Atlanta is a crossroads for international business and attracts top foreign executives from around the world who come here to work and live, whether temporarily or permanently. Unfortunately while this is an increasingly common occurrence, the transition – financially – is not always smooth. Many highly educated, successful individuals find it difficult to perform such routine functions as leasing a car, securing a credit card or opening a bank account – basic needs for most people who live in Atlanta or any U.S. city.
Leasing a car or apartment can often be the first obstacle executives confront. Moreover, the tax implications of working in a foreign country can be complicated and costly, especially for those who fail to plan ahead. One of my clients who moved to the U.S. intending to stay permanently provides an instructive example. This individual’s priorities changed after he retired and he decided to return to his home country. At that point he learned he would soon qualify as a long-term U.S. resident and be subject to additional taxes. As a result, he had to sell his home and move assets within a matter of months. Had he been aware of the tax consequences of various residency scenarios, his transition could have been more orderly.
What you can do: The complicated nature of living and working abroad is unlikely to abate any time soon. If anything, there is a push for more documentation when accessing financial products or moving cash and other assets between countries. However, the process is manageable if executives are proactive. Below are four preliminary steps that expatriates living in Atlanta can take to ease the transition.
Meet with a local banker: Establishing a local banking relationship will allow you to conduct personal business more efficiently than if you continue using a foreign institution. You should also ask your banker if there are alternative structures available for individuals without a U.S. credit history, such as mixed collateral loans. Obtaining a letter of introduction from your previous bank can help facilitate this process.
If you travel between countries often, your bank should also be able to provide you with foreign currency. While most U.S. retail bank branches do not keep a wide variety of currencies on hand, they can usually order it for a client with a day’s notice.
Begin building a credit history: Because our credit system weights credit scores so heavily, establishing a good credit history should be the first financial goal for those looking to work in the U.S. The payoff is access to myriad financial products and other services, from personal loans and apartment rentals to mortgages. You may be able to begin this process before moving by applying for a credit card from a U.S. issuer. If that proves difficult, consider obtaining a credit card from a retail store when you arrive; often their requirements are not as rigorous. Use the retail card as a springboard to access credit from other financial institutions.
Another option is to take out a collateralized loan. For example, one SunTrust client moving back to the U.S. after years abroad had no credit history and encountered difficulties securing credit. Although she did not have an immediate need for borrowed funds, she took out a collateralized loan against a certificate of deposit (CD) and paid it back over six months, thereby establishing credit.
Just remember that your goal is to build good credit; make your payments on time and pay off balances each month, when possible.
Engage a financial advisor: If you are a foreign national residing in the U.S., your tax situation is likely complex because your worldwide income is subject to U.S. income taxes. If you have assets in other countries, that could trigger U.S. taxes. Moreover, you should understand which types of assets held outside the U.S. may have less favorable tax implications than others.
There are also estate tax implications to consider, especially for those living in the country for a long time. For non-U.S. citizens working in this country, for example, the marriage deduction for estate taxes is not unlimited. Engage a financial advisor and tax professional before tax season so you can avoid pitfalls and potentially reduce your tax bill.
Talk with your human resources representative: If your company moved you to the U.S., it is likely invested in your success and well-being. Set up a meeting with your HR representative and ask about programs for foreign nationals working in the U.S. For example, some companies have arrangements with their primary financial institution to facilitate loans and other financial services for employees. These programs are especially helpful when purchasing a home since securing a mortgage without credit history is often very difficult.
If you are proactive in taking on the financial challenges that accompany moving to a foreign country, you will likely have a successful – even smooth – transition to Atlanta. The resources are there; you just have to know where to look. Furthermore, foreign nationals I have met unanimously agree that the experience they gain is well worth any inconveniences they encounter along the way.
Felicia Speetjens is a senior vice president and managing director at SunTrust Bank Private Wealth Management, and registered representative of SunTrust Investment Services, Inc. She has over 25 years of industry experience and specializes in working with the unique planning needs of corporate executives, business owners and families. Contact her at Felicia.Speetjens@SunTrust.com. (SunTrust Bank Inc. and its affiliates and the directors, officers, employees and agents of SunTrust Bank and its affiliates are not permitted to give legal or tax advice. Clients of SunTrust should consult with their legal and tax advisors prior to entering into any financial transaction.)