Planning on moving to Singapore? Relocating takes a lot of work, including any financial and legal issues you need to sort out. There’s choosing a new local bank, getting insurance coverage, checking the validity of your will, and finding out how the country’s tax system works, to name a few. So, here’s a list of key items you need to think about before you move, or shortly after arriving.
#1 Pick the right bank early on
If you have multiple bank accounts back home, it’s best to consolidate them. Having multiple accounts makes tracking your money more complicated than it has to be, especially if you’ll be sending money to and from home.
If you’re moving to Singapore, it’s ideal to have just one account with an international bank and another one with a Singapore bank. You’ll also need a Singapore bank account for GIRO payments and cash access. Local banks have more ATMs, so if you only use an international bank, you may find yourself looking high and low for a machine to make a simple withdrawal.
#2 Set aside funds for deposits
Have sufficient funds on hand for any deposits you may need to pay, such as opening bank accounts, housing (typically one or two months’ worth of rent), utilities, car rental and school fees for children.
#3 Ensure you are sufficiently insured
For families that constantly travel between countries, consider getting a global insurance policy that will be valid wherever you decide to settle. It’s often cheaper than changing policies each time you move.
If your employer provides health insurance, check the extent of the coverage. Medical costs in Singapore are pretty high – just a few days in the hospital can result in a bill that exceeds the payouts. If you have an existing life insurer in your home country, remember to inform them that you are moving. You may have to find a new insurer if your policy will be made void by the move.
#4 Work out your property taxes
If you retain your house back home, check the rules on property taxes. Some countries allow a tax-free window. After that, it’s considered an investment property and may be subject to different taxes. Double check your tax obligations if your property will be rented out or if you’re having others to stay there.
#5 Ensure your will and Power of Attorney are valid
Get legal advice on the validity of your home country will and the need for a Singaporean one. Should you and your partner pass away while in Singapore, your children may be placed under the care of local authorities. It’s best to appoint a temporary guardian as this can be for a long duration if the legalities are complex to work out.
#6 Check your income tax obligations
Singapore has one of the lowest income taxes in the world. However, certain sources of wealth, such as the exercise of stock options, may fall under taxable income even though the country doesn’t impose capital gains tax. Get the help of a financial planner who can provide advice that is specific to your circumstances and assets. Also, check if you’re still obliged to pay taxes at home. If possible, consult a tax specialist about these to minimise unnecessary tax payments.
#7 Have an emergency fund
As a rule of thumb, maintain a back-up fund of around three-to-six-months’ worth of expenses. This reduces the need to take up loans in the event of emergencies and can help to maintain your existing lifestyle in the event of circumstances like retrenchment or reduced housing allowance. If you want to play it safe, you may want to save even more as you may occasionally have to fly home due to unforeseen emergencies.
#8 Find a forex broker
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 when your home currency strengthens. To minimise the impact, get a forex broker who can typically get you better exchange rates than the bank.
There are also banking services that offer low currency exchange rates. With over 120 banks and financial institutions in town, it’ll take a long time to go through them on your own. To save the trouble, you can consult a financial planner who can suggest the best deals to consider.
Moving to Singapore and need some advice?
If you would like to discuss any or all of these areas, email Audrey at audrey.mitchell@aam-advisory to arrange a complimentary consultation with an AAM Advisory financial advisor representative (MAS authorised).
Written in collaboration with AAM Advisory
Read more about living in Singapore.
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