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Helping Assignees to get their International Financial Affairs in Order

CompassPOINTS - December 2006

By Simon de Ferrer, Private Banker with Royal Bank of Canada Europe Limited. Based in London, Simon makes regular visits to the Middle East where he advises expatriate Canadians and others on international financial matters.

Moving staff abroad involves myriad details for any HR professional or manager. In the confusion of relocating home and career, your soon-to-be expatriate employee might easily overlook proper planning for their financial affairs.

A smooth transition to a new country ought to be free of financial stress and anxiety, allowing your employee to focus their energies on their family, on settling in to their new life; or on becoming comfortable with the new work environment.

As any HR professional or manager with an international organization knows, moving an employee abroad is an investment in that employee’s future with the company. Ensuring a positive transition experience for an expatriate employee goes a long way in retaining and engaging that employee for the long-term.

An experienced international financial advisor can guide your employee through the pitfalls of moving to another country. If there is a current relationship with an international financial institution, the process can be much easier than using different banks in each country.

We’ve prepared the following financial tips to help you support your employees who are planning a career move abroad.

1. Do your homework

Consider what financial services you are likely to need in your new home. Internet banking, or access to a local branch? What about credit cards and cheque books? Or international currency accounts? You may not want to think about money but take some time to consider things like:

  • Depositing your pay cheques
  • Withdrawing money
  • Conducting transactions in your new country
  • Making payments
  • Transferring money

It is important to know to what extent your existing services will “translate” to the new country’s systems. Even without language or cultural challenges, there can be barriers between banking systems that are better identified before the move.

2. Put the effort in before you leave home

An hour spent arranging your international banking before you leave home can save you many weeks of headaches later on. Do as much as you can from your home country before you board the airplane. For example, money laundering regulations may mean that to open a bank account you need a copy of a utility bill, which you may not receive for some time at your new residence.

Some banks might not take fax copies and require everything by mail. In some parts of the world it can take many weeks, if not longer, for surface mail to arrive. Some countries don’t have street addresses so mail is sent care of a post box at the work address. The solution? Open an international bank account before you leave. Once in your new home you can show proof of change of address.

Banking laws vary with jurisdiction, so ensure you are aware of the specifics as to where you are going. Remember to take copies of passports, certificates, utility bills and other documents that may be helpful.

3. Give yourself time and patience

The one commodity in short supply when you move abroad will be time. Arranging leases, getting a driver’s licence, buying a car, getting the kids settled into a new school will all eat into your spare time.

It takes time to figure out the systems and processes of a new country and even more time to get them working for you. For example, cheques in the United Kingdom may take a minimum of three days to clear, sometimes longer. Or you might be given an appointment to set up your broadband….but it could be up to three months away.

Our advice to the soon-to-be expat? Take a big deep breath, remember this is supposed to be a life fulfilling move and try again.

4. Understand your goal and minimise tax

Depending on where you’re headed, you may have a golden opportunity to accumulate wealth – perhaps even enough to secure your financial future.

The key is to ensure that the wealth you accumulate as an expat not only grows but grows in the most tax-efficient manner. Banking and investing internationally is often the first step.

As an expat, with the right kind of planning, and the right kind of services, you can often reduce your taxes and still comply with tax laws. Tax laws vary widely from one country to another, and your personal situation plays a key role in determining the most tax-efficient arrangement.

The tax laws of the country in which you’re moving to will likely be very different to those in Canada. The tax issues can be complex in certain cases, but the potential long-term benefits are substantial. Professional guidance is essential.

5. Caveat emptor

Many of the traditional destinations that expats move to do not have the same consumer protection laws as you know in Canada. It is especially important to be cautious of sophisticated financial instruments. For example, beware the long term insurance product masquerading as a regular savings plan. Ask about charges and minimum investment periods. Try to find out about the company the sale person works for and who owns it; check them out on the web. Are they credible and reliable? Ask your new friends and work colleagues for recommendations. Above all keep your wits about you and your feet on the ground. If it looks too good to be true, chances are it is

You can contact Simon at Royal Bank of Canada Europe Limited at +44 207 653 4746 or simon.deferrer@rbc.com.

Royal Bank of Canada Europe Limited is authorised and regulated by the Financial Services Authority.


Tel: (403) 531-2200 
Fax: (403) 263-1826


Web: www.compasstax.ca
Suite 600, 1333 8th Street SW
Calgary, Alberta Canada  T2R 1M6


Tel: (403) 531-2200 
Fax: (403) 263-1826


Web: www.compassguides.ca
Suite 600, 1333 8th Street SW
Calgary, Alberta Canada  T2R 1M6