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Expat Financial Checklist: Offshore Money Made Easy

Do all expats need an offshore bank account?  Do all expats have to have private health insurance?  Are expats more exposed to lifestyle risk and therefore in greater need of life insurance?  Do expats have to take their pension offshore?  As an expat, is the financial marketplace littered with fiscal landmines?

These and a hundred other questions have probably been pondered by expats everywhere in the world.  So much is written about how expats have an advantage financially speaking, but for anyone other than a global financial expert, how do you get down to the basics that are relevant to you?

As someone thinking about moving abroad, or as an expat who’s living overseas already but who has yet to get all of their money matters ironed out, there is a lot to think about.  However, it doesn’t have to be all that hard.  With our expat financial checklist we’ll make offshore money matters easy and accessible for you.  We’ll cut to the chase, show you what you need to be thinking about, and remove as much of the ambiguity as we can.

Why Do Expats Supposedly Have a Financial Advantage?

Expats potentially have a financial advantage once they move abroad because: –

– They may be able to pay less tax on income, worldwide assets, investment and savings gains
– They may be paid more than their onshore peers (HSBC bank research shows that expat professionals earn more on average)
– They may be exposed to a lower cost of living (e.g., those living in a warm climate may avoid heating bills, those living in gulf states may pay less for fuel, those living in less affluent parts of the world may pay less for groceries and real estate)
– They potentially have access to many more savings and investment options for the advancement of their wealth – this can potentially mean greater gains on invested wealth are possible (although as everyone knows, investments can go down as well as up)

You may be benefitting from any, all, some or none of these potential financial advantages currently…however, chances are, if you’ve not explored the final point with the help of a qualified and regulated financial adviser expert in assessing an expat’s tax and financial status and advising on the international financial marketplace, you will not be making the very most of your money yet.

Can All Expats Save Tax?

No.

If you want to know if you can save tax on your income or worldwide assets, income or gains you need qualified tax advice from an international accountant or tax expert.  You need to take into account the nation in which you are tax resident and their tax policies, the nation/s in which you have investments, assets or from which you derive an income, their tax policies relating to your potentially tax bearing assets, double taxation agreements in place between these countries and the one in which you’re tax resident – and probably a number of other factors too!

Do not assume you can avoid, evade, save or ignore tax.  However, you owe it to yourself to have your affairs professionally assessed by a tax adviser.

To read more about the countries in which expats can live and potentially save tax, read our article ‘where can expats live abroad and pay less tax,’ or read ‘expatriate tax saving advice.’

Do All Expats Need an Offshore Bank Account?

No.

You may want an offshore bank account or an international account if your onshore current account back home or in your new nation fails to deliver in terms of financial flexibility.

An international (offshore) current account can give you flexible money management options allowing you access to your money online or over the phone 24/7 no matter what your time zone.  You may be able to transact internationally and in multiple currencies more easily and perhaps for less…however, there is nothing to say an expat has to have an offshore bank account.

To determine whether such an account could benefit you, read our article ‘do expats need an offshore bank account?’

What Insurances Do Expats Need?

As an expat you have to look at the healthcare services and standards in your new nation, and whether you have to pay to get superior treatment.  99% of the time expats do need to have some form of health insurance to be well looked after in their new nation.

It’s also a fact that expats who regularly travel back home or elsewhere abroad need to have some form of international cover in place – although this could be supplied through a basic travel insurance policy.

In terms of getting international health insurance, or local insurance for your new nation – it’s worth shopping around between the international big names such as BUPA and AXA PPP and the local insurers in-country.

Look at what you will need, don’t be tempted to over-insure if you want to keep costs to a minimum, but ultimately do NOT risk your health by going uninsured in a country where insurance is mandatory if you want to get any form of decent assistance.  See our ‘health abroad’ section for more detailed coverage of this topic…

Other than medical insurance expats may like to consider life insurance and critical illness cover – look at your home and contents, car, travel and medical insurance first though, to see if any benefits are included.  Also ask your employer whether there is death in service benefit, and add this in when thinking about what you may need to get cover for.

If you’re the main breadwinner and/or you have a lot of family bills to service such as school fees and a mortgage, you really owe it to your family to be insured.  If you’re a lone wolf, these insurances may not be so important to you.

Think about those you may leave behind and affect if you die – and think about how they will be financially impacted if they lose you.  You can’t do anything about any emotional suffering, you can insure against financial hardship though.  Think about your own situation and make a decision accordingly.

How Can Expats Make More of Their Money?

Finally it’s time to look more closely at the offshore savings and investment minefield – and the good news is that it’s only a minefield to those who don’t know what they’re doing!

Expats have a lot more choice and a lot more potentially interesting and better returning options open to them than their onshore peers and counterparts.  However, identifying the options that suit your goals, risk profile, tax status, age, position in life and financial abilities is key to making the most of the options open to you.

We always recommend anyone entering this arena and wanting to know more about their options gets qualified, expert advice from a regulated and qualified independent adviser expert in advising expats.  This article does not constitute advice.

Take personal recommendation to find an adviser if you trust the person making the recommendation, or do your own research to ensure any brokerage you trust is regulated and experienced.  Question advice given for its appropriateness to you, work with your adviser to goal set and work out your risk profile, and only move forward when you are 100% comfortable with recommendations made.

You should never have to hand over wealth to save or invest directly to an adviser, it should always go to the institution you have identified as offering you the best return/right investment/savings solution.

Finally, we have a working relationship with an offshore financial advisory and can put you in direct touch with them if you want to see whether they are the right people to assist you.  You are under no obligation to take any advice given, and we are in no way professionally affiliated with the brokerage in question.  The service we provide is referral based and designed to help readers access a potentially suitable adviser.  To learn more, complete our enquiry form.

In Conclusion

Expats do have advantages over their onshore peers, and it doesn’t have to be at all complex to identify what those advantages are to you personally.  Seek advice, think practically about your own position, and ultimately don’t panic, worry or stress – take the steps necessary to make the most of your financial future, but take them carefully and with expert advice where appropriate.  You don’t have to go it alone!

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