Shai Zamanian, founder of The American Legal Center, U.S. licensed attorney and EB-5 specialist.
Today’s global economy demands a diverse workforce. With the rise of international trade, the growth of multinational corporations, and the increasing interconnectedness of the world, organizations are more cognizant of the importance of setting up satellite offices abroad and having a workforce that reflects the diversity of their customer base. A perennial example is Apple opening up their latest retail store in Mumbai and manufacturing facilities in India. India is the world’s second-largest mobile market in the world, yet only 4% of India’s smartphone users have iPhones. As Apple and other conglomerates continue to expand their reach and grow their market share, they will continue to set up offices abroad. As the workforce contends with the idea of working abroad, what are the major considerations for both the expat worker and the company looking to expand its horizons? Navigating the transition as an expat working abroad requires consideration of the below factors.
1. Cultural Differences
As every country has its own unique culture, customs and etiquette, it’s quite common for expats working abroad to experience culture shock. It’s essential for expat workers to familiarize themselves with the local customs, including business practices, communication styles and social norms. Understanding the culture of the country in which you are living and working as an expat can help you in avoiding misunderstandings and to build relationships with your colleagues and clients.
There are incredible places to live and work abroad, but laws and rights can differ greatly among countries. Organizations and expats need to consider cultural and political differences before doing business or moving to these areas. Ask yourself: What are the cultural norms and values in the host country? How different are the communication styles and how drastic is the language barrier? What are customs and norms around work and business practices? Discovering the answers to these questions can help in avoiding misunderstandings and conflicts in the workplace.
2. Visa And Legal Requirements
Depending on your destination, you may need a work visa or other legal documentation to work abroad. It’s important to research the requirements and ensure that you have all the necessary paperwork in place prior to relocating. How fluid is the residency renewal process in the host country? As humans tend to err from time to time, businesses and individuals should recalibrate their attrition rates based on common human transgressions. There are many nations abroad that will deport persons for what could be considered more minor offenses.
Another legal consideration, one that’s especially important to expats with children, is preparing a new will that is valid in your new country of residence. It may be beneficial to have multiple wills for different jurisdictions so that it can swiftly be put through probate. Every jurisdiction has its own set of rules and regulations when it comes to probate and the transfer of assets upon unexpected deaths. You must educate yourself and your business and accept the rules abroad, as no particular person is exempt.
3. Social Support
Moving to a new country without an existing support system can be challenging. As an expat, you should consider building a sense of home away from home to deal with your new environment. This can be done through joining expat groups or social clubs to meet other expats. While embracing your new community is important, it is also quite helpful to set up group meetups prior to even embarking on your flight over. Companies can cultivate more social gatherings in their offices abroad to better transition employees.
Other considerations would be monetary support should you become ill or lose your job. Is there a social security net that provides for health care or job loss abroad? Understanding the types of support important to the individual or organization would be critical in then knowing if the host nation abroad would accommodate or whether the burden is on the company altogether.
4. Financial Considerations
Living abroad can be expensive, and it’s important to understand the cost of living in your new country. You may also need to consider tax implications, healthcare costs, and other financial considerations. Prior to making the move, you must do your research on the cost of living in your intended country of residence and determine whether your salary would cover the cost of housing, transportation, food and other living expenses. In addition to cost of living, you must consider the tax implications as you may be liable to pay taxes in both your home country and your new country of residence, or alternatively, you may be eligible for tax breaks or exemptions. You should also think about restructuring your various policies such as life insurance or income protector insurance to reflect your new earnings. Additionally, you may have to alter your retirement planning by considering different retirement saving vehicles.
While working as an expat in another country can be rewarding, this experience comes with its own set of unique challenges. By carefully considering the above factors and being prepared, you can make the most of your experience working abroad as an expat.
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