How to Receive Money from Abroad (Without Getting Ripped Off)

  • Posted by Paul on December 15, 2014 in Exchanging Money Insight

When receiving money from abroad there are a lot of things that you need to take into consideration in order to mitigate your exposure to fees and charges. Many money transfer methods will involve incurring fees at both ends of the transaction. On top of this, recent years have seen very stringent Anti-Money Laundering and Counter Terror Finance laws enacted in many countries, which has driven some remittance services to increase costs. Depending on the volume of funds involved in the transaction, you could easily find yourself inconvenienced, held up (or even under investigation!) if you don’t make sure that you dot your Is and cross your Ts.

Receiving remittances from abroad

Here’s What to Consider When Receiving Remittances From Abroud

Tax considerations when receiving money from abroad

Many countries have rules in place regarding the taxation of incoming remittances, no matter what their purpose is. An example of this is some states in Europe such as Poland. It is important that you have an understanding of what laws apply in your jurisdiction and that you meet your obligations in this regard, in order to avoid falling afoul of your government down the track.

Anti-Money Laundering and Counter Terror Finance legislation when receiving money from abroad

Each country has slightly different rules, but there are some general things that apply broadly to most jurisdictions. When sending money abroad or receiving money from abroad, there are three things that you need to be very conscious of. One is the identity of the other party – if that person appears on any watch lists or is being monitored for being involved with the proceeds of crime, then it is possible that a flag may be raised. If you’re doing an international business transaction, for example, make sure you get some background information on who you’re trading with.

The next relates to the size of the transaction – in most places anything over $10,000 US dollars that can’t be easily explained will raise a red flag and may require additional paperwork or explanation (this does vary from country to country though, so be sure to check with the authorities where you are).  The last thing you need to be wary of is the regularity of the transfers.  If you are receiving regular remittances which are at or near the threshold then you can probably expect to raise some eyebrows with the local administration.

How to avoid doubling up on fees and being charged to receive funds

Many companies that help with international funds transfers will use systems that result in fees being charged both to the sender and the recipient. This is true of many bricks-and-mortar remittance houses, as well as the mainstream banking system. When you’re talking to the sender of the funds and choosing the best way for them to send money to you, it’s important that you factor in the total cost of the transfer. It’s essential that you check with all the facilitators that are involved as while some companies will offer very low fees to send money, they or the partner they use at the other end will often take a chunk of the money on arrival.

How to get faster access to the money after it has been sent

Many methods of money transfer can take quite some time, anywhere up to a week or ten days in some cases. Once again it is important to make sure that you ask whichever provider you have chosen to go with how long the funds will take to arrive. Often, especially if you’re receiving money from family or friends in an emergency situation, how long the funds take to arrive is a very important factor. This is something that should be coordinated with your sender.

With OrbitRemit we will have the funds to the recipient in 1-2 business days, straight from their bank account to yours. We charge a flat rate and are transparent with our exchange rates. Be sure to quiz your providers to make sure that you get the whole story before committing to an international money transfer.



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