International money transfers from Malaysia to Hong Kong for businesses

While many businesses in Hong Kong have distribution channels in Malaysia and around the world, money transfers from Malaysia to Hong Kong still rely mostly on wire transfers and money changers. Some small and medium-sized enterprises even opt for local money changers to handle remittances. These traditional remittance methods have their own limitations in terms of cost, regulations, and security. This article will analyse the pros and cons of each of these methods.

4 common methods to transfer from Malaysia to Hong Kong

1. Bank international remittance services

The traditional method for sending money from Malaysia to Hong Kong involves international bank wire transfers via the Society for Worldwide Interbank Financial Telecommunication (SWIFT) system. The sender must provide the bank with comprehensive details, including the SWIFT code, and the recipient's full name, address, and account details, as well as the correspondent bank's information (if necessary).

2. Remittance services through online banking

In addition to branch-based wire transfer, some Malaysian banks now offer online banking remittances. Similar to local branches, online remittances require the sender to input comprehensive details, including the SWIFT code, the name and address of the Hong Kong bank, or the name of the correspondent bank, as well as the recipient's account name and number in Hong Kong. Some Malaysian banks have branches in Hong Kong, and these banks typically facilitate intra-bank transfers between the two regions without requiring additional documentation.

3. Local money changers

Another alternative is to make remittances through local money changers. Similar to those in Hong Kong, remittances through money changers must comply with local regulations. As part of their due diligence, money changers may require the sender to provide proof of identity and corporate credentials, in addition to the beneficiary’s bank details and the remittance amount.

4. Financial platforms

With modern financial platforms, businesses can skip the complexities of traditional correspondent banking. Users simply enter the transfer amount and currency, and the platform provides a transparent, real-time quote at competitive rates. By leveraging a global network of payment rails, these platforms can bypass multiple intermediary banks that typically cause delays and extra fees.

Processing time for money transfers from Malaysia to Hong Kong

Wire transfers via bank branches typically take up to three business days to complete, but transactions initiated after the bank's cut-off time may cause delays. On the other hand, the processing time for third-party payment platforms depends on the chosen payment methods. For example, transferring funds from a bank to the platform could result in the recipient waiting up to 5 business days to receive the payment.

Cost of money transfer from Malaysia to Hong Kong

Transferring funds from Malaysia to Hong Kong through a Malaysian bank involves service charges and additional charges from collection or correspondent banks. The standard service charge is around MYR$30, and correspondent bank charges are about HK$200. Switching to online banking can lower this service fee to approximately MYR$10.

Payment and receipt for different international remittance methods

To access online banking services or local bank branches, customers must first open an account with a local bank. Funds are then directly deposited into the recipient's bank account in Hong Kong.

For remittances through a third-party payment platform, the sender can utilise cross-bank payment methods like FPX (Financial Process Exchange), akin to Hong Kong's Fast Payment System (FPS), debit cards, or a variety of e-wallets including GrabPay, Touch 'n Go, or MAE. Recipients have the flexibility to receive the funds in cash, deposited into their third-party payment platform account, or directly into their bank account.

Are there any restrictions on money transfer from Malaysia? 

As per local regulations, users cannot hold more than MYR$20,000 in their accounts on the platform. For remittances via third-party payment platforms, both Malaysian residents and foreigners are permitted to perform cross-border remittances up to MYR$30,000 per day. However, foreign workers are only allowed to remit up to MYR$5,000.

What are the requirements for commercial remittance?

Commercial remittance refers to international financial transactions conducted between businesses, often involving payments to overseas suppliers for goods or services, and salary disbursements by multinational companies to employees in different countries.

When making a commercial remittance, businesses must follow specific rules by providing accurate information about the recipient, like their full personal or company name, address, bank details, and a SWIFT Code or IBAN. They also have to ensure that the purpose and amount of the remittance comply with relevant regulations. During the remittance process, businesses may need to provide various commercial documents, such as contracts or receipts, to verify the legitimacy of the transaction and ensure regulatory compliance. In addition, businesses are required to pay fees for commercial remittances to remittance providers, including handling fees, bank charges and currency conversion fees. Before proceeding with the remittance, it is essential to understand the transaction restrictions of both the paying and receiving parties and the remittance provider's limits, such as caps on large remittances.

How do I choose the right remittance platform?

• Low fees: Compare the fees of different remittance channels, as some may have additional or hidden fees.

• Favourable FX rates: Compare the FX rates offered by different channels. Most channels earn a profit from the FX rate difference. To determine the true cost of the exchange, compare the offered rate against the interbank rates.

• Speed: Different channels offer varying payment, conversion, and remittance methods, which may affect the remittance time. It is recommended to evaluate the necessary processing time for each remittance flow before initiating the transfer.

Steps and procedures when remitting with Airwallex FX & Transfers

Airwallex as a one-stop financial platform provides an FX & Transfers solution for businesses by charging as low as 0.2% above the interbank rate for currency exchange, offering market-leading FX rates that help businesses operating globally to save daily costs. Businesses can easily transfer to 200+ countries and regions in 90+ currencies, in as little as one business day with the full amount on delivery guaranteed. You may also open free Global Accounts in 20+ currencies to receive funds.

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FAQs

1. Does Malaysia have foreign exchange controls?

Yes. When making remittances through any channel, businesses are allowed to conduct cross-border remittances of up to MYR$30,000 per day. Foreign workers are limited to a maximum of MYR$5,000.

2. What are the options for remittances from Malaysia to Hong Kong?

You can make remittances through banks, money changers, and third-party payment platforms. It is advised to understand the fees, remittance methods, and processing time before initiating a transfer.

3. How do I choose a reliable remittance platform?

In addition to the cost and time of remittance, it is also recommended to choose a larger, licensed platform to ensure regulatory compliance and secure transactions.

4. What are the benefits of using Airwallex for business remittance transactions?

With support for 90+ currencies and 200+ countries, Airwallex provides high transparency, no hidden fees, and no limits on large remittances. It also offers favourable exchange rates. Remittances can be processed as quickly as 1 business day, making it ideal for startups, SMEs, and other businesses seeking streamlined processes, cost savings, and flexible handling of international remittances.