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5 tips to opening a bank account abroad
Whether you are taking up employment abroad for a year or are moving to the other side of the world for several years, you will certainly need to quickly open a bank account in your host country. To make the right choices, anticipating this process by learning about the banking system, transaction fees and your potential obligations is the key. Take a look at our 5 tips to opening a bank account abroad and avoid the pitfalls.
1. Learn about your host country’s banking system.
Banking systems, financial services or solutions, available payment methods and reliability of banking institutions may vary from one country to another. Though the European Union tends to increasingly standardize the banking systems of its Member States, outside Europe, legislations can be quite different depending on the country.
2. Consider the specialised banking institution option.
Your bank in your home country may have subsidiaries or partners abroad. Find out if there are any branches or offices in your future host country: this could facilitate the entire process. Some banking institutions also provide solutions and services specially designed to meet the needs of expat customers: foreign currency accounts, preferential rates on international transfers, free worldwide cash withdrawals...
3. Check what are the required documents to open a bank account.
Not only can procedures for opening a bank account be different from one country to another, but they also may vary depending on the institution. In most cases, you will at least need to provide proof of identity along with proof of address. However, other documents may be required, such as:
- a bank reference,
- a residence permit,
- an employment contract or letter from your employer,
- a copy of your birth certificate...
Make sure you leave with all the necessary documents. Bear in mind banks may refuse to open an account for you, especially if you are on a short-term stay.
4. Find out what are the money transfer fees.
The cost of international money transfers are likely to vary depending on the destination country and currency. Within the European Union, SEPA (Single Euro Payments Area) allows you to make money transfers from one Member State to another at the same price as domestic transfers.
Outside the EU, rates can be highly variable. In most cases, the transfer cost includes a commission and exchange rates (proportional to the transfer amount). Do note that in some cases, the receiving bank may charge a transfer reception fee. Spend time comparing different options: for example, using a foreign exchange broker can help you transfer money on the cheap.
5. Remember that going expat might have an impact on your tax liabilities.
If you have a savings account in your home country and your tax residency status changes due to expatriation, you might not be able to keep this account. In some countries, only residents can have savings and investments accounts. Also, if your tax residency status remains unchanged, declaring the bank account you hold in your host country might be compulsory.
To find out more EU banking rules:
Go to europa.eu.