International Money Transfer Regulations Explained

Why do international money transfers need to be regulated?

Enormous sums of money are transferred internationally every day for a number of reasons. For example, in 2019 alone, migrants sent a record-breaking $554 billion to their home nations. Both senders and recipients need to be confident that the transaction will be completed as planned and that the funds are secured and received in full. This is why customers should only use international money transfer services that are regulated by the relevant authorities.

Regulations ensure that international money transfers are conducted lawfully, helping to prevent transactions associated with fraud, money laundering and the funding of illegal activities. Customers can also place more trust in services overseen by regulatory bodies, as financial institutions must meet the strict standards they’ve set to protect consumers.

How can you tell if an international money transfer provider is regulated?

Anybody sending or receiving an international money transfer should only arrange such transactions with financial institutions that are authorized by the regulatory body of the relevant country. The same applies to financial institutions and businesses that are looking to partner with a fintech that can streamline their cross-border payment processes.

All regulated financial institutions should have the relevant information displayed on their websites. Usually, this will be in the footer, though some websites may have a dedicated section providing additional details. For example, here at Inpay, all our regulatory information is available on our compliance page. If such information isn’t clearly visible, this is a sign that the financial institution may not be trustworthy.

What are the international money transfer regulations around the world?

Generally speaking, senders and recipients will need to provide documents confirming at least some of the following details:

• Payment purpose
• Relationship between sender and recipient
• Date of birth
• Address
• Occupation and business
• Nationality and place of residence
• Bank details
• Source of funds for remittance

If the transaction is between companies rather than individuals, documents such as contracts, invoices, transportation documents, identification documents, and accounting materials will also need to be submitted.

While this information is required to comply with the regulations of virtually every country, some countries have their own rules when it comes to funding limits and other elements of the international money transfer process.

Japan

International money transfer limits

There are no limits on how much money can be sent to Japan. However, extra measures are in place for particularly large amounts:

• Additional identity documents, like a driver’s license or insurance card, must be provided for transfers exceeding ¥2 million. The transaction will be monitored by the Bank of Japan.
• A report must be submitted to the Minister of Finance for transfers exceeding ¥30 million.

That said, banks and remittances services will have their own limits, either per transaction or per day. Remittance services usually set the top limit of ¥500,000-1 million, while banks tend to increase this to ¥1-10 million.

OFAC (Office of Foreign Assets Control) regulations

All remittances in US dollars are subject to OFAC regulations in Japan when:

• Iran, the Republic of Sudan, North Korea, Syria and Crimea are associated with the transaction.
• The transaction involves Myanmar, the Ministry of Defense, the military or other armed organizations.

However, Japan may not accept the remittance procedure regardless of how legitimate the purpose is.

India

International money transfer limits

Indian residents

Outward remittances from India are currently limited to $250,000 per year, provided the transaction is for a permitted reason such as paying for medical treatment abroad, covering overseas education fees, or supporting family members who live in a different country.

For inward remittances, there are two possible routes with different limitations:

• The Rupee Drawing Arrangement (RDA): No maximum limit on personal transactions, but there are caps on inward business remittances.
• The Money Transfer Service Scheme (MTSS): A maximum of $2,500 per transfer, and 30 transfers to a single recipient in a year.

 In both cases, funds can only be transferred by regulated agents and must include a Foreign Inward Remittance Certificate (FIRC), which proves the money comes from a legitimate source and is legally compliant.

Non-resident Indians

The rules for non-resident Indians (NRIs) depends on the type of bank account:

• Non-Resident External (NRE): For NRIs who earn abroad and remit to India to hold as savings in rupees, before transferring money back to the country of residence.
• Non-Resident Ordinary (NRO): An Indian rupee-denominated account typically used by non-residents who have earnings in India such as rent, pensions or dividends.
• Foreign Currency Non-Resident Bank Account (FCNR B): Foreign exchange account for NRIs to transfer money and limit currency conversion risks.

NRE and FCNR transactions have no limit but there are restrictions over the sources responsible for the fund. NRO accounts have fewer rules but a maximum of $1 million can be remitted abroad from India per year.

EU

International money transfer verification

The personal information provided may need to be verified using documents such as passports, driving licenses, or other papers issued by a government department. This is necessary if:

• Any part of the transfer is funded by cash or anonymous e-money.
• The transfer value is €1,000 or more. This includes multiple transactions which appear to be linked and add up to €1,000 or more.

Verification is also required for regular transfers or business relationships, though this will not be necessary for every transaction. Verification will be conducted at regular intervals, depending on how the sender/recipient assesses the risk.

United Kingdom 

International money transfer limits

There are no official limits on how much money can be sent to and from the UK. However, the Financial Conduct Authority (FCA) and HM Revenue & Customs (HMRC) will monitor the transfer and may take action if they have reason to believe it is linked to illegal activity.

Brazil

International money transfer limits

Any amount of money can be imported and exported to Brazil, but transactions over R$10,000 must be declared and additional documents will need to be submitted. This is to confirm the purpose of the transfer and the identities of the parties involved.

South Africa

International money transfer limits

All 18+ South African residents may transfer a maximum of R1 million per year, though there may be further limitations on non-South African citizens living in the country. This is assessed on a case-by-case basis.

International money transfers with Inpay

Consumers need to work with a payment services provider that abides by all the regulations, and so do financial institutions and businesses looking for a partner PSP to facilitate their international money transfers. This is vital to ensure all transactions are safe and secure, and guarantees that they comply with all the regulations set by the relevant countries.

Inpay is licensed and regulated by the Danish FSA and is an authorized payment institution in the EU. Inpay is also fully compliant with national and international AML/CTF and sanctions requirements including the Wolfsberg Group Standards, FATF Recommendations and EU regulations.

In addition to this strong regulation, Inpay provides a superior international money transfer service by offering fast, low-cost transactions. Cutting-edge technology allows customers to make fast, low-cost cross-border payments to 100+ countries.

Get in touch now to discuss how Inpay can reduce the cost and time of cross-border payments.