Buy property in Taiwan and/or (Timeframe: a few months to a year maximum)
Invest in my own enterprise (ongoing expense over years, so will probably need to hold some quantity of USD)
Buy a car (probably second hand, looking for a manual transmission, fuel efficient/low maintenance car, at least 1.6L)
Constraints:
Minimize number of times the currency is converted (hence fees)
Minimize erosion due to inflation
Minimize losses due to devaluation of the denomination being held
My source currency is neither USD or Euro so I will probably have to change my currency at least once.
Questions:
Are purchases of property in Taiwan always done with NTD, or is it sometimes done with foreign denominations? If so, which ones?
Is it possible to do some large-ish domestic transactions in Taiwan in say USD?
I am free to choose to convert my money to USD or Euros now. Given my goals and constraints, which one should I convert it to?
For the past few years, I decided the R&D equipment purchases for my research. Although I could buy from US or European suppliers, I’ve always bought from Mainland China because they are often much cheaper than US/European ones. Chinese suppliers always ask for USD.
Is it better for me to wait until I come to Taiwan, open a Taiwanese bank account, and then convert my foreign denomination directly to NTD?
Is it easy to open a foreign currency account in a Taiwanese bank?
How do you expect the NTD to do in the foreseeable future? I note it has fallen from 1 NTD = 0.36 USD in Feb 2022 to 1 NTD = 0.31 USD now (Oct 2022).
What sort of exchange rate fees are we talking about to convert USD/Euros ↔ NTD?
Similar to my previous thread:
But in this case I believe my purpose of bringing the money in now is clearer - it is to buy property and/or invest in a start-up, and not hold cash. High inflation has made it undesirable to hold too much cash.
Also note that transfers in USD from a Taiwanese FX account to another Taiwanese FX account are executed over the Swift network, with substantially higher fees than a domestic NTD transfer. If you buy a house, the fees are probably minor compared to the overall transaction value, but this is not something you want to do on a regular basis if the objective is to minimize fees.
That is not technically true, it depends on the situation. There is actually a local USD clearing facility (as also EUR, JPY, RMB (CNH) and AUD) called FISC, so if both the sending and the receiving institution participate to FISC for USD, the USD will be routed domestically with either a small or no additional fee at all with intraday transfers.
Pardon my ignorance, but will I get an ARC on arrival with a Gold Card?
@rooftopclown & @mataiou - again sorry for asking perhaps an obvious question but in the days of encrypted communications, why is the SWIFT banking system necessary?
I am curious of this also. I’ve done some B2B transactions here in USD and have always been charged the same fee as wiring international.
To answer original questions. I would wait to come to Taiwan, open an account (at the same time open a currency account), then wire the money in directly from your home country, make sure you are able to do it online before leaving). I would not expect to do any transactions in anything else than TWD in Taiwan except for machines and stuff you might buy abroad. If you wire money to your currency account you can actually negotiate with the bank on the exchange rate when you want to change it to TWD but this means of course changing the currency from your own to USD / EUR / What ever you choose to keep it as. I get better rates here than anywhere else I do business in the world (bank margin is smaller) but of course there is a loss each time there is an exchange. Wire fees are set and if you are talking of amounts to buy a house they are pretty much no relevant.
Anybody telling you where the currency is headed is just guessing.
SWIFT is just a standardised way for banks and other FIs to communicate in a reliable way the instructions to move the funds via the nostro and vostro accounts, a compensation method.
In order for a bank to send a transfer abroad, you need intermediary relationships, like to send USD from Cathay United to HSBC in HK for instance, Cathay will communicate via SWIFT to most likely JPMC to debit the account they hold in the US and credit the account HSBC HK holds there. If HSBC HK does not have an account at JPMC, then JPMC will need to find a common intermediary between them and HSBC HK (most likely HSBC US) and credit HSBC US account at JPMC, then HSBC US will credit HSBC HK account at them, which then HSBC HK will debit and then finally credit the beneficiary account at HSBC HK. Quite a process.
SWIFT is the standardised communication form which everyone recognise and knows how to deal with, that’s it.
It all depends on the situation, both remitting and receiving institutions needs to participate to FISC and have direct Relationships with each other. Below a screenshot from HSBC TW tariff table (the best in English) which clearly shows the different scenarios:
Also very stupid that for HSBC TW you need to either go to the branch or call the hotline to make a FISC USD transfer… Their system is very shabby, so bad, the UI is the same as all other HSBC in the world, yet the backend is like 80s…
Thank you for your advice. Unfortunately the banking practices in my country of origin are pretty bureaucratic and cumbersome - large cash transfers can only be effected in person at a branch.
Which means I will have to return to the country of origin, after opening a Taiwanese bank account, to effect the transfer.
I am checking to see if I can leave instructions and fill out all the necessary paperwork to do the transfer, once I have a Taiwanese bank account, but I am not optimistic that some “But…” will not get me. As an example all the clerks in the bank I spoke to about it* assured me that I can do USD transfers via Internet Banking. After checking myself, I can do only USD transfers to another bank account held within the same bank, not cross-border.
*I asked multiple people because of prior bad experiences of being told something that wasn’t possible to do (e.g. your card is activated to work internationally. I go abroad and while on holiday, my card doesn’t work).
Great, so the wire fees don’t operate by a percentage
Before you leave your home country, transfer your money to an online international bank account like Wise, then after you have opened your Taiwanese bank account, send it there all from your phone. There are also about ten other ways you could do it.
There are still lots of advantages for using Wise in Taiwan. OP could just send from Wise to his Taiwan bank account in USD via SWIFT, and then have the bank convert it TWD at whatever (usually great) rate they are offering. Better yet he could ope a USD account at a Taiwanese bank and then not deal with any currency conversion.
