Interestingly, the urge by people to visit new countries and either settle down there or just experience the nature present is increasing daily, and this isn’t going to end anytime soon. Although living and working abroad may be an exciting experience for some, others are looking forward to enjoying the natural havens and environment present in the country that they visit.
However, before deciding to move and work abroad, there are some basic things that you have to put in mind before embarking on the thrilling journey. In fact, whichever reason may be responsible for your working abroad, you need to know that there are challenges and solutions that will come as time goes on.
In case you don’t know, people who live and work abroad are known as ex-pats, and they either reside in a foreign country for reasons that may include retirement or having citizenship status. Most times, Expats do think that things may be the same in the country they reside in as compared to their home nation, and this can lead to a lot of challenges coming their way since they aren’t able to make adequate preparations.
Sometimes, it may be difficult for expats even to adjust because of the different cultures and mindsets in which locals present there operate. That’s why having an idea about some basic knowledge of moving to a new place other than your home nation can help reduce the challenges you’ll face.
Without a doubt, there are some issues that expats should take seriously when moving to a location abroad for work or other purposes, and one of them is taxes. For instance, American expats that have a basic, concrete idea about how taxing works in their foreign place of residence can find it very easy to enjoy the tax benefits and avoid challenges with the authorities of the abroad nation.
While being an expat is a great way to enjoy life, knowing about some tips to help as you explore a foreign country can ensure that your journey is full of thrilling experiences and fewer issues. These tips can help you successfully navigate your personal and professional career while acquiring excellent work experience.
Understanding the Physical Presence Test
Did you know that one of the things that expats should have a sound idea about is the taxing systems both in their home nation and foreign place of residence? However, American expats do have the upper hand through the available types of different tax credits and other options, which can help them to avoid either paying double taxes or even enjoy the benefits that come with them.
For instance, one of these is known as foreign earned income exclusion (FEIE), and it’s a significant tax credit that allows expats who are qualified to omit some particular percentage of their foreign earned stipend from the United States Taxable Income. However, to be eligible for the foreign earned income exclusion, American expats need to ensure they pass one of the compulsory two tests, which include legal residency and physical presence test.
Since we want to take a look at the physical presence test, we’re going to discuss it in detail and explain everything concerning it. The physical presence test is a capability test that the Internal Revenue Service (IRS) can use to deduce if an American expat is qualified for the foreign earned income exclusion.
There are some particular criteria that individuals should possess before they can be eligible and able to pass the physical presence test, and they include the following:
- A United States citizen or Green Card holder
- A tax home in a foreign location
- Registered physical presence in a foreign country for at least 330 days (complete 24 hours) out of a possible 365 days in a year
- A foreign-earned income
Understanding the physical presence test helps you to avoid facing challenges with the taxing systems of your foreign location and helps you to enjoy the benefits accrued with having a foreign earned income exclusion (FEIE).
Things Expats Should Know Before Working Abroad
Now that digitization is in full force, most individuals, especially the millennials and Gen Zs, do want to explore new locations and see for themselves the wonders present in these places. This drives them to develop an inkling about moving abroad, but while this may be a great thing, they need to know about a few things. Having a few tips at hand as an expat can help you to avoid unnecessary difficulties and as well, enjoy the benefits associated with being in a particular location.
That being said, let’s take a look at some things expats should know when working abroad.
1. Work Permits and Visa Requirements
Most times, some expats make the mistake of moving to a foreign location before coming to understand what their requirement is all about. Before proceeding to work abroad, expats need to thoroughly examine their work permit and what the country they want to reside in requires for their visa. That’s because knowing about their permit can help them to comply with the regulations, avoid having legal problems and gather excellent work experience.
2. Taxation Systems
Undoubtedly, it’s impossible to live in a nation without paying taxes to the authorities to ensure that they do the necessary things. That’s why expats need to contact professionals to know about taxing systems and understand exemptions and liabilities. For instance, there are some unique tax policies in Mexico that expats should follow to avoid penalties from the authorities and to remain in compliance.
3. Safety and Security
Expats should make their safety a priority and carry out some research about the security of where they may want to stay to avoid losing their lives and properties. A good example is knowing about the crime rate of a location, knowing about safety protocols and likely risks, which in turn can help expats make the right decisions and also take precautionary measures to ensure their safety and security.
4. Language Proficiency
Expats can’t come into an area and expect that their home language is the same thing spoken in that particular location. Interestingly, while English may be a language that is well-recognized globally in the world of business, learning the dialect which is associated with where an expat resides can help them develop essential relationships and acquire connections. In fact, when expats can learn the local dialect of their particular foreign area of residence, they can easily communicate and learn new things about the country.
5. Work-Life Balance and Accommodations
Although getting an adequate work-life balance can be difficult for expats working abroad, knowing about work culture and expectations can reduce the challenges. Having an idea about the working hours while creating time for practicing hobbies and visiting site attractions can help expats maintain an outstanding work-life balance. Also, expats should check the housing market, identify the ones for leasing or buying, and check out factors that include work proximity and availability of essential amenities for suitable accommodation.
While working abroad may have a lot of benefits, it’s essential to have some tips about crucial things to avoid facing challenges. There are times when knowing about these tips can help expats successfully navigate their journey in a foreign nation abroad without experiencing difficulties. Some of the things that expats should plan ahead for when working abroad to make their experience better include taxing systems, safety and security, and work-life balance and accommodations.