Introduction
Expats living away from home need a reliable way of receiving money. Ideally, they should have enough funds to meet all their needs. Whether they decide to have a wedding abroad or open a new business. Meeting financial needs involves choosing a money transfer service that offers a good service in the expat’s country.
We understand that our readers might be confused about what money transfer service to use and how to pick one. Read this hub page until the end to learn everything you need to know about using money transfer services as an expat.
Understanding Local Tax Laws for Money Transfers
Expats need to understand the local laws of the new country they have moved to. They might be very different from the laws back home, meaning they will need to adapt. More specifically, expats should find out how taxation applies to money transfers.
You will need to learn about what transaction must be declared. For example, in the United States, transactions of $10,000 and above must be documented with the Internal Revenue Service. Also, some transaction types will incur taxes while others will not. Find out what taxes you have to pay to ensure your finances are in order. Hiring a local tax accountant that understands the relevant laws will help.
More Tax Guides
How to Send Money to an Expat
We understand that expats want to have options when sending and receiving money. This section outlines the common transfer methods expats will encounter.
Bank Transfer: Sending money with a bank transfer means the expats need to open an account in the country they are currently living in. Some banks require proof of residency. Most bank transfers have a fee of $20-50, and the processing time is around 2-7 days.
Card: You can send money to expats with a debit or credit card. It is a fast way to send money and is widely available since most people have a card. However, the cost can be as high as 1.5-3% of the transaction amount.
Money Transfer Company: You can use specialist transfer providers to send money via a balance transfer. This is a good option if you need fast transfer speeds and want to enjoy low fees. However, the recipient must also have an account with the same money transfer company.
Cash Pick Up: When the recipient does not have a bank account or access to a transfer provider, then cash pick up is a good option. The sender needs the recipient’s name and chooses a brand to collect the money.
More Money Transfer Guides for Expats
How Expats Can Choose a Money Transfer Service
Finding a reputable money transfer service can be an intimidating process for new customers. This section shares what expats need to know about the process of finding a good specialist transfer provider.
Available in Their Country: Ideally, the service will provide transfers to and from the country the expat is living in. Also, a worldwide network of 150-200+ countries is desirable since it will be competitive. For example, services like TorFX and WorldRemit have a global network for hundreds of countries.
Payment Options: Expats may require different payment options to have as a backup. Therefore, choose transfer providers that include methods like bank transfer, card, balance transfer, cask pick up, mobile app, and more.
Costs: To save money on fees, find a transparent money transfer service and charge competitive fees. For instance, Wise clearly displays the fees and helps you choose the cheapest way of sending money.
Currency Exchange: Expats will likely need good FX rates to convert money into the local currency. Therefore, find a money transfer service that does not profit from currency conversions. For example, Instarem is a transfer provider that matches the mid-market rate, offers 150+ countries in their global network, and 24/7 customer support.
Reputation: Expats need financial stability in a foreign country, which means a reputable money transfer service is important. Consider checking the online reputation of a company before creating an account. For instance, you can look at social media websites and TrustPilot to see user review scores.
Best Money Transfer Services
Reasons Why Expats Might Need to Send Money
There are many reasons why expats may want to send money. It could be to fund a wedding, buy real estate, pay for living expenses or send money back home to help family members. The different reasons for sending money should be checked against local taxation laws to avoid legal trouble.
The best money transfer companies will accommodate all transfer types. For example, if expats have a business, then they can use services like Key Currency and TorFX. These have features that are aimed at business customers.
Common Concerns for Expats Sending Money
One of the common concerns that expats face with money transfers is finding good FX rates. While living abroad, currency exchange is usually required to spend money locally. However, poor FX rates can lead to a loss of money during a transfer. Therefore, the top money transfer companies match the mid-market rate for money conversions, which is ideal for expats.
Fees are another concern that expats share when transferring money. However, it is possible to avoid high bank and credit card fees by taking advantage of balance transfers. These offer fast processing times and fees that are a tiny fraction of the transfer amount.