It's a rare case today that a company does business solely in a single country.
Even if you’re only selling domestically, there’s a fair chance that you’ll be purchasing goods, services, and maybe even labor from an overseas country.
While the exchange of goods between countries is a lot easier than it used to be, exchanging money is a little more complicated.
When sending money overseas, whether you’re paying foreign suppliers, investing in overseas markets, or paying for business travel, you’ll need to send an outward remittance.
In this article, we’ll explore exactly what outward remittances are, diving into the ins and outs of sending them, the costs involved, and regulatory guidelines you’ll need to consider as a business sending money outside of the country.
What is outward remittance?
Outward remittance refers to the transfer of money from a resident of one country to a beneficiary (a resident or company) in another country. Basically, if you’re sending money to another country, you’ll use an outward remittance.
But an outward remittance isn’t exactly the same as an international transaction.
Outward remittance is the formal, regulated process of sending money from a person or business in one country to a recipient abroad. All outward remittances are overseas payments, but not all overseas payments are considered “remittances” in a regulatory sense.
Outward remittances are used for both personal and business purposes. In the personal context, outward remittances are typically used for activities like paying for overseas education, investing in foreign assets, or covering travel and medical expenses.
Business use cases for outward remittances include:
- Paying overseas vendors
- Business travel costs
- Investing in foreign subsidiaries
- Loan repayments and interest costs
- Dividend or profit repatriation
- Professional memberships or subscriptions
It’s also important to distinguish between outward and inward remittance.
While outward remittance is money sent from a country to an overseas recipient, inward remittance refers to funds received into the country from abroad.
Benefits of outward remittance
As a business looking to send money overseas, you may look to an outward remittance service provider to facilitate the transaction.
There are three big benefits that make outward remittance a reliable option for individuals and businesses needing to move money across borders efficiently:
- Streamlined payment processes. Modern remittance platforms and banking apps often feature intuitive interfaces, making it easy to initiate transfers, track status updates, and manage beneficiaries, all from your phone or desktop.
- Competitive fees and transparent pricing. Many providers now offer flat or low fees with upfront currency conversion rates, so you know exactly how much will be received on the other end.
- Built-in security and compliance. Reputable providers follow strict Know Your Customer (KYC) and Anti-Money Laundering (AML) regulations to keep your funds safe and meet international financial standards. This reduces the risk of fraud and ensures your transfer is fully compliant with local and global laws.
How to send an outward remittance
Sending money overseas using an outward remittance is a structured process, but it's not an overly complicated one.
Here's a step-by-step guide to help you through it, along with what documents you’ll need and how to track the transaction.
1. Choose your remittance provider or bank
Start by selecting your service provider. The biggest consideration should be the destinations offered (where you need to send money to). From there, look at rates and processing times.
Common options here include your own bank, licensed money transfer services, and digital remittance platforms.
2. Gather the required documentation
The exact info you’ll need to pull together depends on the provider you choose, but most will ask for:
- A valid government-issued ID (passport, national ID, or driver’s license)
- Proof of address (utility bill or bank statement)
- Supporting documents, depending on the purpose, such as an invoice, admission letter, medical bill, or contract
3. Enter recipient and transfer details
Once you’re set up and ready to send your outward remittance, you’ll need to gather the relevant transaction details, including:
- Recipient’s full name (matching their bank account)
- Bank name and account number
- SWIFT/BIC code or IBAN, depending on the country
- The amount and currency you want to send
4. Review fees, exchange rate, and total amount
Before you approve the transaction and send the funds overseas, do a quick sanity check on all of the fees involved, and confirm that the recipient will receive the appropriate amount after any conversions take place.
5. Confirm and initiate the transfer
Once everything looks correct, approve the transaction. You may need to complete two-factor authentication depending on the provider.
6. Track your remittance
Keep an eye on your transfer until you get notice from the receiver that the funds have arrived on the other end.
Most services offer a transaction reference number or a real-time tracking dashboard. You can use this to follow the status of your transfer and receive updates on when the funds are delivered.
Cost considerations for outward remittance
Outward remittances are not free. The costs involved, however, depend not only on the provider you choose but the transfer amount, destination, and method.
Here are a few cost considerations to bear in mind when sending money overseas.
Fee structures and how they compare to traditional methods
Outward remittance fees can vary widely between different providers.
Traditional banks often charge higher flat fees and typically offer less competitive exchange rates.
Digital remittance services tend to offer faster transfers and lower fees, but you’ll need to go through the registration and approval process first.
Some providers charge a percentage of the total amount; others use tiered or flat-fee models. As such, it's best practice to choose a provider that charges in a way that minimizes costs for your specific scenario.
Currency conversion rates and their impact
Exchange rates play a major role in how much money your recipient will actually get.
Even a small difference in rates between days can lead to meaningful changes in the final amount.
Additionally, many providers add a margin to the mid-market rate, which often isn’t clearly disclosed. So, always be sure to compare the effective rate, not just the fee.
Other hidden costs to watch out for
While we’re on the topic of costs that aren’t clearly disclosed, here are a few additional fees and charges you should keep an eye on when using outward remittance:
- Intermediary bank charges (especially in SWIFT transfers)
- Receiving bank fees, which some international banks deduct from the transfer before delivering the funds
- Delayed transfer surcharges, which may apply if additional compliance checks are required
- Inactivity or service fees on certain platforms
Regulatory guidelines for outward remittance
Outward remittance is closely regulated to ensure legal use of funds and to prevent financial crimes such as money laundering and terrorism financing.
So, if you’re sending money overseas, you’ll need to comply with a set of legal and documentation requirements. Let’s explore.
Overview of compliance regulations
Most countries have foreign exchange laws managed by a central authority (e.g. RBI in India, Bank Indonesia, or AUSTRAC in Australia).
These regulations typically include:
- Identity verification (e.g., KYC)
- Source-of-funds documentation
- Transfer limits (annual or per transaction)
- Approval or reporting requirements for specific remittance types (e.g., investments or real estate purchases)
Failure to comply can result in blocked transactions, fines, or legal issues, so it’s important to choose providers that strictly follow local and international remittance laws.
The role of purpose codes
One of the important requirements that regulatory authorities enforce is the use of purpose codes.
Purpose codes classify the reason for the remittance (e.g., education, medical treatment, investment, gifts). They help regulatory bodies track how and why money is sent between countries.
Using the correct purpose code is essential. It ensures your transaction is processed without delay, avoids rejections, and helps the provider comply with reporting obligations. The wrong code can trigger audits or require resubmission with additional documentation.
Manage international payments with BILL
Outward remittance is a key part of sending money overseas, whether you’re paying suppliers or investing in new markets.
There’s a lot to consider when managing international payments, which is why the most successful finance teams use BILL’s integrated finance operations platform to keep on top of it all.
Learn how BILL can help you make international payments in more than 130 countries.
Frequently asked questions
What is the difference between inward and outward remittance?
Inward remittance is money received from a foreign country. Outward remittance, on the other hand, involves sending money from your country to a person or company abroad.
How much time does it take for outward remittance?
Outward remittance typically takes 1-3 business days. This depends, however, on the provider, transfer method, and destination country. In some cases, it may be possible to facilitate a same-day transfer.
What is remittance outflow?
Remittance outflow is the total value of funds sent out of a country to foreign recipients, usually tracked for regulatory and economic analysis.
Is outward remittance the same as a wire transfer?
No, outward remittance isn’t the same as a wire transfer.
A wire transfer is one method of sending an outward remittance. Outward remittance is the broader term, covering all types of international money transfers, including wire, online, and mobile platforms.
