Rules on overseas remittances
What are the rules about foreign exchange and overseas remittance?
~ Won Dollar
Dear Won Dollar,
All foreign exchange transactions are governed by the “Korean Foreign Exchange Law” and the “Korean Real Name Law”. All banks are required to follow these rules.
The rules for outflow of Korean won (KRW) are quite strict because the Korean government monitors and controls the outflow of KRW very carefully. Each person is only allowed to exchange up to and including $10,000 USD (or equivalent) of KRW per sojourn in Korea. To exchange more than this, you must designate the bank branch as your primary foreign exchange transaction bank and submit proof of the source of income.
Basically, you should always have your passport with you for ANY foreign exchange transaction. That is the bottom line.
If you want to exchange more than 1 million KRW into a foreign currency, you MUST have your passport with you and the teller MUST write down the transaction amount in your passport. However, if you want to exchange less than or equal to 1 million KRW into a foreign currency, the teller has the authority to do the transaction with just your ID number (passport OR Alien Registration Card number). S/he may not need to see your actual physical ID, just the number can suffice.
Foreign residents can transfer up to $50,000 USD (or equivalent) overseas per year although, 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). To avoid this hassle, you can just use online banking (up to the $50,000 USD limit). In actuality, you can send as much as you want (at a bank teller counter) as long as you can prove the source of income is legitimate (by submitting tax returns or other official documents).
The $50,000 USD (or equivalent) limit is a federal regulation governing all overseas remittance; it is the same for ALL banks in Korea regardless if you make the overseas remittance in person, online, or automatically.
Please note that you will need to designate the bank branch as your primary foreign exchange transaction bank (once) and show your passport every time you want to remit money.
Primary Foreign Exchange (FX) Transaction Bank Designation:
You must designate just one bank branch to be your primary FX transaction bank. You can have bank accounts at many banks, but you may only remit money overseas or exchange more than $10,000 USD (or equivalent) at one bank (any branch of that one bank). Once you designate one bank branch as your primary FX transaction bank, no one (at any of your bank’s branches) will stamp your passport when remitting money overseas, but it will still get stamped if you exchange more than 1 million KRW into a foreign currency.
Primary FX transaction bank designation is actually an easy process that just involves filling out a form. The teller will then contact your previous bank (if you have one) to let them know you have switched your designated bank.
(Submit your banking questions to firstname.lastname@example.org)
“Dear Michelle: Banking Advice for Foreigners in Korea” is a monthly column written by Michelle Farnsworth. Michelle is an 8-year resident of Korea who is currently the Foreign Client Relationship Manager at the Shinhan Bank Seoul Global Center – the only bank branch in Korea that is exclusively dedicated to serving foreigners and foreign companies. Please visit the “Shinhan Bank Seoul Global Center” on Facebook for more information. Also, please note that the banking information provided in this column is based on Shinhan Bank policies and may not be applicable to all banks in Korea.