Expatriate: Considerations for Foreign Employment and Assignment

You are excited about the new offer for foreign assignment but also wonder whether the package is viable given your personal finances, taxes in the new country, housing costs, etc.  You are also thinking about what you might need to plan, especially if you have a family, to make sure the transition will be smooth so that you can focus your energy on your new job to give your new boss a good first impression.  We will explore in this article what the most critical considerations are and how we could help you manage these effectively.

Foreign Assignment and Financial Viability
Exciting as it is to receive a new offer, expatriates often face the dilemma of not knowing whether the package is fair and would be financially viable.  Unlike the domestic market with which you are familiar, you may find it difficult to form an opinion about the offer until you have accounted for important variables such as –

  • Out-of-pocket relocation expenses;
  • Differences in cost and standard of living;
  • Availability and cost of appropriate schooling for your child(ren), if any; and
  • Changes to your monthly take-home pay and tax liabilities.

There may also be possibilities to structure your package more effectively to take advantage of some of the tax concessions available.  This is especially pertinent if your employer has a limited budget and is not aware of the planning opportunities.

Relocating overseas is a big decision.  We will prepare scenario analysis and guide you through the review, based on our proven international experience as well as techniques utilized by employers, so that you may objectively assess the offer and make an informed decision.

We can also help review the terms and conditions of your employment or secondment agreement and suggest modifications to improve clarity of the verbiage, especially for contentious areas that may not be immediately apparent, to protect the mutual interest of you and your prospective employer[1].

Expectations and Reality
It is not uncommon for expatriates to have expectations about the offer they would receive and lifestyle they should be able to afford in the new location.  These expectations, however, may not necessarily align with those of the prospective employer’s or the various practices on the ground.  We could provide consultations that may help you define parameters to further your discussions with prospective employers and calibrate expectations, where appropriate.

International Relocation
Once you have accepted the offer, everything starts to shift into high gear to prepare for that all-important move.  Keeping your personal affairs as well as formalities for the move well organized not only helps reduce your stress level but also avoid undue delays that could impact your finances and your new employer.  Please follow this link for a free download of the International Relocation Checklist you could use to plan your relocation.

Your employer will likely support you for the application of visas and permits required to commence your employment or secondment and residency overseas.  In case other logistical support is not included as part of your package, you should then decide the level of assistance you may need based on your personal experience with relocation, familiarity with service vendors, etc.  We provide two levels of services that will help you expedite the relocation process and settling in –

  • Personalized Consultation: Analyze your needs and preferences, provide personalized consultation on key considerations, prepare customized checklist for your relocation, and furnish unbiased references for service providers you may consider.
  • Personal Case Manager: All services under Personalized Consultation plus compare competitive fee quotes and scope of services from service providers, liaise with service providers to manage delivery and service level, and provide personalized guidance throughout the relocation process.

US Tax Services
US persons are liable for worldwide taxation.  Even if you reside and pay taxes overseas, you will generally still be required to file a federal tax return annually and may be liable for US individual income tax.  In addition, you may be subject to financial reporting requirements if certain conditions are met.  Filing requirements for state and local tax returns, on the other hand, may differ and would require separate assessment.

Tax concessions for foreign earned income and relief for double taxation are, however, available.  With proper advance planning, you could avoid unnecessary pitfalls and take full advantage of these concessions as well as tax relief.  Jensen will support you with pre-departure US tax consultation to help you with advance planning and assist you with your annual US tax filing.  He is an experienced Enrolled Agent, federally licensed to specialize in taxation with unlimited rights to represent taxpayers before the IRS, and was a Senior Manager with Big Four accounting firm.  You may refer to Executive Profile for more details about Jensen’s credentials and our newsletter for up-to-date information about US tax.

Tax Equalization and Protection
If the terms of your offer include tax equalization or protection, you should ensure the application is clearly understood to avoid surprises that could have a material impact on your take home pay.  We could provide consultation on the applicable terms and conditions of your contract (and details of the tax equalization/protection policy, if applicable) and assist with the preparation of the tax equalization or protection.

Considering that you have only one chance to start on the right footing, it is worth making an effort to review the offer thoroughly, take advantage of the planning opportunities, and properly organize the logistics of your relocation.

Congratulations on your foreign assignment!  We look forward to helping you make the best of your relocation.  You can follow this link to Contact Us for our email address and phone number.  Alternatively, you may reach us on Skype at contexomobility using the button below.
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For more information about the array of services we offer, please click here for Services.

[1] Review of terms and conditions for HR purposes is not a substitution for legal review.