Update (July 2013): One reader has recently reported that the process of opening a non-resident account with DBS seems to have become much harder. They were able to do so, but only after challenging an initial rejection. It’s unclear whether this is a one-off problem or a sign of a change in policies, so be prepared for potential problems.
Another reader reports that UOB are willing to open an account, but require a letter of reference from your current bank or an introduction from a current UOB accountholder. Feedback from readers on their recent experiences of opening accounts is welcome, via the contact form.
Singapore is a very popular choice with foreign investors looking to open an offshore bank account. It’s a safe and stable country with a very solid financial system, while all account servicing is conducted in English.
Most importantly, it’s extremely easy for non-residents to open a bank account in Singapore. Most institutions welcome non-resident customers of all sizes.
If you are a US citizen or resident looking to open any kind of financial account anywhere outside the US, see this article on the added problems you face. However, at present it seems that most major banks in Singapore will still open accounts for US residents and citizens.
Choosing a Singapore bank
The first thing to do is pick a bank. There are about 30 major banks operating in Singapore, both local and foreign. But it makes sense to look at the three local banks first. These are DBS (which includes the Post Office Savings Bank or POSB), Oversea-Chinese Banking Corporation (OCBC) and Union Overseas Bank (UOB).
The main reason to go with one of these three is that if you decide to open a stockbroking account as well, they will offer quicker, easier and cheaper transfers between your bank account and your broking account via the Electronic Payment for Shares (EPS) system. Citibank also offers this facility, but other foreign banks currently don’t.
In addition, if you plan to be visiting Singapore and using your account locally, the local banks have the most extensive ATM and branch networks.
Of the three, OCBC probably stands out as the best choice. The most compelling reason is that it offers one of the two most comprehensive stockbroking services in Singapore and having your bank and brokerage account together means that transfers between the two are fully automated. Foreign investors usually speak highly of its customer service, especially at the flagship Chulia Street branch.
If you currently bank with a global bank such as HSBC or Citibank, they will often have a presence in Singapore. However, do not assume that moving money between your home account and your Singapore account necessarily be simpler or cheaper even if you keep both accounts with the same firm.
Some banks are improving their global integration, but most remain remarkably bad at it. Check the details carefully if you decide you want to look at opening a Singapore account with your current bank.
What bank accounts can I open?
The conditions for non-resident bank accounts are pretty much the same between all the banks – or were when last checked for this article. You cannot open a current account with a chequing service or a debit or credit card, but you can open a savings account.
You can transfer money in and out of this easily and you can also have an ATM card that can be used at cashpoints in Singapore and abroad. Obviously, you will usually be subject to fees when using cashpoints abroad.
There are no account fees as long as you keep a minimum account balance – typically S$1,000. Personal internet banking came as standard and was completely free with all banks.
In addition to Singapore dollar savings accounts, you should also be able to open term deposits for a higher interest rate. Foreign currency deposits are also available for most major international currencies.
Opening an account in Singapore
Once you’ve picked a bank, you need to go through the account opening process.
Doing this in person is simple and the recommended way if you’re taking a trip to Singapore anytime soon – and if you’re not, perhaps you could plan one anyway. That may sound excessive, but for added confidence in any offshore bank, it’s never a bad idea to see the country and meet your account representative face to face.
To open an account in person, you will need to go to one of the bank’s customer service centres. You do not need to book an appointment – just turn up, take a ticket and wait your turn.
As a visitor, it makes sense to go to the financial district, where all three local banks have a branch very close to the Raffles Place MRT. DBS is on Malacca Street, while OCBC and UOB are on Chulia Street. Most other major banks also have a branch in the same area.
You will need your passport as proof of identity, plus a proof of address (for example a bank statement or utility bill). You may also require either a letter of reference from your bank abroad or an introduction from a current accountholder at the bank you have chosen. Reportedly, some of the global banks also want proof of your taxpayer number or national insurance number in your home country, although the local banks have not asked for this in the past.
Obviously, before you travel to Singapore, you should check with the bank that the rules haven’t changed and no further information or documents are needed.
You will also need the minimum balance (typically S$1,000) to pay into your account. If your ATM card works abroad, you could withdraw this from an ATM in Singapore, otherwise change cash in advance.
There are no capital controls in Singapore. But you have to make a customs declaration if you are bringing more than S$30,000 in cash or bearer instruments into the country. In any case, doing an electronic transfer subsequently for large amounts usually makes more sense than carrying it on your person.
And that’s essentially it. You will be assigned an account representative, complete the forms and pay in your deposit. With most, you will be given an ATM card on the spot. Statements will be sent to your home address abroad.
If visiting Singapore in person is out of the question, you may be able to open an account by post, depending on which bank you plan to use. You will need to check with the bank exactly what they require, but it will involve having the forms and a copy of your passport verified by a lawyer or notary in your home country.
Banks that have branches in your home country will sometimes help you open overseas accounts. So if you are unable to visit Singapore, this may be the one reason to use a global bank such as Citibank or HSBC.
Doing this is clearly more paperwork and bank staff definitely express a preference for opening accounts in person if possible. Recent reports from investors have been contradictory on whether either of the three local banks will allow accounts to be opened by post.
Paying in funds from abroad
When you want to pay more funds into your Singapore account, you can do so by international transfer. Your bank will give you its SWIFT number and all the details you need to quote and you provide those when arranging the transfer.
You should be able to do this from your home bank account via your bank. But you may get a better exchange rate and lower fees by using a specialist currency transfer service, as discussed in this article.
A transfer will typically take 3-10 days to arrive depending on how efficient the firm handling the transfer is. Singaporean banks using make a small charge on receiving a money transfer. The typical fee is S$10.
To withdraw small amounts from your account, you could of course use your ATM card. For larger amounts, your Singapore bank will be able to arrange a transfer out to your home account.
Again, you will be charged for this. And again, you could look at using a currency transfer firm (among the ones listed in the article above, WorldFirst has operations in Singapore) to see if they will do it more cheaply.
However, the cost and speed of international transfers is still sufficiently poor that it isn’t worth transferring money back and forth frequently. It’s sensible to work on the basis that any money placed in an offshore bank account as staying there for a long time.
How safe is my money in Singapore?
Singapore has a very stable and well-regulated financial system. Banks are regulated and monitored by the Monetary Authority of Singapore (MAS), the country’s central bank.
In terms of depositor protection, Singapore dollar deposits in a full bank are insured up to a limit of S$50,000 by the Singapore Deposit Insurance Corporation (SDIC). Note that foreign currency deposits are not insured.
The three local banks are extremely solid. Only one is partly state-owned: DBS, via sovereign wealth fund Temasek. But it seems highly unlikely that the government would allow any of them to fail with significant losses for account holders even beyond the SDIC limits. The same support would perhaps not be extended to local arms of non-Singaporean banks, so if you are concerned about this, it provides another reason to choose the local banks.
For what it’s worth these days, Singapore’s government has the top AAA credit rating from all major ratings agencies. Perhaps more relevantly, it has a long track record of prudent and conservative fiscal policies.