28 Common Expat Mistakes You Should Avoid
If you are looking to invest as an expat or high-net-worth individual, which is what I specialize in, you can email me (advice@adamfayed.com) or WhatsApp (+44-7393-450-837).
Introduction
There is a long list of common expat mistakes, ranging from over-packing to avoiding difficult bureaucracy to not filing tax disclosures.
Many of us dream of making the life-changing decision to move abroad, but due to some common expat mistakes that many make when moving to their new country, that dream can equally easily turn into a nightmare.
Moving abroad opens up a whole new world of adventures, but it also brings a whole new world of rules and regulations especially when it comes to your tax obligations. You risk thousands of dollars in fines and, in some cases, jail time if you break these rules.
Here is our guide on how to avoid common expat mistakes when moving abroad so you can start living your dream life without making any mistakes right away.
28 Common Expat Mistakes
1. Not doing diligent research
One of the common expat mistakes worldwide is a lack of sufficient research. Prior to relocating, it is imperative that you do extensive research on the nation you have chosen.
You can easily prepare yourself before traveling with the wealth of information on culture and customs that the internet has to offer today.
If we want to blend in with the locals, we must respect their culture and customs because this is their country and they frequently follow laws and traditions that are different from our own.
It’s also crucial to research the transportation, employment, education, and healthcare options available in your intended location. To get a sense of the place before committing to a move, it is recommended that you travel there if at all possible.
2. Not learning the local language
Having a basic command of the local tongue is essential for everything from making friends to comprehending your job or rental agreement. Get ready before you move by pulling out your high school texts or finding an audiobook course.
3. Not even making an effort to speak the local language
Learning is frequently the easiest part; the challenge is developing the confidence to communicate when you are there.
The sooner you overcome your embarrassment of engaging in conversations full of errors, the better. We’ve all committed the embarrassing language faux pas, so there’s nothing to be ashamed of.
4. Not making enough prior trips to the destination
It is very simple to fall in love with a vacation spot after spending two weeks there. But a single trip can be viewed through rose-tinted glasses because visiting a country for a vacation is very different from living and working there.
To get a good sense of what it is like to live there, it is advised to visit the country several times and stay away from tourist hotspots if you are thinking about moving there.
It can be helpful to seek advice from other expats who live there about local traditions and laws that you should be aware of.
5. Excessive spending during the first few weeks
It’s exciting to relocate to a new country, and many people want to immediately adopt their new way of life.
It can be tempting to try out new attractions when we first get there and act like we’re on vacation by dining out and making extravagant purchases.
It is always advisable to stick to your budget as closely as you can and to spend responsibly because you might require additional funds in the initial months to cover costs such as legal fees, rent, visas, and permits.
6. Not having backup plans
All the best-laid plans may not work out for a variety of reasons, so having a backup strategy is crucial. In order to do this, you might need to find a new place to live, have more money available in a separate account, or be able to return home in an emergency.
Don’t invest all of your money when starting a new company abroad; if it fails, you could end up with nothing, and in the worst case, expats might end up homeless and unable to leave their new country. Don’t put your entire basket of eggs in one basket, as the saying goes.
7. Moving to new country to run away
When you’re trying to leave problems you may have had in the UK in the past, that’s one of the worst reasons to move abroad. Running away may seem like the quick fix to all your issues, but this is not always the case.
The issues might follow you wherever you go, and dealing with them abroad will be more difficult than dealing with them at home where everything is familiar.
Problems with money or the law won’t go away; they’ll just wait for you when you get back. If you really want to relocate abroad, it is important to resolve all issues at home before you do so because you will experience less stress and anxiety once you make the move.
8. Moving to a new country as a result of hasty decision
No matter how eager you are to get there, it is never a good idea to move quickly to a new country.
Moving to a new country is a major life decision that requires careful consideration. Before making a decision, seek advice from family and friends and do extensive research on the area.
It is preferable to make a well-thought-out move than to rush into something and end up unhappy and unprepared in a foreign country.
9. Not being fully prepared for the move
It is crucial that you reevaluate your situation and take your time with your intended move if you are starting to have second thoughts about moving abroad.
