Foreign remittance

AAA

DEFINITION of 'Foreign remittance'

A transfer of money from a migrant worker to their families or other individuals in their home countries. In many countries, remittance constitutes a significant portion of the GDP (up to a third in some cases). The United States is the leading source of foreign remittances, followed by Russia and Saudi Arabia. The top recipients are India, China and the Philippines. So much money is being remitted, the G8 and the World Bank are attempting to monitor and regulate remittance costs. 

INVESTOPEDIA EXPLAINS 'Foreign remittance'

According to social scientists, since it's so widespread, remittance has implications that extend beyond individual finance. For example, since remitting involves financial institutions, people who send and receive remittance are likely to have bank accounts, which promotes economic development. Remittances can be lifesaving in emergencies, such as natural disasters and armed conflicts, when the recepients' other sources of income disappear. Remittance payments are difficult to track, and there is some concern that they can be used in terrorist financing or money laundering.

RELATED TERMS
  1. Remittance

    The process of sending money to remove an obligation. This is ...
  2. Linked Transfer Account

    Accounts held by an individual at a financial institution that ...
  3. Asian Infrastructure Investment ...

    The Asian Infrastructure Investment Bank (AIIB) is an international ...
  4. Asia-Pacific Economic Cooperation ...

    Asia-Pacific Economic Cooperation (APEC) is a 21-member economic ...
  5. Back Pay

    The amount of salary and other benefits that an employee claims ...
  6. Payroll Card

    A prepaid card onto which an employer loads an employee’s wages ...
RELATED FAQS
  1. What is the difference between a current account deficit and a trade deficit?

    The terms current account deficit and trade deficit are often used interchangeably but in fact they have substantially different ... Read Full Answer >>
  2. How does the trust maker transfer funds into a revocable trust?

    Once a revocable trust is created, a trust maker transfers funds or property into the trust by including them in a list with ... Read Full Answer >>
  3. What is the difference between a greenfield investment and a regular investment?

    A greenfield investment is a particular type of investment where an international company begins a new operation in a foreign ... Read Full Answer >>
  4. What is the difference between AGI (adjusted gross income) and gross income?

    In the United States, individuals pay taxes based on their adjusted gross income, or AGI, rather than their gross income. ... Read Full Answer >>
  5. What are the benefits for a company investing in a greenfield investment?

    Advantages of greenfield investments include increased control, the ability to form marketing partnerships and the avoidance ... Read Full Answer >>
  6. Why did China designated certain territories as special administrative regions?

    The primary reason for the People's Republic of China designating two territories as special administrative regions, or SARs, ... Read Full Answer >>
Related Articles
  1. Economics

    Introduction To Remittances

    Remittances are an important factor in the global economy, and help drive growth both at home and abroad.
  2. Home & Auto

    Are Home Inspections Worth It- Price vs. Value

    If you’re wondering whether home inspection is worth the investment, the following information will help you decide.
  3. Economics

    What to Expect from Russia's Oil-Dependent Economy

    The fate of Russia's economy is for the most part determined by the price of oil. Here's how it's likely to play out.
  4. Entrepreneurship

    How a Higher Minimum Wage Would Impact the Economy

    Doubling pay for hourly workers could have several knock-on effects to the economy. Here's a brief look at a big issue.
  5. Professionals

    Active or Passive ETFs: Which is Better?

    What will be more popular in the near future: active or passive ETFs?
  6. Mutual Funds & ETFs

    ETF Analysis: iShares MSCI Singapore

    Learn more about BlackRock Advisor's iShares Singapore MSCI exchange-traded fund, which looks to mirror the holdings and yield from Singapore markets.
  7. Mutual Funds & ETFs

    ETF Analysis: Vanguard MSCI EAFE

    Learn more about Vanguard's index-shifting, low-cost and non-U.S. market exchange-traded fund: the FTSE Developed ex U.S. Markets ETF.
  8. Stock Analysis

    Smartphone "Flagship Killers" Coming after Apple and Samsung

    Learn why flagship killers such as OnePlus and Xiaomi have the potential to become the first legitimate competition faced by Apple and Samsung.
  9. Investing

    Some Overseas Markets May Prove More Resilient

    Though global markets sold off and have continued to slip in recent days, stocks in Europe and Japan are still faring better than their U.S. counterparts.
  10. Professionals

    Are These the 10 Best Stocks in the World?

    Most of the top 10 stocks in the world have performed exceptionally well over the past several years. Here's a look at their future prospects.

You May Also Like

Hot Definitions
  1. Nuncupative Will

    A verbal will that must have two witnesses and can only deal with the distribution of personal property. A nuncupative will ...
  2. OsMA

    An abbreviation for Oscillator - Moving Average. OsMA is used in technical analysis to represent the variance between an ...
  3. Investopedia

    One of the best-known sources of financial information on the internet. Investopedia is a resource for investors, consumers ...
  4. Unfair Claims Practice

    The improper avoidance of a claim by an insurer or an attempt to reduce the size of the claim. By engaging in unfair claims ...
  5. Killer Bees

    An individual or firm that helps a company fend off a takeover attempt. A killer bee uses defensive strategies to keep an ...
  6. Sin Tax

    A state-sponsored tax that is added to products or services that are seen as vices, such as alcohol, tobacco and gambling. ...
Trading Center
×

You are using adblocking software

Want access to all of Investopedia? Add us to your “whitelist”
so you'll never miss a feature!