receiving a transfer on behalf of another individual, you may be asked to provide the necessary information about the account holder.

• Restricted countries - In some cases, you may not be allowed to send money to a country either due to a lack of necessary systems and legal clearances in place to transfer funds to that particular country or due to diplomatic sanctions imposed by the Government or the United Nations on that particular country. You can find out information about countries upon which sanctions are imposed on the Monetary Authority of Singapore (MAS) website.

• License Regulations - MAS requires that the overseas transfer service provider be listed on the list of licensed remittance agents. When performing transactions, they must adhere to strict Know-Your-Customer (KYC) processes.

• Tax implications - The Inland Revenue Authority of Singapore (IRAS) is cracking down on funds kept in undeclared offshore accounts by Singaporeans. When moving money overseas to take advantage of an investment opportunity, you must disclose any foreign investment income to the IRAS. When receiving an international money transfer, the source of the cash must be considered when determining tax implications. Not only will you need to record all foreign income you earn, but in some situations, you could be liable to pay taxes on any income that you earn overseas.

  
  

Navigating the various norms and nuances of international money transfer might seem daunting to a greenhorn. However, if you have the necessary documents in place, then you have nothing to worry about.

If you need further guidance about international money transfers, feel free to book an appointment with us today!