Individuals preparing for an international assignment (assignees) face not only changes to their daily comforts and routines, but also adjustments to a foreign banking system. Often, assignees do not plan for banking services they'll need during their relocation. For example: salary and expense payment, cross border money movement, investment supervision, and liquid investment products. Additionally, assignees are not always aware that it is possible to establish a U.S. banking relationship prior to moving or they may assume their company will recommend a financial partner to them. These assumptions can lead to headaches and hassles down the road for international assignees.
To best prepare for an international assignment, it is critical to ensure one's financial house is in order and be aware of the minimum financial products and services to keep that order. Here are common international assignee misconceptions:
1). I will only need currency from my home country.
This is not always the case. There are many instances where an assignee will need to maintain a banking relationship in their home country. For example:
- An employer may pay all or some salary and expenses in home currency
- Assignees may receive payments from a rental property or investments in their home country
- Family members remaining in the home country may rely on financial assistance
2). Credit will not be a problem; I have an excellent credit history in my home country.
Credit histories don't transfer from country to country. Prepare for this challenge by partnering with a reliable financial institution prior to relocation and ensure adequate funding is in place incase securing a car loan, apartment, or credit card prove to be a challenge.
Assignees that leave their home country for an extensive length of time without maintaining a credit history may also face difficulties securing credit upon repatriation. If you plan to return after your assignment be sure to utilize at least two of your most established credit accounts while aboard to keep your history active.
3). My home country bank has a branch where I'm relocating so I won't have to worry about accessing funds.
Many banks do not operate on a global platform and overseas branches may act autonomously from their parent. Branches may be limited to the types of products and services they offer since they are subject to country-specific regulations. Prior to moving make sure to know the restrictions and requirements imposed on foreign nationals as security measures and documentation requirements are constantly evolving. Typically, a bank account for a foreign national cannot be opened quickly and documentation requirements can be complex and vary from country to country (sometimes even branch to branch). It's important to partner with a reputable bank experienced in relocation assistance who can navigate through the regulations employed in the host country.
4). I won't need in-country currency; I'll use my (home country) debit card for majority of my transactions.
Relying on a home bank account, while living abroad, is not the most prudent choice for managing funds or transacting business. A home bank can set daily transaction limits which may not be high enough to meet all financial needs. Additionally, transaction fees and exchange rates can quickly accumulate if multiple transactions are made per day. Establishing a bank account in the host country prior to arrival is the most advantageous choice for managing daily business.
Choosing the right financial services provider to guide you through your transition is important and takes careful consideration. Make sure the provider is reputable and experienced in serving foreign nationals and able to open accounts prior to departure. A provider that employs a separate division for international banking with a multi-lingual staff is ideal. Be cautious of institutions that do not have an established service for foreign nationals but offer to make you an ‘exception', exceptions should not replace experienced and established service. You never know who will be conducting future account reviews.
When deciding on a financial services partner remember to look for these key offerings:
- Protection from exchange rate volatility
- Remote access to standard banking accounts and bill pay
- Pre-departure account opening and multichannel account access (online, phone, email, fax)
- Debit and credit cards in the host country's currency
- Cross-boarder payments (wires, remittances)
- Personnel familiar with international assignments foreign national's requirements
By knowing the financial hurdles prior to leaving, you can combat common mistakes and arrive in your new home financially prepared.