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Expats and COVID-19: Beware of the issues other than health!

One of the key points coming out over the recent weeks about COVID-19 is the unintended impact it has had on the movement of global expats.

While many global expats are naturally focused on the potential health effect of the virus on themselves and their families – other more costly negative impacts are lying in wait to cause major issues.

Please read on and be careful COVID-19 does not hit you in ways you don’t expect.

Rushing to become an expat

Our evidence is that many companies and businesses are speeding up the deployment of expat executives to beat border shutdowns which are anticipated to come into effect.

While this is understandable from an employer perspective – making an employee move sooner than they plan – can negatively impact them in the areas of:-

  • tax management,
  • insurance planning for both life and property,
  • investment and pension management,
  • housing,

and more generally across the spectrum of their lives.

People need ‘time to plan’ in the above areas to make sure they get it right.

Leaving your home country sooner than you intend can trigger a tax disposal of your worldwide assets for tax purposes in some countries like Australia and Canada. Thus, being sure of the market value of some assets and being clear about what assets you are ‘taking’ into the new host country is important.

If you are speeding up your departure – things will slip through the cracks.

These mistakes can be challenging to recover from.

For example, you may arrive in your new country – uninsured medically (you or your family) and then suffer a health incident – COVID-19 or non COVID-19.

Wittingly or unwittingly there can be serious problems caused by failing to plan.

A recent case of a client moving to the US is illustrative.

The client left their home country and their family home empty as they planned to rent it.

This dragged on for a couple of months and they failed to notify their insurer of their move overseas or that the house was empty.

Following a storm and some rain damage – quite normal – the insurer denied the claim for water damage on the basis that the home roof leak would have been noticed earlier in the ordinary course of events (if they were living there as per their insurance coverage) and the excess water damage was greatly exacerbated by them being absent from the home.

Simple issues like this can be avoided by planning and working through our Expatland checklist.

Beware of hurrying home

Likewise – expats scurrying home can leave a host of other issues unresolved.

Many employees have stock options or other share plans. Not considering the consequence of arriving home with these share plans means – no time to plan and tax liabilities being triggered when they might otherwise have been managed.

Coming home earlier than you plan might mean that the cost base of assets you bring into a country, like shares, happens when the share price is much lower than what you bought the shares for.

Australia, for example, would give a deemed cost to a returning Australian expat based on the market value of the shares at the date they resumed Australian tax residency.

As global stock markets have been in ‘free fall’ many expats will be return home with their international share portfolios – in loss territory.

A year or two from now these shares may be back up to what they originally cost.

However, that is a ‘capital gain’ in the eyes of the Australian Tax Office.

Selling the shares ‘at cost’ would yield a capital gain.

Apart from tax, a returning expat has to deal with cancelling leases or leaving behind financial obligations in their host country. This might be a long-term saving plan contract – which requires you to make a monthly payment – which is no longer something you want to do when you leave the country and return home.

There may be penalties if you stop making contributions to some savings plans.

Hurrying up to get home – can be just as fraught with financial risk management issues as leaving for Expatland.

Our advice is for you to think carefully through any move and to realise that the Expatland Global Network is here to help you.

Our E-Teams are full of experienced professionals who know what to do in most situations. They can very quickly provide you with the advice and guidance you need to ensure you are fully aware of the consequences of your move. Once you know understand the risks, you can make more informed decisions.

For more info on how to cope with these and other issues please contact us and we’ll be happy to connect you with an E-Team member that can assist.

Enjoy the journey and keep safe!

The Effect of the Coronavirus on Expats

Expatland is a country based on the idea that people have freedom to move around the world in search of certain benefits. Studies show that one of the main reasons for relocation is to improve one’s financial position.

So what is the situation in Expandland during the unprecedented COVID-19 coronavirus outbreak? At a time when finances are at risk, and worry for family and loved ones at home are high – what choice will expats make – to stay in their host country during the crisis or to return home? How will the current situation affect expats’ life?

Capability of the host country

The actions that expats take and the decision to stay or to return varies based on how the host country deals with the crisis. The countries of Southeast Asia that experienced  SARS several years ago, in general, were more prepared and acted faster; quick response, joint efforts, high social responsibility of the population gave viable results and has contributed, to date, to getting a handle on the spread of the virus.

Expats in Southeast Asia

 According to expats in Hong Kong, Vietnam, Singapore, South Korea and China – the governments’ approach to coping with the pandemic gave them confidence in their own security. High consciousness of the population, which followed the simple rules of social distancing and disinfection, brought order into initial chaotic moods.

Needless to say that countries with high migrant rates were most vulnerable to the fast spread of the virus – intense human flows in and out added up to the total number of registered cases. However, this negative effect was offset by the high levels of public trust in the government: most countries of South-East Asia have trust levels higher than the world average.

Expats in Africa

Unlike the South-East Asian region, where there was no mass exodus of expats – in the African countries the situation is quite different. Many expats made decisions to flee the countries, despite the fact that governments in that region have made efforts to follow and implement WHO guidelines. The core problem there is that the number of locally transmitted cases of coronavirus is equal to almost zero, while the majority of cases were “imported” by Europeans, coming from the epidemic sites.

The above, combined with a weak healthcare system, which would not be able to survive the mass outbreak of infection, provoked manifestations of discontent towards expats by the local population.

