Currency issues for expats

Currency issues for Expatriates
People who live and work abroad

People leave their own countries to work for various reasons. This reason sometimes has a lot of influence on the way currency fluctuations affect them. There are three basic types of people working abroad. One group works for a company in their home country and is sent overseas for a long or short-term assignment. Some people work for a foreign company in the home country of their employer. Another group works for a foreign company in a country outside of the company’s home country. The ongoing obligations of the expatriate in the home country can be harmed by a negative trend in the currency of their remuneration. A positive trend may be helpful.

Sometimes expatriates are paid in the currency of their home country. In that case a negative trend of the host country could be beneficial and a positive trend could be harmful.

Some people work abroad as a way to subsidize international travel. Teaching English is a popular job for people from the USA, Great Britain, Australia, South Africa and other English speaking countries. The pay is low; but fluency in the foreign language is usually not required and living expenses are usually covered. Working with churches or international aid organizations is also popular.

Often the people who take these jobs are young people or retired people and are able to leave home with very minimal financial responsibility. One thing that makes this type of job attractive is that it affords an opportunity to interact with the local people and build relationships. The access granted is much different that the access given to a tourist.

When working abroad the employee has to deal with tax issues as well as currency issues. A person interested in taking advantage of this option should carefully research the full economic impact. A good starting place is to find and read the tax treaties between the two countries. Often, spending more than a certain number of days in a country will cause the expatriates worldwide income to be subject to tax in more than one country.

There are many other issues to consider when looking for employment abroad. These will be discussed in depth in the week beginning July 23rd. The next column will discuss economic issues other than currency.


David Segrest is a REALTOR in Charlotte, NC

David S. Segrest, CIPS, CCIM, TRC, CEA
david@segrestrealty.com
http://www.segrestrealty.com
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