Cross-Border Wealth Management Questions to Ask Before Moving Abroad

Moving abroad isn’t as complex as it used to be. Thanks to the growing ease of mobility, especially between globalized economies, people can readily shift their base once their papers are in order. However, the idea of moving can be a far cry from the reality. It is often not the culture or rules that people find challenging to navigate, but wealth management. Financial matters and tax regimes, which can be daunting enough to comprehend in one’s home country, can become even more complicated abroad. A minor misstep at the start can snowball into a long-term burden. Here are some questions that can help you avert such occurrences.

1. Should I Move My Financial Base Too?

With the global shift toward work-from-home policies, it’s not uncommon for people to live and work in different countries. The number of “digital nomads” has risen significantly in recent years. However, such globetrotting professionals often maintain a financial base in their home countries, with decisions rooted in long-term or retirement plans, proximity to family, or familiarity with local laws. Before moving, it’s crucial to decide whether you’re willing to have more than one financial base. If so, you must fully understand the pros and cons of managing finances in multiple countries. While having multiple bases can offer geographical diversification, it can also introduce complexities in cross-border transactions and insurance.

2. Should I Change My Wealth Management Strategy?

In recent years, many countries have revamped regulations in financial markets due to widespread economic volatility. As a result, those emigrating may not be able to retain their existing wealth management strategies entirely. If you become a naturalized citizen in your new country, you may be prohibited from investing in various asset classes in your home country. Dual citizenship can allow investments, but often with restrictive conditions. Regardless, moving abroad will require you to reassess your portfolio, rebalance it according to changed circumstances, or liquidate it to establish a new one in your new country. Since market forces vary between countries, the same strategy may have different financial consequences.

3. What Are the Tax Implications of My Emigration?

When moving to a new country as an expat without relinquishing your original citizenship, you will remain subject to your existing tax regime. However, non-resident taxation can differ from resident taxation, making it crucial to conduct your due diligence beforehand. Taxation is a significant factor in determining whether to maintain one or multiple financial bases. Some countries offer tax-free growth and withdrawals on retirement accounts, which should be considered even if retirement is far off. Expats may face increased regulatory scrutiny and potential penalties due to perceived opportunities for tax avoidance.

4. What About Estate and Inheritance?

One of the most overlooked aspects of wealth management during emigration—especially among younger individuals—is estate and inheritance planning. While a will may entitle you to assets inherited from parents or benefactors in your home country, the succession laws of your new country could create hurdles. Inheritance laws, often influenced by religious and cultural practices, can lead to conflicts stemming from changes in residential status. Even after the probate process, beneficiaries might encounter challenges in liquidating assets and transferring proceeds to their new country. Proactive and methodical estate planning can help circumvent these potential issues.

5. Should I Change, Retain, or Add a Financial Advisor?

Financial advisors play a critical role in cross-border wealth management. Those emigrating permanently often seek new financial advisors to help ease the transition, which makes sense, as many advisors limit their services to their home countries due to regulatory complexities. Conversely, individuals maintaining multiple financial bases with long-term considerations—such as estate planning—may choose to retain their existing advisor while also commissioning a new one for relocation and subsequent wealth management. The emergence of cross-border financial advisors has simplified the emigration process, allowing individuals to continue their working relationships regardless of geographical barriers.

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