Banking & Finance

  • Can I borrow from Singapore to support my operations or projects overseas?
  • If there is a parent & subsidiary relationship, the bank can consider granting a loan to the Singapore parent to support the working capital requirements of the overseas subsidiary. Usually, the Singapore loan will be funded as “shareholders’ loan” to the overseas subsidiary. If the companies are unrelated or related by common shareholders, it will not be possible to direct funds loan to the Singapore entity to the overseas subsidiary.

    On the other hand, it is possible for Singapore banks to lend directly to entities incorporated in Indonesia, Vietnam and Malaysia. However, this is subjected to the local banking regulations. In addition to certain local banking regulations will also limit the amount a local entity can borrow from an offshore financial institution.

  • Can I borrow onshore in one country to support offshore projects?

  • There are a variety of factors to consider to allow onshore borrowings for offshore projects. Factors to consider will include 1) ease of flow of funds ie whether there are capital controls limiting funds transfer, 2) contractual agreement to clearly define job / project undertaken by offshore & onshore companies etc.

  • Can I pledge or mortgage my assets in one country to facilitates borrowings from another country?
  • For Indonesia and Malaysia, you can pledge certain fixed assets to secure the offshore loans (subjected to Indonesian laws, will need further clarification from local legal counsels).

    For Vietnam, China, Thailand, the onshore mortgagor can pledge the assets to UOB local branches and extend a bank instruments such as an Standby Letter of Credit to secure loans extended to the offshore company. However, this is again subjected to foreign exchange, laws governing guarantees within the respective countries.

  • What are other financing options are available from Singapore?
  • As a Participating Financial Institution, UOB offers a range of Government Assistance Schemes that has been specially designed to meet specific upgrading and expansion for Singapore-based companies. For companies with overseas expansion plans, the International Finance Scheme (IFS) administered by IE Singapore, is designed to assist these companies internationalise successfully. With IFS, companies can access up to S$30 million in credit facilities to acquire fixed assets for overseas use and fund overseas project.

    Case Study
    Company Profile: Furniture and Interior Outfitter for Commercial & Retail Outlets
    Deal Profile: To build a fully automated furniture and glass processing plant in Malaysia

    Banking Facilities Granted:-

    • UOB Malaysia financed the acquisition of industrial land;
    • UOB Malaysia provided construction loan for the building of the factory;
    • UOB Singapore provided equipment financing leveraging on IE SingaporeInternational Financing Scheme (IFS);

    Merits of the Structure:-

    • Cost effective structure
    • Leveraging on offshore loan to purchase equipment and fulfilling part of the capital contribution into the Malaysian JV
  • Can Account Receivables be used to obtain financing?

  • Factoring is a common facility offered to provide instant working capital. It involves the purchase of Client's Account Receivables and in exchange , client will receive cash in advance.

    Factoring also offers up to 90% credit protection against debtors' failure to pay due to financial difficulty. It frees up client's resources by outsourcing the collection and receivable management to the Bank. It can also be used as a tool to acheive Balance Sheet Optimization. UOB’s regional presence allows an Asian centric factoring network with offices in Singapore, Malaysia, Thailand, China, Hong Kong to support business requirements seamlessly. UOB is also a member of the Factors Chain International, the world's largest factoring organization, in facilitating global trade requirements through international factoring.

  • With growing interest in Myanmar, how can UOB assist in supporting business needs?
  • As one of the foreign banks awarded a banking license, UOB Yangon can now offer deposit accounts, working capital financing, trade financing and treasury services to Foreign Owned Companies and JVs in Myanmar.

  • Any restrictions for international payment and settlement from Myanmar?
  • There are no restrictions but necessary approvals are to be obtained and notifications to be given to Foreign Exchange Management Department (FEMD) under the following scenarios:
    a. Prior approval needs to be obtained from FEMD for repatriation of profits (nett after tax) and non-trade payments.
    b. Prior notification to FEMD for offshore loan repayment and repatriation of foreign investment, supported by necessary documents.
    c. FEMD approvals not required for trade related payments.

Updated as of 20.11.2015