When foreign professionals start to work internationally, their contract can often become either a long-term rolling renewal or an option to move across multiple locations every few years over a sustained period of time.
One thing is for sure; once you get the bug working overseas, it’s hard to return to the normality of your home country!
There are many financial considerations that then need to be managed. Firstly, do you have excess available income and do you really want to accumulate that growing amount of foreign capital in an overseas local bank?
Trying to move a larger amount of accumulated cash later might be a headache (even with all the correct paperwork) and as we have seen in the last 3 years, you could unexpectedly be prevented from getting to a bank in person at the time you need to.
Then, you may start to find that your primary bank account from your country of origin (one that you have held for many years, problem free) begins to cause some issues. Transferring money from overseas into this account, particularly from countries considered “higher risk”, may raise questions before being credited and useable. These questions will likely require greater supporting evidence and longer compliance reviews the larger the sum.
For example, a European I work with had a six-figure transfer blocked by their French bank for more than 3 months while checks were undertaken. In addition, from the bank’s internal and individual risk management perspective, they could even force closure of such accounts to someone who is now an overseas resident. Unfortunately, there is no clear road map to avoid such things from happening and it is not something coverable in an article such as this, except to say that caution with communications is recommended and it may help to seek guidance prior to any actions going forward.
A further challenge presenting itself is the portability of bank deposits from country to country when taking different assignments around the globe. In theory, this should be easy. In practice, there can be a host of obstacles, e.g. the growing cost in the investment of time expense which is required for each transaction and change.
There is the old joke about opening an account in China which requires taking a day’s holiday. On paper, this is the easiest part of all the banking processes you’ll encounter!
On top of all this, what do we do with any “non deposit” savings, pension planning replacements (while you can’t fund your home scheme) and any investments that will require the same or greater considerations than those mentioned earlier for simple bank accounts? Then, how can we avoid or reduce the problems of having multiple assets in different countries to manage? And how do family or next of kin gain access to such assets if anything happens to you?
The simple answer is to have a third option available to you which is unaffected by all of the other challenges, no matter where you may be working. This will be covered in more detail in future issues.
As we start to open “Pandora’s financial box” of working overseas, Money Talks will try to look at as many of the most important points as possible. We welcome readers’ questions by email to help us understand any particular areas found most challenging to ensure they are investigated in follow-up articles.
For more information, moneytalks@thenanjinger.com / WeChat: 13671679174
