How to transfer VND abroad

Recently banks in Vietnam have stopped making US Dollar transfers out of the country from VND based accounts. The problem is quite simple; the reserve bank of Vietnam does not have enough US Dollars available to settle its daily foreign currency obligations. So what can you do if you want to transfer your VND abroad?

The legal way

Maybe out of ignorance some expatriates use illegal solutions. They withdraw a pile of VND from their local bank account, buy US Dollars in the “black-market” at the unofficial exchange rate, deposit the US Dollars into their local bank account, and finally transfer the US Dollars abroad. Apart from being illegal and harmful to Vietnam’s economy, this maneuver carries the risks of being mugged by thieves and fooled by counterfeit money. Finally, local banks limit and control how much cash you deposit without declaring the source of the funds. If done too often, you risk being controlled.

There is however a legal way. For expats paid in VND we recommend using a short-term savings plan from a solid financial institution like Axa, Aviva, Allianz or Generali. These portable and flexible plans were designed with expatriates in mind and allow deposits by credit card.

How do they do it?

Let’s say your salary is paid into an HSBC Vietnam account in VND; that you have a Visa credit card associated with the VND account; you save 21 million every month and want to convert it into US Dollar. It’s easy to do it safely and legally. Open a short-term savings plan with any of the institutions above and use the Visa card to transfer 1.000 US Dollar every month. Technically you are making a payment of around 21 million VND to yourself. The VND are automatically converted into US Dollar and deposited into your savings plan and made available. Some of the institutions above even don’t charge any credit card fees. If you wish to get to know more, contact us.

Written by Afonso Vieira, Managing Director of Total Wealth Management