FX and International Banking from Korea
Overseas Remittances are permitted for both foreign residents and visitors to a maximum of $50,000 USD (or equivalent) per year. You may be asked to provide proof of the source of income, at the banker’s discretion, or when sending anything over $50,000 USD (or equivalent). Foreign residents (with Alien Registration Card) can avoid the hassle by just remitting money overseas online (up to the $50,000 USD limit). Foreign visitors are unable to register for online banking. You will have to designate a specific bank as your Primary Foreign Exchange Transaction Bank before you can remit money overseas.
Exemption from Mandatory Reporting: Currency exchanges or remittances of under $1,000* do not have to be reported. Exchanges of $1,000 or more can only be done in a bank are not allowed in Currency Exchange locations. Whether it's a currency exchange or remittance, the teller will stamp the amount in your passport.
*Note that the Finance Ministry announced in July 2014 that it is reviewing plans to ease regulations on cross-border remittance and is considering raising the amount exempted from mandatory reporting to under $2,000.
To send money overseas, it is necessary to designate a specific bank as the one you will use for these transactions (if you have an account in more than one bank). There is a specific form you must sign to do so. It is possible and relatively simple to change your designated bank. You'll need to inform the original bank (in person) and then sign the required document in the bank you now wish to use. Note that not all banks (or branches of the same bank) will provide international access to all foreign account holders, while others will do so without requiring you to sign any exclusivity agreement. Shop around -ask questions and then decide.
Remittance Accounts: Some banks offer a direct remittance account service. When you want to transfer funds to an overseas account, you can deposit or transfer the funds (in Korean won) into a remittance account, to which all necessary remittance details such as the recipient’s name, bank name, and account number have already been inputted. As soon as the funds are deposited, the remittance is activated and processed. This eliminates the need to go to a branch to make the transfer. The remittance account is for a specific receiving bank account but it is possible to have more than one remittance account if you are sending money regularly to different people/accounts.
Conditions re foreign currency exhange (taking cash): Foreign residents can only take W10million in cash. You will have to show your passport to the teller, who will likely stamp the back page and write in the amount you are taking. If you would like to exchange more than $10,000 USD worth of KRW into a foreign currency, you will have to designate a Primary Foreign Exchange Transaction Bank and provide proof of the source of those funds.If you are earning money legally in Korea, you can exchange as much of it into another foreign currency as you would like - with the appropriate documentation.
Overseas Internet Banking is now available for foreign nationals residing in Korea with some banks. You will have to register with a specific bank in order to access this service - same as for overseas remittances (same bank for both). Once you've done so, you'll be eligible to move money from your designated Korean foreign exchange bank (08) for international transactions. Note that all Internet transfers will count toward your USD50,000 cap, just as credit card transactions and direct remittances are. Foreign visitors are ineligible for this online banking service.
Overseas Access via ATM to Korean Bank Accounts by Foreign Account Holders can be blocked by the banks so that foreigners cannot access their Korean bank account from outside the country.
Unless there is some particular reason why your account would be blocked, you can access your funds from outside Korea by requesting an international access card from your bank. (Most will not issue an international access card unless you specifically request it). Note: around 2006-2007 foreign account holders travelling abroad suddenly discovered they no longer had access to the money in their Korean bank accounts from outside Korea - there had been no prior warning that this new policy had been instituted. For this reason, foreign nationals depending on access to funds in Korea while travelling may want to also have an alternate option.
There is a limit of W1million per transaction (W6million per day) for withdrawals from your Korean bank account from an overseas bank. Check with your bank to find out what the fees will be (banks have different rates and the fees vary depending on the country from which one makes the ATM withdrawal).
Foreign Currency Exchange
The Korean won is pegged to the USD and since 2008 has been extremely volatile. There are some countries that will exchange KRW for their local currency, but generally you have to change KRW into USD and then into the local currency when you arrive, which adds an additional cost to travelling for foreign residents in Korea.
FX rates do vary from bank to bank, so shop around. In Korea, the foreign exchange shops sometimes offer better rates than the banks, but not always. The airport is not always the best place to exchange money either from or into KRW. Hotels in Korea generally offer the least favourable rate.
Buying the foreign currency you need should be done a few days before you travel. Banks generally keep only a limited amount of foreign currency on hand and sometimes have to order what you need, which can take a day or two. This is especially true for currencies other than the USD, but also applies to greenbacks if the amount you need is more than a few thousand. Banks can exhange a wide range of currencies, but the currency exchange shops are generally limited to one or two (USD and Japanese Yen).
Reducing the high cost of transfering money overseas is possible. Wire transfers can be expensive, especially if both the sending and receiving banks are charging you (or the recipient at the receiving end). One way of reducing costs is through a 'bank certificate or bank cheque'. Fees can vary a little, but should fall around the following: to send less than USD500 the cost is W5000, USD500 to USD2,000 the cost is W10,000 while a remittance of USD2,000-5,000 is W15,000. The person/enterprise receiving the bank 'certificate/cheque' may have to wait 30 days to retrieve the cash (similar to a foreign cheque) and they would receive it through by mail so it would take a little longer. But this is a less expensive way of sending money overseas - note that most credit card companies will credit you with payment as soon as they receive their 'cheque'. Basically, banks treat these in the same way they would a cashier's cheque.
From foreign currency into KRW (buying won in cash): For anything less than or equal to USD20,000, you show your passport to the teller. To exchange a foreign currency worth more than USD20,000 into KRW, you also have to have a “Declaration of Currency or Monetary Instrument Certificate”* that you received from the Bank of Korea (“대외지급수단매매신고서”) or that you received at the customs office at the airport (“외국환신고확인필증”) when you declared that you were carrying more than USD10,000 into the country with you.
*In Korean this Declaration of Currency or Monetary Instrument Certificate is either called a 대외지급수단매매신고서 (Daewae Jigeup Sudan Maemae Shingoseo) or a 외국환신고확인필증 (Waegukhwan Shin-go Hwak-in Pil jeung) depending on where it was issued.
K4E Editor: We try to make the information on Korea4Expats.com as complete and accurate as possible, so if you notice any errors or omissions in the content above, please let us know at email@example.com
Last Updated on 2014-09-03
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