Four Expat Investment or Financial Planning Considerations
By Don Freeman
This week we will discuss four of the 8 Expat investment considerations,
the column will continue next week. The following are some of the key areas you
will need to have a plan for and likely consult with knowledgeable experts
· Exchange Rate or Remittance Planning. If your income is largely fixed and
denominated in a currency different from the currency of the country you are an
expatriate in, you will need to have a plan for dealing with exchange rate
fluctuations as well as the transactional cost of remitting your money to you.
In the worst case scenario where the exchange rate makes a big and sustained
movement not in your favor, you may have to plan on making major cut backs on
living expenses or even return home.
· Inflation Planning. Chances are, your home country has low inflation as well
as low interest rates, but emerging markets like Thailand tend to have much
higher rates of inflation that your income or investment returns will need to
keep pace with while keeping risk in mind as high returns can often mean higher
risk of losses.
· Emergency Planning. As an expat, you need to tie up cash in a much bigger
emergency cash fund than you would otherwise need to back home. This emergency
cash fund should be large enough to cover things like medical emergencies where
cash may need to be paid upfront or to cover repatriation to your home country
should you need to return home. You also need to keep in mind and plan for the
likelihood that various social welfare entitlements like unemployment
compensation or disability from your home country probably won’t cover you while
living abroad and you may even need to reestablish residency back home in order
· Tax Planning. If you are an expat from certain countries like the United
States where there is worldwide taxation or maintain a residence in you home
country, you could face double taxation (unless there is a tax treaty in place)
- meaning you need to consult with a tax expert to find out what taxes you and
your investments could be liable for as investing in various offshore
investments marketed to expats as a way to lower taxes may actually not make
Don Freeman is president of Freeman Capital Management, a Registered Investment
Advisor with the US Securities Exchange Commission (SEC), based in Phuket,
Thailand with over 15 years experience and provides personal financial planning
and wealth management to expatriates. Specializing in UK and US pension
transfers. 089-970-5795 [email protected] gmail.com.
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