5 tips for sending money to Asia
Mobile money transfers provide a low-cost, contactless way to send money to loved ones overseas.
Every year, over a million people living in Canada send money to friends and family living around the world. Among the top receiving countries are China, India, the Philippines, Vietnam and Pakistan. If you’re looking to send money to loved ones in one of these countries or anywhere else in Asia, here are some key tips to help you stay safe and save money.
Five tips for transferring money to Asia
Follow the tips below to avoid delays and save as much as possible on fees and foreign exchange charges:
- Send money directly to your recipient’s bank account or mobile wallet. With COVID-19 affecting so many businesses around the world, it may be more difficult to go to a physical store or transfer agent to receive funds. It’s also safer to receive money digitally instead of leaving home and potentially having to carry funds around in public. Avoid this hassle by sending money directly to your recipient’s bank account or mobile wallet.
- Use a cashback credit card to pay for your transfer. Fund your transfer with a cashback credit card, so you can get back some of what you spent. There are many credit cards that come with cashback rewards, but you want to look for one that lets you send money transfers without triggering a high cash advance interest rate. For example, if you send a Simplii Financial Global Money Transfer and pay with a Simplii Financial Cash Back Visa Card, the transaction counts as a purchase — not a cash advance. Plus, this card lets you earn 0.5% cash back on the amount you send.
- Look for promotional offers to save money. Many money transfer services offer special incentives for first-time customers. Right now, you can earn up to $250 with your first Simplii Financial Global Money Transfer. How the offer works: Get $200 when you open a Simplii Financial No Fee Chequing Account and set up eligible direct deposits. Plus, get $50 cash back after you send your first Simplii Financial Global Money Transfer using promo code GMT50.
- Pay attention to exchange rates. Monitor exchange rate changes, and try to send when you can get the most out of your Canadian dollars. Even a small difference in rates can make a big difference in the amount of money your loved ones receive. Consider setting up a forward contract, which helps you limit financial losses by choosing an exchange rate at which your transfer will be triggered.
- Plan out large transfers in advance. If you plan to send a large amount, be aware that many transfer services impose maximum daily, weekly and monthly sending limits. Additionally, look for a transfer service that charges a flat-fee (or no fee) rather than a percentage fee. When sending a lot of money, a percentage fee can end up taking a lot out of your transfer amount. Simplii Financial Global Money Transfer typically lets you send up to $30,000 per day with zero transfer fees, although the transfer limit may be lower for some countries.
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Each country has its own currency (or currencies), tax rules and financial systems, so it’s important to take your time and research your options before transferring money abroad. To make things easier, we’ve broken down the most important points you should know about sending money to the following popular Asian market destinations.
If you’re sending to China
China’s national currency: Chinese renminbi (RMB) ¥
Note: The terms renminbi (RMB) and yuan (CNY) are often used interchangeably to refer to China’s currency. Both are represented by the symbol ¥. However, RMB is China’s official national currency, while yuan is actually a unit of that currency.
What are my transfer options? You can send cash or wire electronic funds to China, transfer money directly to a Chinese bank account or transfer to a mobile wallet like Alipay. Mobile payment systems are widely used in China and don’t require your recipient to go to a physical location to receive funds, so you should try to transfer funds to a digital wallet if you can.
Are money transfers to China taxed? China does not impose an inheritance tax or gift tax on inbound money transfers. However, this may change in the future.
If you’re sending to India
India’s national currency: Indian rupee (INR) ₹
What are my transfer options? You can send cash or wire electronic funds to India, transfer money directly to an Indian bank account or transfer to a mobile wallet like Google Pay (formerly Tez). The State Bank of India (SBI) used to offer an express remittance service that allowed transfers from many countries, including Canada, to India. However, this service was discontinued as of January 1, 2021.
Many money transfer service providers allow you to transfer directly to a recipient’s bank account, which is usually one of the easiest and least expensive ways to transfer money to India. Some providers, like Simplii Financial, even offer no-fee transfers, so you can keep a little more money in your pocket or send a larger transfer to your loved ones.
Are money transfers to India taxed? Money transfers to India are not taxed if the money (1) is sent to blood relatives, (2) is part of an inheritance or wedding gift or (3) is from a fund foundation (educational, medical etc.) as per guidelines set by the Reserve Bank of India. All other gifts in excess of INR 50,000 are taxed.
If you’re sending to Vietnam
National currency of Vietnam: Vietnamese dong (VND) ₫
Transfer options: You can send cash or transfer money directly to a bank account in Vietnam. Cash is the most popular payment method. Mobile wallets are getting increasingly popular in Vietnam, but you’ll be hard-pressed to find one that allows users to receive funds from abroad.
You may be able to load funds onto a VTC Pay wallet from your Visa or Mastercard credit card. But, it’ll probably be easier to send directly to your recipient’s bank account instead. From there, funds can be spent or moved onto a Vietnamese digital wallet.
Are money transfers to Vietnam taxed? Incoming money transfers to Vietnam may trigger different types of taxes depending on the purpose of the funds. Both residents and non-residents must pay 10% income tax on gifts and inheritances valued over VND 10 million (roughly CAD$550).
If you’re sending to the Philippines
National currency of the Philippines: Philippine peso (PHP) ₱
What are my transfer options? You can send cash or wire electronic funds to the Philippines, transfer money directly to a Philippine bank account or transfer to a mobile wallet like GCash, GrabPay or PayMaya. Given that more than 70% of the country’s population do not use bank accounts, you may want to look at transferring money to a mobile wallet instead.
Many people living in the Philippines prefer e-wallets over any other payment method – even credit cards. Data released by the BSP (Bangko Sentral ng Pilipinas), the central bank of the Philippines, shows that, as of 2018, roughly 20% of the population uses a mobile wallet.
Are money transfers to the Philippines taxed? Any money transfers over ₱50,000 (or US$10,000 for foreign currency transfers) must be authorized by the BSP. Furthermore, any transfers over ₱250,000 must be filed with the Philippine Bureau of Internal Revenue (BIR) and will be subject to a 6% tax.
If you’re sending to Pakistan
National currency of Pakistan: Pakistani rupee (PKR) ₨
Transfer options: You can send cash or wire electronic funds to Pakistan, transfer money directly to a bank account in Pakistan or transfer to a mobile wallet like Easypaisa or SimSim. Currently, the mobile money scene is dominated by over the counter (OTC) cash transactions using intermediary money transfer agents. However, more and more people are beginning to use mobile wallets.
The COVID-19 pandemic may make it difficult for recipients to receive cash in person at an agent location, so you may want to try transferring to a bank account or mobile wallet instead.
Are money transfers to Pakistan taxed? Residents of Pakistan can receive up to ₨5 million annually without having to provide the Federal Board of Revenue (FBR) with details on where the funds came from. If the recipient can’t provide this information, then income tax will be charged on funds. But if a satisfactory explanation is provided, no income tax needs to be paid.
The way money is transferred around the world is changing. Mobile wallets and direct bank-to-bank transfers are becoming more popular because of how quick, easy and inexpensive these methods are compared to sending cash or wire transfers. When sending money to loved ones in Asia, consider which method will be the easiest, most cost-effective and won’t trigger tax on your recipient’s end.
Learn more about sending money abroad with our A-Z listing of country-specific money transfer guides.
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