Until recently, expat living used to be something exotic primarily for diplomats and high-level executives. Now travel, technology, and easier visa requirements made it much more accessible.
The expat experience can help you develop your sense of self, increase your independence and resourcefulness, and allow you to gain a new understanding of the world. You can not only gain invaluable life skills and experiences but also gain a deeply rewarding and refreshing outlook on life.
However, as more and more people live a digital nomad life, travelling from country to country, many challenges remain in addition to the benefits of the expat lifestyle. In this article, we will be looking at five common challenges you will encounter as an expat.
1. Mastering a new language
English gets you quite far these days. However, if you plan to stay in a country for a longer period of time, it makes sense to invest effort in mastering the local language to adjust better and be able to integrate with the locals in social settings. This might be a big feat; however, it will eventually pay off in feeling more at home and at ease in situations where English is not commonly spoken.
2. Finding new friends
The upside of mastering the local language will lead to an easier way of connecting to people and help you find new friends and combat other problems of mental nature many expats are dealing with such as loneliness or culture shock.
Also, many social media platforms help to get to know other people with shared interests such as Eventbrite and Meetup. If you’re relocating with children, you will have the additional challenge of finding the best international school for them.
3. Getting health insurance
One of the most important points when living as an expat is making sure you have adequate health insurance in place, which allows you not only to be treated in an emergency situation free of charge, but also enables you to use the national health system as a local expat citizen.
Some countries require employment or registering as self-employed locally to gain access to the system, while in other countries the system is free of any pre-requirements such as the NHS (accessible for every person legally residing in the UK).
So once you arrive in a new country, make sure you quickly register for the required health insurance — this is especially important when you relocate to a country where the public healthcare system is known for being riddled with many exceptions, such as the US.
4. Understanding tax affairs
One of the biggest difficulties expats experience is understanding how their tax and money matters are affected. If you’re moving abroad with a UK income, we previously covered your need-to-knows in this article.
Nobody really likes doing their tax return. However, for expats there is an additional challenge to respecting the local and global tax rules. If you travel frequently, it is very important to understand what your actual tax residency is and how you deal with tax matters.
Normally, the country where your primary residence is and where you spend more than half your year living is also your tax residency. However, there might be more complicated cases, especially for a high-earner or person with offshore income or a citizen of certain countries which tax income globally, such as the United States.
Insofar, it makes sense to get tax matters in order and invest in a good tax adviser who knows how to deal with expat affairs.
5. Making money transfers
Living in a different country means that normally you wouldn’t be giving up on all infrastructure, especially financial infrastructure, you’ve built in your home country or country of previous residence.
However, additional bank accounts, brokerage accounts, life insurance and pension plans can be difficult to manage if you deal with multiple countries.
Consequently, it makes sense to make a list of all of your financial matters and accounts and only keep the ones you really need. Also, updating your tax residency on all financial accounts is important — otherwise, income may be reported by the bank or broker to the wrong country under CRS rules and could lead to problems with your tax matters.
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Gustav Christopher is a writer specialising in finance, tech, and sustainability. Over 15 years, he worked in banking, trading and as a FinTech entrepreneur. In addition, he enjoys playing chess, running, and tennis.