New in Town? 8 Crucial First Steps for the Singapore Expatriate

Business travelers at airport.

Moving to another country can be a harrowing experience, especially when it comes to your finances. The good news is that Singapore is the financial hub of Asia – whatever services you need, you can find the best providers in the world. Just make sure you cover this checklist of key factors:

One of the first things you might want to do, if you have multiple bank accounts back home, is to consolidate them. Having multiple bank accounts makes tracking your money a needlessly complicated process, especially if you will be sending money to and from home. It is also easy to end up incurring more fees by accident.

It would be ideal to have one account with an international bank, and one more with a Singaporean bank. An international bank is usually better for remitting money – foreign exchange rates and transaction fees tend to be lower.

However, you also need a Singapore bank account for GIRO payments and cash access. Local banks have more ATMs across the island. If you only use an international bank, you may find yourself travelling to another neighbourhood just to make a withdrawal.

Ensure you have set aside funds for any minimum deposits. This is important for opening bank accounts, housing (1 or 2 months rental deposit), car rental, school fees for children, and utility bills.

If you or your family constantly travel between countries, you should consider getting a global insurance policy. This will be valid wherever you decide to settle, and it is often cheaper than constantly changing policies each time you move.

If your employer provides health insurance, check the extent of the coverage. Medical costs in Singapore are quite high – it’s not on the same level as the United States, but even a few days of hospitalisation can result in a bill that exceeds the pay outs. Have your employer send you the details on paper.

If you have an existing life insurer, remember to inform them that you are moving. You may have to find a new insurer, if your policy will be rendered void by the move.

If you retain your family home, check the rules on property taxes. Some countries allow a tax-free window, during which time you need not pay property taxes. After that it is considered an investment property, and may be subject to different taxes.

Do not forget to double check your tax obligations if your property will be rented out, or if you allow others to stay in your family home.

Get legal advice to confirm your will is valid in both your home country and in Singapore. Should you and your spouse pass away whilst in Singapore, your children may be placed under the care of the local authorities. It is best to appoint a temporary guardian as this could be for a long time if the legalities are too complex to work out, so make sure everything is in order.

Singapore has one of the lowest income taxes in the world. However, do note that certain sources of wealth, such as the exercise of stock options, may fall under taxable income, even if the country does not have a capital gains tax. Speak to a financial planner for advice that is specific to your circumstances and assets.

Do check if you are still obliged to pay taxes at home, and consult a tax specialist to minimise unnecessary tax payments.

As a rule of thumb, you should maintain an emergency fund of around three to six months of your expenses. This reduces the need to resort to loans in the event of emergencies, and can help to maintain your lifestyle in the event of unplanned issues like retrenchment or a reduced housing allowance.

If you want to play it safe, you may want to save even more (e.g. eight months of your expenses), as you may occasionally have to fly home to deal with emergencies.

If you are constantly transferring money home, exchange rate risk can become an issue. You don’t want to end up losing significant sums every time the local currency falls, or your home currency strengthens. The simplest way to minimise the impact is to have a Forex broker, who will almost always get you better exchange rates than the bank.

There are banking services that offer low currency exchange rates to cater to expatriates. You should consult a financial planner who can highlight the better deals – it would take a long time to go through them manually, as Singapore has over 120 banks and financial institutions.

Singapore is a country that provides significant opportunities to grow your wealth.

This is a dynamic country, with a fast paced business and financial services sector. The sheer number of financial products, many of which change frequently, can be overwhelming to newcomers. This is why it is crucial to prepare clear financial goals, and to seek trustworthy advice. Having the right help in Singapore positions you to seize the best advantages Asia can provide.

Rebecca Regan
Senior Vice President -Wealth Advisory & Protection
AAM Advisory Pte Ltd

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