Working Abroad - 10 mistakes made by expats

Ten Worst Mistakes Made by Expats:

Gavin Pluck, European director at Guardian Wealth Management, warns of the 10 worst mistakes people from the United Kingdom make when moving abroad:

• People often underestimate the cost of living in a new country by assuming the cost of essentials in a new country will be comparable to those in their country, but countries like Switzerland can be far more expensive than the UK.
• Likewise, correctly estimating moving costs means taking into account foreign exchange rates, as well as fixed and one-time costs such as legal fees, expenses for purchasing and renting property, and local administrative fees and taxes.
• Being in new, exciting surroundings may lead to overspending to take in the new cultural experience, without keeping enough funds on hand for emergencies.
• To meet financial obligations retained in the UK, expats need to factor in exchange rate fluctuations, and should try to obtain a six- to 12-month fixed exchange rate when possible.
• It is equally important to understand the local tax system and how taxes will affect the family budget. An experienced international financial advisor can help develop a sound financial plan.

Other important legal and financial considerations include:

• Updating wills that will be recognized in the new country of domicile.
• Setting up an overseas bank account to avoid excessive bank charges for domestic payments.
• Informing the HMRC by completing Form P85 to avoid having to pay taxes in both the UK and the new country of residence.
• Life insurance policies should be checked and updated to be sure they provide coverage outside of the UK.
• National insurance contributions to pensions set up in the UK must either be maintained if planning to return later in life, or an alternative pension plan should be set up.

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Cultural Issues - Mergers and Acquisitions

Companies in Mercer Study "Very Concerned" about Top Talent Departure

Only a small number of companies analyze cultural issues as part of their integration plans for mergers and acquisitions, according to feedback from global human resource leaders attending Mercer’s M&A Ready™ workshops. Only 25 percent of respondents indicated their company had a process for addressing cultural issues to ensure more successful business integrations.

According to Mercer, most companies seem to have a strong awareness of culture and talent issues in M&A situations. Regarding the risk of top talent departing the organization following an M&A transaction, virtually all attendees said they were concerned, with 46 percent saying they were “very concerned.” When queried about the level of prominence of people issues in M&A situations, 64 percent of respondents said that people issues are more prominent today compared to one or more years ago.

“It’s a concern that well considered cultural integration plans and processes are seemingly absent in many organizations planning M&A deals,” said Chuck Moritt, senior partner in Mercer’s M&A consulting business. “While many acquisitive organizations are aware of culture-related risks that surface in transactions, few organizations are doing enough to mitigate those risks ahead of time.”

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Working Abroad - UK Income Tax

UK Creates Tighter Rules for Expats' Income Tax

Under a proposed rule, British non-residents who work more than 20 days a year in the United Kingdom will be subject to taxes on their worldwide income, according to a report by Arabian Business. The rule could take effect on April 6, 2012, and signifies the country's efforts to tighten residency rules to boost tax revenue, according to Spencer Lodge, regional director at PIC deVere. HM's Revenues & Customs has issued a consultation paper on the planned rule, which considers individuals who spend more than 182 days in the United Kingdom as residents who are responsible for paying income tax. In addition, expatriates who spend between 10 to 182 days in the country would be tested for non-residency status based on factors like whether family members live in the United Kingdom, housing, and employment, Lodge said. He added that the new rule could affect thousands of expatriates from the Gulf Cooperation Council (GCC) region of the Middle East. The Institute for Public Policy Research Data estimates that 5.6 million UK citizens currently live abroad permanently while 500,000 do so temporarily.

MENAFN.com (07/28/11)

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Working Abroad as Expats

Singapore now more expensive than Hong Kong:

According to human resource firm ECA International, it said the Singapore dollar, which has surged by more than 10 percent against the US Dollar, pushed the city-state to third place above Hong Kong, with Japan and South Korea remaining the two most expensive countries.

ECA International carries out a survey twice a year by measuring a basket of common items purchased by expatriates in more than 400 locations globally, such as dairy produce, vegetables, clothing and meals out.

The survey does not include housing, utilities, car and school expenses as these items can make a significant difference to costs but, the firm says, are often compensated for separately in expatriate packages.

“While we are seeing price increases in a number of Asian locations, the main reason for Singapore’s rise in our ranking over the past 12 months is the strength of the currency,” says Lee Quane, the firm’s regional director.

He said allowances paid to protect the purchasing power of employees on long-term assignment in Singapore are now higher than those paid to international executives posted in many other financial centres.

In the latest ECA International survey, carried out in March, Singapore had leapfrogged Hong Kong to occupy sixth position in a list of the 10 most expensive Asian cities.

Tokyo was followed by Nagoya, Yokohoma and Kobe, while South Korea’s capital Seoul was ranked fifth. After Singapore and Hong Kong, Beijing, Shanghai and South Korea’s port city of Busan were the most expensive Asian cities for expatriates.

Globally, Tokyo heads the top 10 list followed by Oslo, Nagoya, Stavanger in Norway, Yokohoma, Zurich, Angola’s capital Luanda, Geneva, Kobe and the Swiss capital of Bern.

(Original Source : TODAYonline)

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