When you move internationally, you have to transfer all aspects of your life to a foreign country. This includes your money. How do you get your money to another country in the correct currency? You can’t just take all the cash out of your account, travel with it, and then convert it in the new country. The following is a list of tips for transferring your money to a new country for an international move.
Setting up a bank account in your target country is one of the first steps you should take to transfer your money overseas. Different countries’ banking systems require different things during the application process, so be sure to research what is necessary. Be sure to start the application process at least a month before you plan on moving.
If you have a family member already living in the other country who has a bank account, you may consider transferring your money directly into her account. Most banks will do this if the overseas account is affiliated with your domestic account. In some cases this can be done without a fee. If you are fortunate enough to have a future or current spouse, or any family member who you can trust to handle your money at your destination, this is the easiest way to get your money overseas without losing much in the exchange.
Opening a bank account overseas requires a little more verification that opening a bank at home. There is no way to know exactly what might be required to open a foreign bank account, but the trustworthy ones probably require foreigners (you) to provide additional information and verification. There are several things you may need to provide:
- your name, address, date and birth, and other personal information
- assurance that you plan on using the funds legally
- financial references from your current bank account
Be wary of exchange firms and their rates. Certain transfers carry fees, and exchange rates can fluctuate by percentage points. If you are transferring a large amount of money, these percentage points can cost you dearly. Be sure you find a good rate, and try to go through a sturdy banking system. Some international transfer firms can collapse, and if they have your money there is no guarantee that you will get it back. Banks are much more reliable for transferring money internationally when you are moving to the country yourself.
Be sure the foreign bank you choose is stable. In some less developed nations, there are less restrictions on banks and they could be corrupt or unstable. Finding foreign branches of banks you would use in America is ideal, but if it is impossible be sure to check out any smaller bank before you let them handle your money.
Get a foreign credit card. The advantage of using a credit card overseas is that you will have to convert less of your American money to the foreign currency. Having your money taken directly out of your account means the sometimes messy physical currency transfer process can largely be avoided. This is especially helpful if you plan on remaining a US citizen, since it will limit the amount of foreign currency you will need to carry back to the US whenever you return.
Remember that you will be paying taxes both at home and abroad unless you have permanently moved to the new country. If you still own property and remain a citizen in the US, you are still responsible for paying taxes even if you are living overseas. Additionally, if you make money overseas as an American citizen, you still need to file that income in the US for tax purposes. You will probably need to pay taxes in the new country on any income or property you have there. You could be paying taxes on your income twice, so be sure to consult with an accountant or financial advisor with some international experience. You’re going to want to look for as many tax loopholes in both countries as you can find.
Don’t transfer all of your money into a foreign account. You will want to keep some of your funds in your home country for tax purposes, but also as a security net if something goes wrong with the foreign bank. Even if you plan on moving to another country permanently, your US citizenship will remain unless you formally renounce it, so you can always maintain a bank account in your home country.
Maintain dual bank accounts. Most US bank accounts can be accessed and managed entirely online, so while you are in a foreign country with a separate foreign account, it should be relatively easy to manage your old American account. You should not totally close your American account.