This article will look at some of the biggest news stories affecting expats financially, across the world.
The first article is focused on British expats living in the EU, and how recent changes could result in closed UK bank accounts.
We will also look at an article which is American expat-centric, and another two focus on expat jobs in the gulf state of Oman and Singapore.
If you have any questions, or are looking for expat-specialised advice, you can use the WhatsApp function below, or email me (advice@adamfayed.com).
British Banks Close U.K. Accounts of Expats as Brexit Nears _ Bloomberg.
The U.K. bank accounts of thousands of British nationals living in the European Union will be closed by the end of the year as the country nears its exit from the bloc.
Banks including Lloyds Banking Group Plc and Barclays Plchave sent letters to customers saying their accounts will be closed. In the absence of a deal with the EU, British banks will lose their passporting rights to offer banking services across the bloc. The moves were first reported by the Sunday Times.
“Accounts will be shut and debit and credit cards voided,” said Nigel Green, founder of deVere Group, noting without a trade deal it becomes illegal for U.K. banks to serve British customers living in the EU without applying for new banking licences.
Lloyds has contacted its customers in countries including the Netherlands, Germany and Portugal, noting the bank is no longer allowed to offer them services and they should seek alternative arrangements, the Sunday Times reported.
Lloyds has contacted its customers in countries including the Netherlands, Germany and Portugal, noting the bank is no longer allowed to offer them services and they should seek alternative arrangements, the Sunday Times reported.
“We have written to a small number of customers living in affected EU countries to let them know that due to the U.K.’s exit from the EU, regrettably we will no longer be able to provide them with some U.K.-based banking services,” Lloyds said in a statement. A representative at Barclays declined to comment.
Analysis of article
This shows the importance of having portable, expat-friendly, banking and investment solutions.
I have ran out of the number of British, Canadian and American expats that have had their accounts closed down after moving overseas.
These issues have been happening for years, and long before Brexit was in the news.
I would be sceptical about the legal arguments though. Countless financial institutions blame compliance and laws, when in reality it is their processes.
Three or four years ago, countless investment firms told me “their regulations that they needed to abide by” stopped them from accepting digital signatures.
After covid, and despite zero new regulations, many of them changed their processes.
American expats renouncing US citizenship in record numbers – International Investment
A record number of Americans are renouncing their citizenship, with renunciations in the first half of this year soaring to 5,816, more than twice as many as gave up their passport in all of 2019.
Until a decade ago, fewer than 1,000 Americans per year, on average, chose to renounce their citizenship. Now, the country is on track to hit a record-breaking 10,000 people renounce US citizenship in 2020.
According to research by the Enrolled Agents and accountants Bambridge Accountants New York, the figures show a 1,210% increase on the prior six months to December 2019, where only 444 cases were recorded.
Americans must pay a $2,350 government fee to renounce their citizenship, and those based overseas must do so in person at the US Embassy. Most embassies and consulates stopped making renunciation appointments this spring, due to the pandemic.
“There has been a huge turnaround during coronavirus of US expats renouncing, where the figures have been in steep decline since 2017,” Alistair Bambridge, partner at Bambridge Accountants New York, said in a statement.
The huge increase in US expats renouncing from our experience is that the current pandemic has allowed individuals the time to review their ties to the U.S. and decide that the current political climate and annual US tax reporting is just too much to bear.
For US citizens living abroad, they are still required to file US tax returns each year, potentially pay US tax and report all their foreign bank accounts, investments and pensions held outside the US For many Americans this intrusion is too complicated, and they make the serious step of renouncing their citizenship as they do not plan to return to live in the US.
“There has been a silver lining for US expats that they have been able to claim the stimulus check of $1,200, and $500 for each child. For those individuals and families, the proposed second stimulus check will be very welcome once the HEALS Act is approved,” Bambridge added.
In 2010, Congress passed the Foreign Account Tax Compliance Act (FATCA), which requires foreign financial institutions to report assets held abroad by U.S. citizens and green card holders.
The FATCA international tax code was designed to stop Americans stashing money abroad to evade tax. It forces banks worldwide to start revealing, via national tax agencies, information on clients with links to America. And it spawned the Common Reporting Standard, whereby over 100 countries swap data with each other to discourage cross-border tax dodging.
But many Americans living abroad have found it has also caused problems for them as they are being locked out of retail finance in their host countries.. Banks in France have warned that they could be forced to close up to 40,000 accounts belonging to US citizens because of ongoing difficulties with FATCA.
The ‘Accidental Americans” association has been battling for years to be exempt from a US demand that all its citizens overseas file bank details along with yearly tax returns.
The legal challenge follows a move by a US-born British citizen who started a crowdfunding campaign to stop HMRC sharing her personal information with the US Internal Revenue Service (IRS) under FATCA.
There are an estimated 9 million US expats.
Analysis
Ever since the advent of FATCA over 6 years ago, there has been an increasing numbers of Americans who have been renouncing their citizenship.
The main reasons have been the increased costs, complexities and hassles associated with doing financial services overseas.
Bank, brokerage and insurance accounts have been closed down in many cases.
As the article said though, renouncing US citizenship can be costly and time consuming.
This has been an ongoing trend, and one that is only going to get worse, due to ongoing issues in the US.
The only way this situation will improve is if the Trump Administration, or indeed any future US President, decides to act against the trend.
In the last few years, Trump has hinted that he might be prepared to reconsider this Obama-era law.
So far, nothing has came from it, and some other countries have decided to follow the US.
China, South Africa and a few other countries have moved into the direction of citizenship-based taxation and more checks on expats.
Often it has been implemented in a defacto way in these countries.
