What Is an Overseas Settlement Money Transfer? Legal Regulations and Legitimate Sources of Funds

Overseas settlement money transfers are increasingly common among Vietnamese citizens who are applying for foreign citizenship or planning to settle abroad long-term. Unlike transfers for family support or inheritance, overseas settlement transfers often involve substantial amounts linked to assets accumulated in Vietnam and are therefore subject to foreign exchange regulations. This article explains the concept, legitimate sources of funds, and how to choose a suitable bank for an overseas settlement money transfer.

1. What Is an Overseas Settlement Money Transfer?

An overseas settlement money transfer refers to a resident Vietnamese citizen purchasing, transferring, or carrying foreign currency abroad for settlement purposes, when the individual is applying for or has obtained foreign citizenship, or has been legally permitted to reside long-term in another country.

Under Article 7 of Decree No. 70/2014/ND-CP, which provides detailed guidance on the implementation of certain provisions of the Ordinance on Foreign Exchange and the Ordinance Amending and Supplementing Certain Provisions of the Ordinance on Foreign Exchange, "transfers for overseas settlement" are one of seven permitted purposes for one-way transfers by resident Vietnamese citizens. Other purposes include overseas education, medical treatment, business trips, tourism, fee payments, financial support for relatives, and inheritance transfers.

This activity is currently governed in greater detail by Circular No. 20/2022/TT-NHNN issued by the State Bank of Vietnam, which took effect on February 15, 2023. The Circular specifies the documentation requirements and responsibilities of authorized banks when processing one-way transfers abroad.

For overseas settlement purposes, the law does not prescribe a single fixed maximum limit applicable to all cases. The amount that can be transferred is determined based on the value of assets legally accumulated in Vietnam by the person settling abroad before acquiring foreign citizenship or being granted permission to reside overseas, together with the supporting documents required by law. (Pursuant to Clause 6, Article 13 of Circular No. 20/2022/TT-NHNN.)

2. Differences Between Overseas Settlement Transfers and Regular Financial Support Transfers to Relatives

Although both fall under unilateral transfers under Article 7 of Decree No. 70/2014/ND-CP, overseas settlement transfers and financial support transfers to relatives have different legal purposes and requirements.

2.1. Purpose and Basis for Determining the Transfer Amount

Financial support transfers to relatives are intended to provide financial assistance, either regularly or occasionally, to relatives legally residing overseas. They do not apply to relatives who are temporarily abroad for education, medical treatment, business trips, or tourism. The amount of financial support is generally assessed by the authorized bank based on the customer's reasonable needs.

In contrast, overseas settlement transfers are associated with a change in an individual's citizenship or residency status. The amount of foreign currency that can be transferred is determined based on the value of the assets legally accumulated by the person in Vietnam, rather than being treated as recurring financial support.

2.2. Supporting Documents and Proof Requirements

Financial support transfers to relatives primarily require documents proving the family relationship and the recipient's lawful residence overseas. Overseas settlement transfers require more comprehensive documentation, including proof of settlement eligibility or foreign citizenship issued by a competent foreign authority, as well as documents verifying the origin and value of assets accumulated in Vietnam.

3. Common Legitimate Sources of Funds for Overseas Settlement Transfers

Common sources of assets used to verify the origin of funds include proceeds from real estate sales, inherited assets, savings deposits, and other legitimate assets, depending on each case.

• Proceeds from Selling Real Estate in Vietnam: Money received from selling a house or land is a common source of funds for overseas settlement transfers. You should retain the notarized sale or transfer contract and documents proving that applicable tax obligations have been fulfilled to verify the origin of the funds when applying for a transfer.
• Inheritance: Funds obtained from legally inherited assets may be used as a source of funds. If the inheritance is subject to tax under applicable regulations, you must fulfill the relevant tax obligations before transferring the money. Required documents may include an inheritance declaration or estate distribution agreement and documents confirming the value of the inherited assets.
• Savings and Accumulated Assets: These include foreign currency or Vietnamese dong held in personal savings books, payment accounts, and term or demand deposit accounts. You may provide a savings book or account statement for the bank to verify the funds. For this source, you may also need to provide supporting documents showing the origin of the income so that the bank can verify it before processing the transaction.

In addition, Article 10 of Circular No. 20/2022/TT-NHNN specifies the sources of foreign currency that may be used for overseas settlement transfers, including:

• Foreign currency owned by the individual, such as foreign currency held in payment accounts, foreign currency term deposits, foreign currency savings deposits, or foreign currency kept in cash.
• Foreign currency purchased from an authorized bank.

4. Requirements and Documentation for Overseas Settlement Money Transfers

To ensure that an overseas settlement transfer is approved and processed efficiently by the bank, the sender must meet the relevant legal requirements and prepare supporting documents in accordance with the State Bank of Vietnam's regulations.

4.1. Eligibility Requirements for Overseas Settlement Transfers

• Eligible Senders: Resident Vietnamese citizens who are applying for or have completed procedures for foreign citizenship or overseas settlement, or their legal representatives as permitted by law.
• Legal Status for Settlement: Documents must be provided to prove that the individual has been legally permitted to reside long-term or acquire citizenship in the destination country, as issued by a competent authority in that country.
• Legitimate Source of Funds: The foreign currency or Vietnamese dong used for the overseas transfer must originate from assets legally accumulated in Vietnam, such as real estate sales, savings deposits, inheritance, or income from business or investment activities.
• Fulfillment of Financial Obligations: The sender or their authorized representative must fulfill any applicable taxes, fees, and other financial obligations related to assets in Vietnam before transferring the funds overseas.

