Expats looking at non-traditional destinations can make their money go further.
Expats are in search of the “perfect expat destination”. Though global economic hardships are pushing expatriates to become more price sensitive. Today’s research savvy expats are choosing destinations based on cost-of-living, so they can get the most for their money.
Non-traditional locations are the answer. Expats moving to developing countries such as South Africa, Thailand and the Philippines have reported to have more luxuries (47%, 43% and 47% respectively) since relocating to their new host country.
U.S expatriates may consider renouncing their citizenship to avoid increasing scrutiny from the U.S government.
The announcement by Facebook co-founder Eduardo Saverin that he relinquished his U.S citizenship prior to Facebook’s IPO created a media storm. By becoming a Singapore resident, Saverin can take advantage of the zero capital gains tax levied in the country. This move means he can avoid paying a potential $67 million in taxes in the U.S. Since then, the news has been filled with stories of the number of U.S expatriates renouncing their citizenships for tax purposes. Experts say the numbers have been exaggerated and while some expats choose this option, it is a decision not to be made lightly.
The figures show that eight times as many American expats renounced their citizenship in 2011 as in 2008. While this sounds like a large increase, the actual number was 1,780 in 2011, out of the estimated 3 to 6 million Americans who live abroad. In other words the number of expats who renounced their citizenship rose from 0.008% to 0.059% between 2008 and 2011.
With concerns growing over the Euro, do you know what protection is in place should your bank collapse?
With increasing concern over the stability of the Euro, people have been pulling their savings out of banks to keep them safe. Greek savers have withdrawn their money from local banks amid concerns the European Central Bank won’t provide support to undercapitalized Greek banks. This has also been seen, to a lesser extent, in Spain.
Many expats have their savings in Euro accounts and with the current economic uncertainty you need to know how to protect your funds. First off, remember there are several layers of protection afforded to savings accounts. UK based banks offer a protection up to £85,000 per person per banking institution. So, if you have a joint account in a UK based bank, you are covered up to £170,000. However, if you have four bank accounts in one bank you are still only covered until £85,000 as it is per institution, not account.
Expats moving money between currencies need to decide whether to use a broker or a bank.
Of the five million British expats around the world many continue to earn their income or pensions in sterling. This money, paid into sterling accounts, often needs to be transferred to other currencies.
These expatriates need to move money regularly and safely to their current home. Large currency brokers usually offer deals for regular payments and small installments can be transferred cheaply and easily. The advantages of using a broker over a bank is that it is often cheaper, especially for regular payments.
Expatriates need to be aware of "hidden" bank charges when they use their credit or debit cards abroad.
When arriving in a new country, whether for a long period or just a short vacation, expats are most likely to check out the local shopping areas. Once you are ready to buy, you work out the price in your own currency, pay with your credit card and pat yourself on the back for finding a bargain. However, when your next bank statement arrives, you may find out it wasn’t such a good deal after all.
This kind of mistake happens quite often. Your bank probably uses a different exchange rate to the one you based your calculations upon, charges are also often levied by credit and debit card companies. Most companies add a fee of up to 3% for every transaction made abroad. For example, on purchases of $1000, you could end up paying an extra fee of $24.
Offshore banking is becoming more popular as a way to safeguard money.
People often associate offshore banking with shady activity and tax evasion. Many U.S residents believe it is illegal to have an offshore bank account, however, if you follow the rules it is completely permissible.
Offshore banking is a complex procedure and if you don’t follow the regulations it can lead to you being investigated by the Internal revenue Service (IRS). If you have an offshore account you will still have to report your savings to the IRS by filing a TD F 90-22.1, Report of a Foreign Bank and Financial Accounts.
Many expats find an offshore account very useful once they move abroad - the Channel Islands are a popular location.
According to financial experts, for many expats opening an offshore account is something left until after they move. However, once expats have arrived in their new country they find themselves busy with settling in and opening an offshore account falls down the “to-do” list.
This means savings stay in low return accounts, often with unnecessary tax being deducted, further eroding their value. As financial reasons are the driving force behind moving abroad, protecting the value of savings is vitally important.
QROPS are schemes to allow UK expats to transfer their pensions abroad.
As a British expatriate you have probably heard of QROPS, particularly if you are retired or nearing retirement. QROPS stands for Qualifying Recognised Overseas Pension Schemes. They act as a vehicle into which, UK pensions (private or company) can be transferred.
QROPS are available in many tax jurisdictions around the world. There is a list of recognised schemes on the HMRC (Her Majesty’s Revenue and Customs) website. However, being on this list does not mean the scheme has been approved by HMRC, there is no official approval process.
More British expatriates are being attracted to the Far East, with the US and Western Europe seeing a decrease in expats
According to the NatWest International Personal Banking (NatWest IPB) Quality of Life Index more British expats are moving to Asia than ever before. Whereas the number of people looking to move to Western Europe and the US is declining.
The study noted a decrease of 11% in expatriates moving to the USA but an 18% increase in expats working in Singapore and China over the last five years. Hong Kong is another area that is seeing rising numbers of British expatriates.
Expatriates are still buying in Europe with France and Spain being the most popular for Brits.
Despite the ongoing Eurozone crisis expatriates are still intent on buying property in Europe. Spain and France, popular destinations for expat Brits, are the top spots for people looking for property. These results, reported by Rightmove Overseas, showed that 21.7% of all searches in February were carried out in Spain and 17.3% in second place France.
For expats, getting a home loan in France is fairly secure, Conti Director, Clare Nessling told Expatriate Healthcare, with high loan-to-value (LTV) rates. Spanish LTVs are usually around 70%. But with property prices in the Canary Islands, Balearics, Madrid and Barcelona remaining quite resilient people can purchase property with small desposits, Nessling went on to explain.