Put off moving until you are completely at ease. It might also be a good idea to return to the destination to get a better sense of the way of life there.
If you’re truly committed to moving, there’s no need to rush; the country will still be there when you’re ready, and you’ll find it easier to adapt to your new surroundings once you’re completely at ease with the move.
10. Over-packing
Your new house will have stores unless you’re moving out in the middle of the desert. While it may be tempting to bring five bottles of your favorite shampoo, six months’ worth of underwear, and coat hangers, finding local alternatives to your regular products is an important step in establishing yourself in a new country.
11. Acting like a tourist rather than a resident
Long-term travel is just one aspect of living abroad.
Find and frequent a neighborhood bar, get to know the shopkeepers, learn where to buy your favorite foods, and so on. In essence, you should feel comfortable rather than like you are barely getting by.
12. Believing that you won’t change
It’s possible that you start to support a different political viewpoint or that you find yourself at odds with your longtime friend from back home.
When you relocate abroad, you come into contact with people whose upbringing differs from your own, encounter new political and economic circumstances, and learn values you had no idea existed.
You might notice that your opinions are shifting and that you’re drifting away from your old friends. It’s good that you are developing and learning.
13. Stereotyping the people and culture
The propensity to develop a “us” and “them” mentality is another reason why you shouldn’t only make friends with expats.
It might begin as a joke, but if you keep reducing the local culture to quirks and stereotypes, you’ll discover that all you’ve done is make yourself an outsider. Explore the culture in depth to learn about the aspects that visitors and passing travelers miss.
14. Not realizing that reverse culture shock exists
It’s unsettling to suddenly feel out of place in either your home country or another one. But after a while, you come to understand that it’s not really a bad thing. In any case, it elevates you to the position of most intriguing party guest.
15. Limiting the social scene to other expats
When they first relocate abroad, this is a common issue for many expats, particularly in regions of Spain and France where there is a sizable expat population.
If you limit your social circle to only expats, it can be challenging to integrate into the neighborhood and even lead to a sense of loneliness. Become active in the community and try to learn the language if it is different from your own, even if it is just a few basic phrases to get by.
16. Not making friends with the locals
Initially, you might feel as though you have to use the present tense only, which makes your conversations in the native tongue seem embarrassingly simplified.
However, keep going. Even though you’ll be completely lost in conversations, accept invitations from locals. Simply buy a lot of drinks and prepare meals for people to demonstrate your friendliness.
17. Not making friends with other expats
Your home friends may not always understand your frequent rants about how things are in your new country—they don’t know how to queue, timetables are just guidelines, and their administrative systems seem stuck in the 1960s.
Find another (not too bitter) expat to whine with, and then remind each other that your life is actually pretty wonderful.
18. Disregarding your native tongue
Write, read well-known works of literature, and watch sober TV. If you don’t, you’ll notice that your English gradually becomes cleaner and less replete with poetic or colloquial expressions.
19. Getting overwhelmed with too much bureaucracy
Legalese and mountains of paperwork in a foreign language can be overwhelming because it’s difficult enough to communicate in your own language.
However, this shouldn’t prevent you from performing necessary administrative tasks when you first arrive, such as confirming that you are duly registered as a resident or that you have a local physician. Ask for guidance on the procedure from foreigners who have already moved there or from online forums.
20. Not filing tax disclosures
One of the most common expat mistakes is failing to file their tax returns after relocating to a new nation, which can lead to an annual increase in tax return obligations.
However, if you file a tax return in the US, the foreign earned income exclusion rules may allow you to deduct some of the income you earned abroad.
In addition, if your total account balance in foreign bank accounts ever exceeds $10,000, Americans living abroad must file a Report of Foreign Bank and Financial Accounts (FBAR) with the Treasury Department. There could be fines of more than $100,000 for failing to do so.
21. Not taking double taxation into account
For expatriates, taxes can be a real headache. Expats must make sure they are paying the correct amount of taxes to their home country after learning the new tax laws in their new home.
In order to offset some of the taxes they have already paid abroad, Americans living abroad may claim a tax credit on their American tax return. These tax credits, however, can only be utilized if both countries’ taxes are of the same type.
