When moving to another country, you also need to make sure you move your money, too. Opening a bank account, dealing with foreign taxes and trying to figure out how to buy property can all be a little overwhelming. So, if you're planning on moving overseas, check out these tips that we've compiled to help ease the transition.
Before you leave, find out how stable the local economy is in your new home. This will determine how much money you take with you and how much you leave behind. It's always a good idea to keep some of your money in your home country, just to ensure there's something there should or when you decide to return. Just make sure it's secure and that the account won't be devoured by monthly or annual fees.
You can also leave a lawyer in charge of your accounts if you decide to leave money in your home country. If you don't want to hire a lawyer, speak to your bank about transferring money when you need it. Ask how long it takes to transfer and what they'll need from you to do so. This will ensure everything is set-up before you leave.
Many countries will allow you to open up a local bank account, but also check to see if they'll allow you to keep an account in your own home currency. If you are moving from the U.S. to Canada, you can keep a separate U.S. fund-account to store your U.S. money until the Canadian dollar drops a little more, then you can transfer it to the local currency and make some extra money in the process.
If in doubt, ask your local banker or financial adviser. Just make sure you know where your money is, how to access it and that you have a local contact - a friend, relative, or professional - should you need some support.
International and Local Taxes
United States citizens have to report their international income on their tax returns. Canadian citizens, on the other hand, must continue to submit Canadian tax returns for the first six months that they live abroad. Canadian taxes are based on residency, which is defined as 6 months plus one day. Remember if you're still receiving income from your home country, most countries require that you continue filing tax returns and paying any additional amounts owed.
The best advice is to seek assistance from an accountant or tax specialist that has international experience and knowledge. Most experts strongly recommend this type of service, despite the cost, as you may be eligible for deductions and credits, plus some countries have agreements or treaties between them that defines the tax law. You can find that you'll save money if you are earning money in several countries at the same time. Otherwise, you might be paying more than you need to.
For U.S. international tax information go to the IRS website for details and forms. For Canadian citizens, go to Revenue Canada's website. If you earn any income while you are overseas, you may be required to pay tax on that income. You should check the rules and regulations with that country's embassy or consulate before you leave the United States, or consult the nearest U.S. embassy or consulate abroad.
Wills and Insurance
Your lawyer will advise you that you should prepare wills before you move overseas. This is to ensure that should anything happen, our estate at home and in our adopted country is secure and not tied up in red-tape. It's important to make clear instructions for what should happen and who should be contacted.
You should also speak with your insurance company regarding life insurance coverage, and any insurance you have for property left behind. Again, make sure you and your family are protected should anything happen.