CATEGORY
ARCHIVES: FINANCIAL AND LEGAL
Financial and Legal
(financial planning for expats at Barcelona, life insurance, banking, etc)
Best for Expatriates in
Spain
As an expat, your
circumstances are likely to change more often than if you were in your home
country. Clear financial advice and planning means that expatriate life is
without worry and that your future is taken care of.
Financial planning
requirements vary from country to country and expatriates living in Spain may
need to allocate their investments in a different way. These are the elements
that make expatriate financial planning different.
Currency
One of the first
financial steps when relocating abroad may involve exchanging currency to that
of the new country. It is important to search around for the best deal at both
banks and specialist currency dealers.
If an income is received
from another country in another currency, it will need to be exchanged into the
currency of new country. The impact of a regular currency conversion can leave
a person exposed. Currencies move quickly and often; it may be necessary to
“forward book” some of the currency exchanging to fix the rate of exchange.
When it comes to
arranging savings and investments, different currencies also need to be taken
into consideration. In principle, if the investments are generating income used
to live on, they should be in the same currency as the expenditure.
Emergency
Cash Fund
Regardless of the
country of residence, an amount of cash should be instantly available for
emergencies. In the case of expatriates, this fund needs to be higher because
inevitably additional trips back home are required (for example, trips to see
ailing and infirm relatives). The amount required depends on individual
circumstances and a financial adviser takes this into account when financial
planning.
Bank
Accounts
Expatriates need a bank
account in more than one country; a local bank account is required in the local
currency. It is also often necessary to retain a bank account for residual
issues in the home country.
Choosing
a bank
Some banks are available
in Spain and other countries (for example Santander and HSBC) which could make
it the preferred choice; a bank might be chosen because it has a conveniently
located branch and cash-machine. Banking regulation differs between countries
which require extra vigilance (the Spanish Cajas and the German Landesbanks may
be examples of this in the future).
Tax
Planning
With double taxation
agreements between, for example, the UK and Spain, it must be determined in
which country tax is paid. This involves definitions of “residence” and
“domicile”. In a home country these are likely to be the same but after
relocating, they may be different. Inheritance tax is different and it is easy
to be caught in two tax regimes.
Retirement
Planning
A recent survey found
that the highest concern for expatriates is to ensure that they have enough
funds for retirement. If retiring in a new country there are many factors to
take into account such as what to do with a pension from another.
Health
Care
Many British expatriates
state that the health care in Spain is as good as the UK. However, despite this
many of them return to the UK in later years due to health problems. It is
worthwhile to look into the Spanish state health care; additional health care
cover may be required.
International
Schooling
If children are involved
in a family move to a new country, schooling is a concern. Many countries have
a requirement to pay towards education costs. School fees might be required to
educate children at an international school. There is also the option of
boarding school (this is an expensive option).
