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Expatriate

By Joshua Wood, LPC

AGS Worldwide Movers
AGS Worldwide Movers

Summary: An expat or expatriate is a person who lives outside of his or her native country or the country in which they grew up.

There are millions of expatriates all over the world. But what exactly is an expat and how has the expatriate experience changed over the years?

What is an Expat?

An Expatriate, often referred to as an expat, is a person who lives outside of his or her native country or the country in which they grew up. This also obviously means that expats live in a culture that differs from their own. Expats move to other countries for many reasons, though the term historically refers to people who move abroad for vocational and career reasons or retirement with the intent of moving home or to another country at some point in time. Expats are different from digital nomads, a far newer phenomenon, in that expats typically live in one location for at least a few years, while nomads are more "nomadic" and move from one location to another after a shorter period of time.

Other people who retire abroad for various reasons and to varying extents are also thought of as expats. Some people retire abroad for a period of time before moving home again later in life when they may need attention and care from their loved ones. There is a growing number of others who lead a digital nomad type of existence - they are just older and often retired from their primary career.

While the term expat historically refers to those who generally are demographically more affluent in the business and government than those who were referred to as immigrants or migrants, there has been considerable change in all of these populations and how they and their experiences are described. Some of the semantics involved around the terms expat, immigrant, migrant and seasonal worker reflects these important changes and the social, economic and political realities involved.

Expatriate Employees

Expatriates frequently work for medium- to large-sized companies, government agencies and other organizations. Historically, they were sent abroad to help establish, grow or improve a business or agency in a particular city, country or region. They are also sometimes called international transferees, global assignees and other related terms. When a married spouse accompany's an expatriate employee abroad, they are often referred to as an Expat Spouse, or a trailing spouse or partner. This is an important element of any international relocation, because the ability of an expatriate employee's family to adjust to the new culture often determines if the move abroad is a success or leads to expatriate assignment failure.

Expats are often offered an expatriate assignment for agreed upon time period for which an expat will be sent to a destination country. This time period varies from organization to organization, but 2-3 years is typical. Expats are often given an expatriate compensation package that is frequently more generous than what other employees in the destination country receive. This is often based upon variations in the cost of living from one country to the next, which is referred to as a cost of living adjustment.

Localization refers to a transfer in status in how an organization treats an expatriate employee from a salary, compensation and benefits standpoint. Instead of getting an expatriate package, the compensation will be determined by how local employees are paid and otherwise compensated.

Expatriate Finances

The financial implications of life as an expat can be quite challenging and complicated. This is especially true for American expats, because they have to take special care to minimize the impact of double taxation.

The Foreign Earned Income Exclusion (FEIE) is a U.S. tax law provision that allows U.S. taxpayers who live and work abroad to exclude a certain amount of their foreign earned income from their U.S. federal income tax. The purpose of this rule is to alleviate the potential for double taxation (being taxed by both the foreign country where income is earned and the U.S.). It does not apply to investment income.

It is also important for U.S. expats, who the IRS refers to as U.S. citizens and resident aliens abroad, to be familiar with Foreign-Bank-and-Financial-Accounts (FBAR) and Foreign Account Tax Compliance Act (FATCA).

Retirement Abroad

More and more people consider retiring abroad for many reasons. Some people believe that retirement abroad is the next adventure after wrapping up their career, while others choose to live abroad to stretch their income and enjoy a certain standard of living.

For those who decide to move abroad to explore the world and experience all that international living has to offer, there are an ever increasing number of options to consider. Whatever your interests or preferences are, there's an exciting destination out there waiting for those who have the spirit, tenacity and organizational skills to make it happen.

For those seeking to stretch their retirement funds, it's important to remember that there can be a significant number of hidden costs in moving abroad and they need to be considered carefully before making any decisions.

Regardless of your income, it's important to be prepared and avoid the pitfalls that can a retiree in any income bracket.

Expatriate Artists

There is a rich and fascinating tradition of expatriate artists throughout much of history. Artists have often find themselves drawn to foreign lands, where they seek inspiration, escape from their native cultural confines, or interaction with a vibrant artistic community.

In the late 19th to early 20th century, especially during the period between World War I and World War II, writers such as Ernest Hemingway, F. Scott Fitzgerald, and Gertrude Stein were part of a prominent expat community in Paris known as the "Lost Generation."

Many European actors and filmmakers moved to Hollywood around World War II, such as Billy Wilder from Germany and Alfred Hitchcock and Charlie Chaplin from the UK, who both had enormously successful careers in the American film industry. Audrey Hepburn, who was born in Belgium, had a successful Hollywood career, as did Greta Garbo, who moved from Sweden to the United States in the 1920s. Nicole Kidman, Margot Robbie, Hugh Jackman, Daniel Craig and Idris Elba are just a few of the actors from abroad who are presently working in the entertainment industry and spend a considerable amount of time living in the United States.

Conversely, there are a great many entertainers who are U.S. citizens who have moved to Europe. Grace Kelly, who starred in such films as Dial M for Murder and Rear Window, became Princess of Monaco and moved to the sovereign city state on the French Riviera after marrying Prince Rainier in 1956. James Baldwin, the influential writer and social critic, spent most of his adult life in France. Jazz musicians like Miles Davis and Dexter Gordon spent significant time in Europe, attracted by the continent's receptive jazz culture.

Expatriate Research

Expatriate research has been conducted for decades and has tracked major trends in human resources management of expatriate programs, other aspects of corporate expatriation, cross-cultural adjustment, expatriate family issues, repatriation, and much more. Historically, it has been conducted by the academic community and professional services firms. More recently, expatriate research also has been conducted by several online communities that support expatriates.

About the Author

Joshua Wood Joshua Wood, LPC joined Expat Exchange in 2000 and serves as one of its Co-Presidents. He is also one of the Founders of Digital Nomad Exchange. Prior to Expat Exchange, Joshua worked for NBC Cable (MSNBC and CNBC Primetime). Joshua has a BA from Syracuse and a Master's in Clinical and Counseling Psychology from Fairleigh Dickinson University. Mr. Wood is also a licensed counselor and psychotherapist.

Some of Joshua's articles include Pros and Cons of Living in Portugal, 10 Best Places to Live in Ireland and Pros and Cons of Living in Uruguay. Connect with Joshua on LinkedIn.


First Published: Dec 03, 2014

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