May 02, 2014
As the economy becomes more global in nature, Americans are increasingly considering opportunities to live and work overseas. The U.S. Department of State estimated in 2011 that 6.3 million U.S. citizens study or work abroad, the highest number ever recorded.
While planning to relocate abroad can be exciting, it’s critical to think strategically about your time overseas before your plane takes off. Keep in mind these four steps to help lay the groundwork to support a successful time abroad.
1. Open a Local Bank Account
For starters, you’ll need local sources of liquidity. “You need to ensure you have quick access to funds locally,” says John De Clue, Chief Investment Officer for The Private Client Reserve of U.S. Bank, who has spent eight years of his career living abroad.
That means your first step may be opening a local bank account in the new country, because banks in the U.S. may put daily limits on how much money can be withdrawn from an ATM. Limits on cash withdrawals typically range from $500 to $1,000, but can often be raised with a client request.
In most countries, opening an account is as easy as walking into a local bank. But in other countries, the task may be more difficult. Some foreign banks may be reluctant to open accounts for U.S. citizens since the 2010 enactment of a U.S. law called the Foreign Account Tax Compliance Act (FATCA), which was created to crack down on offshore tax evasion and money laundering. The law requires foreign banks to register with the Internal Revenue Service and report certain information about their U.S. account holders