Before Making A Money Transfer Know What The Restrictions Are Sending money abroad is not as complicated as it was a few decades ago but you should...
Before Making A Money Transfer Know What The Restrictions Are
Sending money abroad is not as complicated as it was a few decades ago but you should be aware that many governments worldwide impose restrictions on foreign exchange payments and on possession of foreign currency. These restrictions can apply to local residents or non-residents alike and knowing the local legislation will help you avoid unnecessary complications. Of course, it is hard to be acquainted with the local laws and regulations in detail; therefore, taking a good advice from an expert specialising in money transfers is more than advisable.
Various forms of foreign exchange controls exist but you do not have to know all the details of a particular foreign exchange regime. The important details related to money transfers include: whether a restriction on the amount of currency that is transacted is in force and is there a restriction on who can conduct foreign currency exchange deals (in some countries only state or government-approved companies can be engaged in the exchange of foreign currency). A stricter form of a foreign exchange control can impose restrictions on the use of possession of foreign currency.
If your money transfer is to be processed by a state-controlled foreign exchange dealer, there is a greater chance to get an unfavourable exchange rate or to be subject to additional fees and commissions. A form of a special currency regime is the currency board but the existence of such a monetary authority protects and supports the local currency so it is in advantage to a foreign currency sender in general.
At this stage you must turn to a reputable money transfer specialist who is familiar with the local specifics of the beneficiary’s country. Unfortunately, the number of countries where strict exchange controls are in force is constantly changing in the process of globalisation and economic liberalisation. Some major countries, which still exercise some kind of foreign exchange controls, include Argentina, Brazil, China, Egypt, India, Malaysia, Morocco, Nigeria, Tunisia and Venezuela. However, this list is largely incomplete and you will need to delve into the specific type of foreign currency regime in force for that particular country. Your money transfer expert will provide you with a more populated list of countries and will be able to explain to you all the details related to a certain country.
A complicated situation can occur when a country allows only “reasonable” foreign currency transactions to be conducted. “Reasonable” is a flexible term and unless explicitly specified it will be up to a government official or a designated state body to decide what amount of foreign currency money is a “reasonable” sum. Although only a few countries impose such a restrictive foreign currency regimes, they still exist and you must consider it before sending funds to such a country. Growing number of world governments liberalise foreign currency exchange regulations but taking an expert advice will help you familiarise with all applicable regulations.
Dr Timothy Ross is an expert on the financial markets. Recommendation: If you need to make a large or regular overseas payment consider the help of a money transfer specialist as an alternative to your bank.
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