You’ve done your research on the country you’re moving to, submitted the necessary documents, begun the packing process, looked at schools, and researched insurance and healthcare, maybe even begun to pick up on the new language, but what about your finances?
International financial planning can be an incredibly intimidating experience. On top of getting prepared for a major life overhaul and adapting to a new culture and country, you’ll need to learn a new banking system, tax requirements, and understand how the country you are leaving (and/or originate from) and the country to which you are moving interact with each other when it comes to financial regulations, banking, and taxes.
Here’s how to get started on financial planning for a cross border move.
Gather Information on Your Employment and Income
While some individuals relocate for work, others relocate for higher education or travel opportunities. Make sure you have all the documents necessary and understand your employment terms, what you will be paid, and how that intersects with the cost of living for the area and your international finance and tax planning needs.
Gather Documents that Outline Your Assets
It’s important to go into your move with a clear understanding of your assets. A cross-border CPA will help you evaluate whether the asset can and should be transferred to your new country, how to move with investments in another country, and what to do about retirement accounts, homes, rental properties, and other assets like boats, computers, and equipment.
While outlining your assets is important, you do want to also gather all up-to-date financial records (bank statements, tax returns, investments, etc.).
Account for any Debts
You’ll need to be able to go over any debts—student loans, car loans, personal loans, credit card debts, etc.—and account for them when planning for your move. A cross-border CPA can help you understand how these debts will impact your move financial as well as your tax circumstance.
Identify Your Banking Needs
International banking can be a tedious system to navigate. You’ll likely need a bank that facilitates the kind of financial transactions you need (i.e. no international ATM fees or a bank that accepts multiple currencies). It’s important to understand how you will use your bank account in order to understand what to look for.
Gather Documents on Your Retirement Plan and Status
Your retirement plan, pension plan, and/or any government program accessibility will surely be impacted by your move. You will need to have a full picture of your current status and assets, and understand whether or not you can maintain those after your move and, if not, how best to transfer.
Review Insurance, Car Payments, Mortgages, etc
Any payments, mortgages, and insurances will be a consideration when moving across borders. These items can impact how each country views you as a tax payer, impact your assets, and cause complications with your move.
For example, regarding insurance, you may be able to add international coverage or purchase additional coverage in your new country, or find that you do not qualify for local plans in your new country for a period of time.
Find a Cross-Border CPA ASAP
The process will absolutely be much easier if you turn to a cross-border CPA. Even in an initial consultation you are likely to get more information on what forms you need, what setups you will need to change, and what is important in your circumstance than a search on Google. A seasoned cross-border CPA will know exactly what questions to ask, walk you through your options, and offer support and referrals for dealing with asset transfers. Of course, they can also alert you of any quirks in tax systems or how to ensure you’re not being double taxed.
Prepare for a Busy Time of Financial Planning
The financial planning aspects of a cross-border move are often overlooked. In truth, many people do not realize that retirement accounts, insurance, and loans and debt don’t often work the same way overseas, or the obligations if you hold onto your retirement account and assets in your country of origin. Every single cross-border move is a unique case, and getting ahead of it can ensure fewer headaches and surprise fees, fines, and payments.
While financial planning and budgeting is important for every individual, family, and business, a move to a new country unleashes a completely different type of need.
