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Can You Open a Multicurrency Bank Account in Singapore? And Why You May Need It for Your Business?
Can You Open a Multicurrency Bank Account in Singapore? And Why You May Need It for Your Business?
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Can you open a multi currency bank account in Singapore? And why you may need it for your business?
The nature of your business is vital to the choice of your company bank account. If it would entail international transactions, opening a multicurrency bank account would be the most logical thing to do.
A multicurrency bank account lets one receive, send, and keep money in various foreign currency accounts through one service provider. It also allows companies to manage their own currency exchanges when making payments.
This article will help you determine if you can actually open a multicurrency bank account for your business in Singapore, as well as the importance of doing so.
Why Is SGD the Presumed Currency of a Bank Account in Singapore?
When one opens a bank account in Singapore, its default account currency is normally presumed to be in Singapore dollars (SGD). If your business is operating in Singapore, then your incoming payments would be in the SGD currency in most circumstances. However, this may not always be the case.
For example, there is a company that is into importing and exporting products. This business is an essential exporting establishment; hence, its default currency will be in US dollars (USD). If a business is importing something from China, then the payment has to be done in USD. Similarly, if another company is exporting products (e.g., to India), then the payment has to be received in the bank account in USD as well.
Picture This
We have listed here three transaction amounts: $100,000 USD, $50,000 USD, and $75,000 USD. When you receive this money into your bank account and if your account is not in USD (e.g., it is in SGD), then every time a remittance is received, the bank would convert the money into SGD at the bank’s exchange rate.
In most circumstances, the bank exchange rate is possibly the worst rate available in the market. Thus, the most disadvantageous rate is what you will get in this conversion. You do not also have any control on such conversion because the bank is performing it due to your existing account, which is in SGD.
Another Scenario
Let’s presume that the market exchange rate is slightly higher as indicated. In this case, for each of the transaction, you will incur a loss because of the conversion in SGD (which would be $200 SGD, $275 SGD, and $875 SGD). The total loss in a month based only on these three transactions would be $1,320 SGD.
Be reminded that only three transactions were shown and outgoing transactions and other services have not been covered yet. Furthermore, the spread difference is also very small. In reality, this difference can be large.
What Do These Examples Mean?
Apparently, if a remittance is received or a payment is made in the currency that is not the bank account currency, then one can lose a significant amount of money because of the constant conversion that happens at the bank rate. To avoid this and to answer the main question of this article, one can open a multicurrency corporate bank account in Singapore. The idea here is not to allow banks to conduct any automatic conversion; instead, keep the control with you.
Open a USD bank account, receive everything in USD, and convert the required amount only, which you might possibly need to pay for your Singapore expenses.
The Next Question: How Can You Open a USD Bank Account?
Generally, what we would recommend is if the transaction amount in anather currency is more than $10,000 SGD/month or equivalent, then you should open a multicurrency bank account in a currency in which you mostly operate. Thus, you must open a SGD bank account, plus another currency account.
When opening your bank account, inform the bank representative what additional currency accounts you wish to open. Upon the opening of this account, there will be one account for SGD and another account will be open for USD or whatever currency you have chosen. In single internet login, you will be able to access two or different currency bank accounts.
What Currencies are Possible for a Multicurrency Bank Account?
Let’s have a look on the DBS website. Search the DBS business banking pricing guide to obtain the latest pricing guide of the DBS bank and ensure that it is intended for the corporate customers. Foreign currency accounts will then be shown and the currencies in which they are available. The guide will also show the minimum and fall-below fee, minimum interest charge, and more. You can check for other data, too.
To date, the available currencies for a DBS multicurrency bank account are AUD, CAD, Swiss Franc, Chinese Yuan Renminbi, Euro GBP, Hong Kong dollars, Japanese Yen, Norwegian Krone, Thai Baht, New Zealand dollars, Swedish Krona, and US dollars. Perhaps, the situation with OCBC and UOB will also be the same and they will be offering more or less similar currencies.
The Bottom Line
The trade of international goods and services is general practice for most enterprises. As a result, receiving and sending money in several currencies would be of their best interest. One of the most effective means to achieve this is to open a multicurrency bank account for your company, especially in Singapore where foreign businesses continue to prosper.Foreigner Package
New Company Setup
S$2,400
Local Package
New Company Setup
S$1,100
Transfer Package
Existing Company
S$1,000
Singapore Branch
New Branch Setup
S$4,000
Representative Office
New Setup
S$2,500
BVI Company
Singapore Bank Account
US$2,200
