A Quick Guide to Help You Prepare for Your International Move
Yes, we are in a global pandemic, but that has not stopped Americans from researching how they can move abroad. If you find yourself googling, we have saved you a step by compiling a quick guide to help you prepare.
Take the time to research your options and reach out to other expats currently in the country you are targeting.
· Speak to your current employer, do they offer international assignments?
· Are you highly skilled or specialized? The European Union, and many other countries, offer fast-tracked migration schemes to allow foreign workers to fill specific labor and skill shortages.
· Moving for love? Foreign countries, generally, allow family reunification for marriage.
Banking and Financial Services
Do your homework in advance of your move.
· Banking abroad as an American can be a bit of a headache. The U.S. can and will track and monitor American taxpayers who have foreign financial accounts. This additional scrutiny means not all foreign banks welcome Americans.
· Your U.S. financial institutions may limit or discontinue services when you notify them of your address outside the U.S.
Family issues are a wide range of things.
· If you have children, are you thinking about local or international schools? Both have benefits, drawbacks and potentially waiting lists.
· Are you moving with a spouse who wants to take advantage of generous maternal/paternal leave available outside the U.S.? Each country has their own regulations.
· Do you have aging parents or young adult children who will stay in the U.S.?
Planning must begin before you go!
· U.S. citizens and green cardholders have mandatory U.S. income tax filing requirements, regardless of where you live and work.
· Most countries outside the U.S. operate on residence-based taxation, meaning you will need to file a foreign tax return.
· There are tax treaties between the U.S. and many countries to help alleviate double taxation, but they can be complicated.
· Many income items will be taxed and treated differently between the U.S. and foreign tax regimes- planning is key.
· If you self-prepare or work with a local U.S. accountant who does not specialize in expats you may unknowingly omit important foreign information filings, underreport income or overpay taxes.
Research and obtain new policies that are effective in your foreign country or residence.
· Double check all your current insurance policies, what can you keep, what do you need to purchase?
· Depending on your length of stay abroad, you may be able to keep U.S. policies in place.
Citizenship & Residency Status
A second passport seems to be the new status symbol among Americans.
· Not all countries allow Americans to hold dual citizenship, so check the requirements if you have your heart set on achieving this status.
· Long term residence is also attractive for many, but often requires a high level of fluency in the official language.
· Check your visa and be sure to understand how your residency status changes should you leave the company that brings you over or if you are made redundant.
It’s ok to manage your own assets but be sure you know the tax and reporting obligations no matter how and where you invest.
· Investment regulations vary widely from country to country.
· Ensure your investment advisor acts as your fiduciary, meaning they are working in YOUR best interest, not theirs.
· Take the time to understand the local tax implications of your portfolio and understand that many foreign investments are taxed and penalized from a U.S. tax perspective.
· Your U.S. retirement account may be your biggest investment account, so make sure you understand how your new country categorizes your accounts to avoid a surprise tax bill.
Even if you feel your situation is simple, a paid consultation with a financial planner and tax advisor who specializes in cross-border planning before you go is an investment that will save your money and headaches down the road. If you have specific questions feel free to reach out to me, Arielle Tucker, I’ve lived in Zurich, Berlin, and Munich. Or reach out to my colleague at KLR, Kristen Howze, who has lived in Amsterdam and Lausanne.