You would pay $5,000 to Singapore and an additional $5,000 to the US if, for instance, your Singaporean income tax was $5,000 and your US income tax was $10,000. But only nations with which the US has tax treaties and when their tax systems are comparable are subject to this offsetting tax.
22. Ignoring the need to study inheritance laws
Particularly for those residing in the Middle East, it is imperative that you ascertain the inheritance laws of your host nation as soon as possible. Sharia Law is the dominant legal system in many Middle Eastern nations, frequently superseding the provisions of a will.
The majority of couples decide to leave their inheritance to their spouse, but Sharia Law states that it must go to the nearest living male relative.
If you find yourself in a situation where Sharia law is in effect, there are a number of ways to protect your assets by keeping them outside of your home country, such as opening offshore bank accounts.
The possibility of double taxation on inheritance is a problem that expats encounter more frequently.
In addition to any US inheritance taxes, many host nations will charge the benefactor an inheritance tax. However, American tax law frequently permits deductions for death taxes levied by the host nation.
23. Failing to open an offshore bank account
An offshore bank account is a solution worth considering for expats dealing with unfavorable tax laws, unusual inheritance laws, or a volatile currency.
Offshore bank accounts are a great way to protect your savings while minimizing taxes paid on bringing large sums of money into a country.
Don’t forget to send your FBAR report to the U.S. Treasury Department if you decide to open an offshore bank account and your total account balances exceed $10,000.
24. Budgeting insufficiently
One of the common expat mistakes is not bringing enough money. It’s common to underestimate your financial requirements when organizing a significant move abroad.
Even if you have done extensive research on the cost of living in the country you have chosen, it is still important to account for changes in the price of rent, food, and travel that may have occurred since you conducted your research.
Be sure to factor in the cost of moving as well as any one-time expenses you may incur upon arrival, such as those for legal counsel, taxes, visas, and permits, all of which can severely dent your carefully constructed budget.
It’s best to always plan on spending more money than you have planned on because it will give you peace of mind.
25. Not getting a health insurance
Even if your health is excellent, failing to obtain adequate international health insurance when moving abroad is frequently one of the common expat mistakes you can make and can end up costing you thousands of pounds.
The NHS is the best healthcare system in the world, despite the complaints of many of us. No other nation has one that can compare.
For those who lack insurance, medical care in almost every foreign nation can cost hundreds or even thousands of pounds, and some even forbid receiving care if one does not have medical insurance.
It is imperative that you, your family, and adequate health insurance to cover you in the event of an emergency because the risk is not worth it.
Numerous expat businesses offer guidance on the various types of insurance that are available; while it may initially seem pricey, doing so could ultimately result in thousands of dollars in savings.
A healthcare plan that satisfies the minimum essential coverage (MEC) for that 12-month period is required in order to be in compliance with the Affordable Care Act (ACA), which applies to anyone who spends more than 30 days in the United States in a calendar year. There will be a tax penalty for those who don’t comply with the ACA.
Read about how international insurance for expats works and international health insurance cost.
26. Not being familiar with the healthcare system
Likewise, it’s important to understand your position regarding healthcare. Make sure you are fully registered in the system, are aware of any fees that may apply, and are aware of your legal obligations as a foreigner.
You should also be aware of how to access any medications or regular treatments that you may require.
27. Allowing employers to exploit you
Even when your language skills are poor, you need a job right away. Do not interpret this as an admission that you accept low pay or lack financial literacy. Obtain a written copy of everything so you can translate it later.
28. Excessive reliance on a local partner
It’s extremely tempting to use them as a crutch to deal with the overwhelming bureaucracy and, well, anything remotely complicated in their language. It’s alright, to a point.
Your brain might simply shut down whenever someone brings up taxes or national contributions. Accept that you’ll always require assistance there. However, you should make as many independent decisions as you can to take charge of your situation while traveling.
Pained by financial indecision? Want to invest with Adam?
Adam is an internationally recognised author on financial matters, with over 760.2 million answer views on Quora.com, a widely sold book on Amazon, and a contributor on Forbes.