4.2. Required Documents for Overseas Settlement Transfers

The specific documents required may vary depending on the circumstances. In general, banks may request the following categories of documents:

Group 1: Personal Identification and Authorization Documents (If Applicable)

• Identification documents of the person settling abroad, such as a valid Vietnamese ID card or passport.
• Valid Authorization Documents (if the person settling abroad does not complete the procedures in Vietnam in person): A notarized authorization contract or letter of authorization, or documents consularly legalized as required by law, together with the identification documents of the authorized representative.

Group 2: Documents Verifying Overseas Settlement Status

Provide one of the following documents issued by a competent foreign authority, together with a certified Vietnamese translation:

• A settlement approval document or permanent resident card (PR Card, Green Card, etc.).
• A foreign passport or certificate of foreign citizenship.
• Documents proving that settlement procedures are underway, such as a valid settlement visa or a notice confirming acceptance or approval of the settlement application issued by the immigration authority of the destination country.

Group 3: Documents Verifying the Legitimate Source of Funds in Vietnam

Depending on the source of funds declared for the transfer, you may need to prepare one of the following sets of documents:

• Proceeds from Real Estate Sales: Notarized sale or transfer contract, land use rights certificate or house ownership certificate, bank statement showing receipt of the sale proceeds, and proof of personal income tax payment.
• Savings and Accumulated Assets: Savings book or payment account statement under the name of the person settling abroad, together with documents proving the source of income, such as payslips, property lease agreements, or dividend statements.
• Inherited Assets: Notarized inheritance declaration or estate distribution agreement, death certificate of the deceased, and tax payment receipts, if applicable.

Note: Specific documentation requirements may vary depending on the regulations and policies of each bank at a given time.

Foreign exchange regulations may be amended or supplemented periodically. Customers should proactively check the current legal documents or contact their bank directly for accurate guidance tailored to their individual circumstances.

5. Criteria for Choosing a Suitable Bank for Overseas Settlement Transfers

• Flexible Transfer Limits Based on Asset Value: Since the amount transferred for overseas settlement is determined by the value of legitimate assets rather than a fixed limit, you should choose a bank with experience in handling high-value transactions and providing advice on appropriate transfer amounts for different types of assets.
• Confidentiality and Reliability in Document Processing: As these transactions involve high-value personal assets and settlement documents, prioritize banks with robust customer information security systems and transparent, clearly defined document processing procedures.
• Transparent and Up-to-Date Exchange Rates: The bank should publicly disclose and regularly update its foreign exchange rates so that you can estimate the amount the recipient will receive.
• Extensive Branch Network and Convenient Support: Consider banks with a wide network of branches and transaction offices. This makes it easier to submit documents in person and receive direct assistance from bank staff without spending excessive time traveling or waiting.

6. SeABank's Overseas Settlement Transfer Service - A Secure Solution for Your New Journey

If you are looking for a reputable bank to support your overseas settlement journey, SeABank offers a dedicated international money transfer solution for individual customers preparing to settle abroad or already residing overseas.

With SeABank, you can benefit from:

• Transfer of Legally Accumulated Assets: Flexible document processing support to help you transfer your legally accumulated assets for overseas settlement.
• Free Consultation on Procedures: Experienced specialists provide free consultation on the process, review your documents, and help you complete the necessary paperwork efficiently.
• Competitive Exchange Rates and Preferential Transfer Fees: Optimize transaction costs with preferential fees and competitive foreign currency exchange rates.
• Security and Confidentiality: Transparent transaction procedures and strict protection of asset-related information, providing customers with greater peace of mind.

Customers can find more details on the Overseas Settlement Transfer page or contact SeABank for free consultation and support with fast and secure overseas settlement transfers.

8. Frequently Asked Questions About Overseas Settlement Transfers

1. Who is eligible to make an overseas settlement transfer? 

Resident Vietnamese citizens who are applying for settlement or have been legally permitted to settle or reside long-term overseas, or their legal representatives in accordance with applicable regulations, are eligible to make these transfers.

2. Is there a maximum limit for overseas settlement transfers? 

Unlike certain other one-way transfer purposes, the amount of foreign currency that can be transferred for overseas settlement is based on the value of assets legally accumulated in Vietnam before the individual acquires foreign citizenship or is permitted to reside overseas, in accordance with Decree No. 70/2014/ND-CP, rather than a fixed maximum limit.

3. Are overseas settlement transfers subject to personal income tax? 

No. Transferring money overseas does not itself give rise to personal income tax. Personal income tax applies to transactions that generate the funds, such as real estate sales or inheritance, except where tax exemptions are provided for by law.

4. What documents are required for an overseas settlement transfer? 

The required documents generally include proof of overseas settlement status or foreign citizenship issued by a competent authority in the destination country, together with documents verifying the origin of the assets, such as real estate sale contracts, inheritance declarations, or savings books. You should contact your bank directly for a detailed list of documents applicable to your circumstances.

5. Can overseas settlement transfers be made in multiple transactions? 

Whether the transfer can be made in one transaction or several depends on the documentation, asset value, supporting evidence, and the bank's processing requirements at the time. Customers should consult their bank in advance for specific guidance.

6. How does an overseas settlement transfer differ from an overseas education or inheritance transfer? 

An overseas settlement transfer applies when a customer is relocating their long-term residence overseas. An overseas education transfer is intended to cover education-related expenses, while an inheritance transfer allows an heir residing overseas to receive inherited assets from Vietnam.

Overseas settlement transfers are important transactions that require careful preparation of documents and supporting evidence, as well as compliance with foreign exchange regulations. Choosing a bank with clear procedures and competitive exchange rates can help ensure a smoother transfer process. If you would like to learn more about SeABank's overseas settlement transfer service, contact the hotline at 1900 555 587 or visit the SeABank website to receive detailed assistance tailored to your specific circumstances.