Nevertheless, with Covid causing more government debts, we can expect an increasing number of countries to attempt to implement wealth and expat taxes.
This makes planning essential. Americans that don’t want to renounce their citizenship, should make sure they are investing in tax-efficient portfolios as expats.
.COVID-19: 200,000 expats lose jobs in Oman – Gulf News
Dubai: More than 222,300 expats working in public, private and family sectors have so far been terminated during this year – 10,700 of whom were working in the government, 181,200 in the private and 30,400 in the family sector, local media reported citing data from the National Centre for Statistics and Information (NCSI).
The total expat workforce has generally dropped by 14.3 per cent in the Sultanate. The government sector witnessed a decline of 19.9 per cent, the private sector a decrease of 14.9 per cent, and 10.4 per cent in the family sector.
The figures released by the NCSI revealed that the majority of terminated workers were Bangladeshis followed by Indians and Pakistanis.
Analysis of article
This is a predictable situation. After every economic downturn, expats tend be some of the first to be let go.
The process of localisation has been happening in many markets for years.
This process can’t happen as easily in expat-majority places like Dubai, but can certainly happen in locations like Saudi Arabia and Oman, at least to a certain extent.
As countries around the region struggle to deal with lower oil prices, and a general downturn in the global economy, more cutbacks will be expected.
This will affect both the expat and local populations.
Singapore juggles global talent vs local jobs under COVID threat – Asia Nikkei
SINGAPORE — Simmering discord over Singapore’s skilled foreign workforce resurfaced this week, as lawmakers gathered to debate policies for the first time following the competitive general election in July.
Prime Minister Lee Hsien Loong on Wednesday stressed in parliament that the city-state remains open to overseas investors, even as his government tightens rules on hiring of non-locals. After immigration emerged as one of the hottest issues in an election that saw the opposition make unprecedented gains, Lee is walking a fine line — attempting to reassure citizens hit by the COVID-19 pandemic without scaring off businesses.
“We may be under stress now, but we cannot afford to turn inwards,” Lee said. “We will adjust our policies to safeguard Singaporean jobs, but let us show confidence that Singaporeans can hold our own in the world.”
The government in August announced that it was raising the minimum monthly salary required for companies to obtain a work permit for foreign professionals, known as an Employment Pass, to 4,500 Singapore dollars ($3,300) from SG$3,900.
The bar was set even higher for expatriates in the finance sector, at a SG$5,000 minimum salary. This is the first time the Manpower Ministry has imposed an elevated benchmark for a specific sector.
The goal is to prompt companies to seriously consider giving jobs to Singaporeans after the coronavirus triggered layoffs. “Many Singaporeans are feeling anxious and pressured about their jobs,” Lee explained. “Their sense that foreigners are competing with them for jobs is palpable. Some feel unfairly treated when they see foreigners replacing them or taking up good jobs ahead of them.”
On Monday, freshly minted Leader of the Opposition Pritam Singh, whose Workers’ Party gained a record 10 spots in the 93-seat parliament in the election, questioned why the government had allowed some companies to fill the majority of their positions with expats. He suggested that the Manpower Ministry publish names of employers that do not abide by rules on international employment and seek clarification on how they intend to ensure fair hiring.
“The government needs to raise its signature in this regard, especially since the issue is such a hot-button one, often generating a lot of heat but very little light,” Singh said.
Opposition parties have frequently challenged Lee’s ruling People’s Action Party — the only party that has governed the country since independence in 1965 — by questioning the PAP’s stance on foreign workers. During this year’s campaign, rumors swirled that the government wanted to increase immigration and raise the population to 10 million, from about 5.7 million.
Since the polls, social media chatter about companies supposedly favoring foreigners over locals has kept the issue alive.
The government’s move to raise the salary threshold, however, has drawn mixed reviews. Victor Mills, chief executive of the Singapore International Chamber of Commerce, told the Nikkei Asian Review that he has doubts.
“I am not sure whether or not these salary increases will be effective in discouraging employers from employing foreign talent,” he said. Mills, whose organization represents some 600 local and foreign companies, added that it would be good to have data on the policy’s effectiveness.
The Singapore Business Federation, which represents over 27,000 companies in the city-state, warned the measures will likely saddle employers with extra expenses. The organization noted that while the policy might lead to the localization of some jobs, sectors facing shortages of suitable Singaporean workers will be stuck paying higher salaries for the foreign staff they need.
“Businesses can build up the local talent pool through training and upskilling, while retaining foreign manpower to complement these locals,” Ho Meng Kit, the federation’s chief executive, suggested as an alternative.
The federation called for Singapore to remain open and connected to the world, rather than shutting its doors to global talent that brings value. “An overly restrictive policy on foreign manpower will impact trade and investments, which will in turn dampen growth of the economy and job opportunities for Singaporeans,” it said in a statement.
Lee took pains to acknowledge this in his speech on Wednesday.
The city-state’s openness to global talent, he argued, has contributed to its success as an international hub and created more opportunities for its own people. Without giving specifics, the prime minister also hinted that new foreign investments are on the way, covering fields like vaccine production and pandemic risk insurance.
“Even as we adjust our work pass policies, we must be careful not to give the wrong impression that we are now closing up and no longer welcoming foreigners,” Lee said. “Such a reputation will do us great harm, and we have to watch this, because we are being watched.”
Analysis of article
I was in South East Asia in 2014, when countless countries, including Singapore and Indonesia, tightened up expat visa rules.
This process has been continuing ever since, and covid could result in renewed economic protectionism and nationalism.
Singapore, just like London and New York, might realise that they need global talent at the higher end.
However, those at the lower, middle and even upper-middle end, might suffer from these kinds of policies.
