Expatriate Banking

Summary: As an expatriate it's important to think ahead and understand your short and long term likely financial requirements when examining banks and account features in your new overseas country.

As an expatriate it’s important to think ahead and understand your short and long term likely financial requirements when examining banks and account features in your new overseas country.

The key question you will have to answer relates to whether you should open a local bank account, an international or an offshore bank account.  As expatriate banking is a specialist area in itself it is one you should consider carefully and not rush; the best place to begin is with an examination of your day to day money management requirements.

Do you need to maintain a bank account ‘back home’?

Ask yourself these questions - having expatriated, do you still have to manage finances ‘back home’ - from continuing to make mortgage or maintenance payments, to on-going savings or investment commitments?  Should these payments continue to be made from your original bank account or can they be moved to an international, local or offshore account? 

Here you have to think about whether you’re ever planning on returning to your home country or not, as well as thinking about the nature of any financial commitment you currently have.  For example, if you’re maintaining a property in your home country and you have mortgage or insurance payments to meet then chances are you have it in the back of your mind to return one day, or to at least retain ties with your home country.  In a situation like this it’s possible that retaining your original bank account is a good idea.

If on the other hand you have no material ties or commitments ‘back home’ and the only things coming from your original bank account are investment or savings payments, would it make more sense to either move these regular payments to a new international account or even to switch the investment policies you have to better potential returning, tax efficient offshore investment plans?

To help you make these decisions it will be important for you to speak to an independent and international financial adviser.  He will be able to assess both your circumstances and your options and advise you accordingly.  Whatever decision is best for you, it is still possible to maintain key banking services back home whilst making the most of your newly acquired tax status overseas...if you’re a UK resident for example, and have expatriated you should complete the R105 form from the Inland Revenue though to make sure any interest you receive on your UK account is not taxed at source.

Do you need to set up a local bank account in your new country?

In the country you have relocated to you will have a whole new set of day to day, or month to month financial commitments.  Rent, electricity, telephone and water charges for example; you’ll also need access to your money for food and entertainment or lifestyle costs as well.  So you have to think about how you want to manage these costs and commitments.  Are you receiving a wage locally, or an income from investments back home?  Where is this money being paid to?  Do you have a choice about how you receive this money?  It may be that you have to open a local account to receive a monthly salary.  In which case, which local banks offer the facilities and security you require?  Maybe your bank back home has an international account that you can switch to which will enable you to literally have the best of both worlds i.e., to maintain the key financial commitments you have back home whilst managing your money in your new country all through the same account. 

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