Many expats chose to leave their host countries and return home, at least for a while, although some do not exclude the possibility that in the future the local population attitude towards foreigners will continue to have a negative effect, people will see them as a potential threat to their own health.

Expats in Europe

Expats, who live in Europe, mostly decided to stay, according to the information from the Chambers of Commerce in some countries. Some expats have indicated employment policies (in relation to sick leave) and the healthcare conditions are better in the host countries than in their home countries; many of them are married to locals and, those working in executive positions, considered that in hard times they should stay with their employees.

Looking at the positives

The aftershocks of the COVID-19 pandemic are still unclear. However, some positives in a time of uncertainty, could be that many expats locked down in their homes may come up with new ways of doing-business, reasonably adapting their work processes to the new realities and employing more capabilities of modern technologies.

James Cowper Kreston Budget Update

The Chancellor of the Exchequer will unveil the new Government’s first budget on 11th March 2020.

Our London E-Team Co-Group Leader, James Cowper Kreston, are hosting 2 seminars and a webinar at which they will cover the main changes that have been announced and how these will impact you and your business.

During the events particular attention will be given to any changes in:

  • Tax efficient profit extraction
  • R&D tax relief
  • Capital allowances
  • Tax planning opportunities
  • VAT & Customs Duty
  • Tax allowances
  • Inheritance tax
  • Capital gains tax

Date: Thursday 12 March 2020

Locations and time:

Newbury Racecourse, Newbury, 8.00am -10.30am (local time)

Solent Conference Centre, Southampton, 12.15pm -2.30pm (local time)

Webinar, your desk, 1.00pm -1.45pm (local time)

To Attend:

Please email Lizzie Uzzell stating which event you would like to attend.

Please click here to register for the webinar.

Global Expats & Wealth: Some interesting stats

Often inbound expats are seen as imposing a cost for the government of the host country.

There are a number of reasons for this , including funding its immigration system to deal with issuing work visas and naturalization procedures. In some cases there are legal expenses of deporting people who overstay their visas.

Then there are a range of other costs including public infrastructure costs, healthcare and education costs.

While dealing with expats can be an initial economic burden, it is clear that at the same time an inflow of expats brings positive effects to the economy, providing a positive impact on GDP.

Expats contribute to a country’s wealth

A recent study on world wealth shows some interesting figures: the leader in the overall wealth ranking is the US with $60.7 trillion in assets owned by individuals (property, cash, equities, business interests) minus liabilities.

It is not coincidental that the US (as the wealthiest country in the world) is also the world leader in the total number of migrants, outnumbering the second wealthiest country on the list, Saudi Arabia, by 37 million people.

The US is on the top 10 list of rankings based on wealth per capita, while China, Japan and India with inflow of expats of less than 0.2% (while following closely following the United States in the overall wealth list) are way down the list in terms of per capita findings.

Expats bring new skills to host countries

Countries with the highest percentages of expats among the total population – more than 70% – Saudi Arabia, Qatar, Kuwait, UAE are not surprisingly among the top 5 destinations, voted by expats as having the best opportunities for personal financial growth.

The oil sector is one example of an industry where expat workers earn more than local workers. Taking the UAE as an example, the average expat Oil and Gas worker earns  $USD127K per annum, while the average income for locals in the Oil and Gas sector is just $USD46K.

It is worth mentioning that according to the HSBC report, UAE has the highest percentage of working expats – 92%, with the top industries being finance and engineering.

Continuing down the list of the countries with the highest migration rates, next comes Monaco and Lichtenstein (more than 45% of total population); wealth per capita in Monaco reaches astonishing $2,144,000, Lichtenstein follows with $786,000. The expats contribution to these numbers is undeniable: while the Gulf countries attract mostly global employees, European countries attract more entrepreneurs than employees.

Expats not only bring their knowledge to the new communities, but these 3% of the world population, who live “on the move”, contribute to the prosperity of their host countries by relocating their financial wealth and spending it in Expatland.

The Finder Toasts The 2019 Expatpreneur Awardees

The Finder celebrated the Expatpreneur Awardees with a lunch at mezza9 at the Grand Hyatt in Singapore on 31st May 2019.

Our founder, John Marcarian (pictured above), as the Longevity Award winner joined the other awardees to celebrate this year’s winners.

See more of the event on The Finder website.

Singapore E-Team volunteer for HWA Wheel Walk or Jog and Family Carnival 2019

Members of our Singapore E-Team took part in HWA’s annual Wheel Walk or Jog and Family Carnival.

Held on 27th April at the Esplanade Park, the event includes a family carnival followed by a walk or jog with HWA wheelchair-bound members along a scenic route not more than 3.5km.

Volunteers are paired with HWA wheelchair-bound members and assist them throughout the day.

A big thank you to all the E-Team volunteers. A great day was had by all.

 

Expatland at the Houten Emigration Expo

We will be at the Houten Emigration Expo on 9-10 February 2019.If you are going to the Expo come to our stand and meet our team.

Hear from our Founder, John Marcarian, as he explains what our E-Teams do and how they can help you move and settle in to your destination city.

Download our e-Book in preparation for your move.

If you’d like the personal touch, an Expatland Concierge can contact you and introduce you to reputable service providers in the city you are moving to – just complete our departure questionnaire.