Relocation Abroad is More Than Just Performing Your Job

The following article about relocation abroad is written and contributed by Forex Traders.

The era of globalization is upon us, and, as interconnected as our markets might be, multinational corporations still need to shift employees across the globe even when local markets offer deep and experienced pools of talent to draw from. Reasons may vary from accepting an executive promotion from the home office, heading a new market initiative to build a foreign presence, or even to working on a key project with a defined multi-year timeframe.

Many multinational companies have departments that will support your effort to relocate overseas. However, the level of support is often tied to how far up the executive chain your new position resides. It is highly advisable that you become educated in all of the issues so that your questions can be direct to your support staff and that you understand completely which matters may garner support and which items will be totally your own to handle.

There are many guides and books on this topic to assist you. Your employer will more than likely have a policy manual on the topic as well, unless you are one of the first ones to head an overseas initiative for your company. There are many issues to address, but here are a few questions to contemplate:

• How long must you be overseas? The answer here is critical to whether you must move your family or allow them to stay in your home. Temporary assignments overseas are common in the 1-2 year range. For short timeframes, it is advisable to leave your children in school and have your spouse maintain the family household. Visitation allowances would be a “must have” in this case.
• What do I do with my home? If you rent, there is no problem. Your lease may allow for this type of relocation abroad or your employer will handle the lease termination. If you own, you may want to consider renting it while living overseas and storing your furniture in order to have your residence available on your return.
• How will you be paid? Your answers to the first two questions will influence how you will want to be paid. You will still have obligations for home mortgage and maintenance expenses, rentals, taxes, or other loans. You will also have expenses in the currency of your new home country, but it is best to balance your income between each currency to minimize the need to make material transfers in either direction that necessitate costly currency conversions.
• Are there other foreign currency issues? Most definitely. “Purchasing Parity” is a term that suggests that similar items in different countries will cost the same after eliminating currency conversions. It is a nice sounding theory, but it hardly ever prevails in foreign markets due to supply/demand and cultural issues. You do not have to be an expert in international currency trading to understand that the GBP USD currency pair has fluctuated widely over the past five years. The Dollar is currently at a low ebb in its relative value to other currencies. All things overseas will cost more. Companies traditionally have subsidies for this issue in the form of cost-of-living adjustments, educational allowances, and housing support payments. Be sure to ask about these programs.
• Are there tax issues? Most certainly, and your employer will help you with these.

Planning for a relocation abroad is the key, but an overseas assignment can be an adventure for you and your family.