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negotiating expat package hong kong

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If you are the one paying the taxes yourself to the foreign government, you are eligible to use the Foreign Tax Credit to help offset your US tax liability. You could end up paying taxes on your salary to both countries. Of course you should also consider the other standard benefits you will get with your employment package such as annual leave, which may differ from home, and international health insurance to ensure your healthcare needs are met. Most packages usually cover the cost for a flight home once a year, although you may be able to negotiate for more depending on your personal circumstances. Pay variation also. In most cases expat packages total around 35% more than the package you’d receive for the same role back in the US. This variation in expatriate pay is partly due to location - for example expats in San Francisco tend to be paid higher than expats working in similar jobs in Paris. This, along with the ever-present wealth of the Arab Emirates, means that a large portion of Western expats continue to flock eastwards. Guidance on Expat Compensation and Relo packages (Hong Kong) ... 124 I am currently negotiating an executive leadership position with a well-established Chinese-owned and managed company. It's important to check that your housing allowance is sufficient to cover the cost of accommodation in your new country, as it may be considerably more expensive than what you're used to back home. Moving Costs – will they be reimbursed? To qualify for this, however, you must pass one of two residency tests: the Physical Presence test or the Bona Fide Residence test. It's also worth noting that in some parts of the world it is better to hire a driver instead of driving yourself, so you may need to factor this into your allowance budget. Our comprehensive guide on expatriate package explains various segments of an expatriate package. The types of expenses you can deduct include: When you are negotiating your contract, ensure that your reimbursement or salary is sufficient to cover your housing costs, while keeping in mind that you may be able to offset some of them with the Foreign Housing Exclusion. They can include accommodations, car and driver, maid service, education for your children, flights to and from the country you’re in back home, hardship allowance and healthcare among other niceties. If you have been working for a corporation for a number of years already, you should ensure that your contract notes the fact that the assignment abroad does not constitute a break in employment. Expats in Hong Kong earn more than their counterparts in Singapore, but the latter is still seen as a more desirable destination to live and work. Remember that if you are planning to purchase a car, your allowance should be sufficient to cover fuel costs and insurance. I am in the process of negotiating a move to with one of the big banks from the UK to Hong Kong. Expat relocation package involves understanding your needs and how they can be negotiated in an enforceable binding agreement in your host country. Subscribe to our monthly newsletter to get money-saving tips, latest expat tax news and exclusive promos straight to your inbox. One of the most overlooked aspects of the overseas contract relates to US expat taxes. However, if your company offers to give you a one-time bonus to cover your relocation expenses, the IRS will view that as income and you will not only be taxed on it, it won’t be deductible the same way a direct reimbursement for moving expenses would be. Blog This field is for validation purposes and should be left unchanged. Hong Kong's Richest. There are more than 50 million expats around the world and this number continues to rise. Moving employees abroad requires extensive knowledge and experience in international personnel benefits. These factors contribute to the experience of a better quality of life in Hong Kong for expat managers. So it may appear that you have a higher salary, and in turn may actually increase your US expat tax liability, which means you take home less money than you expect. In some cases your employer may also provide accommodation for you, at least on a temporary basis when you arrive, to give you time to find somewhere to settle. These days, the corporate world has no boundaries! Malaysia's Richest. The cost of an expatriate package has fallen in Singapore by six per cent in USD terms over the past five years. One more thing to note: if your employer pays these costs, the IRS could view these as additional income to you, so it may be ‘safer’ to pay them yourselves and use applicable deductions and credits to reduce US tax liability. I was recently offered a position working at a University in HK. The overall expat pay package in Hong Kong has risen by a total of USD 7 902 since last year, with increases to salaries and benefits making up the vast majority of the increase. Moving to developing countries, such as some parts of, Of course you should also consider the other standard benefits you will get with your employment package such as annual leave, which may differ from home, and, How to Negotiate for a Better Expat Package, You can find out more by connecting with other expats online through blogs, forums, and social media communities, including these two groups on LinkedIn -. When negotiating an expat package, take the time to mull over what is most important to you and choose those things to negotiate for. This can often come as a lump sum to enable you take care of any out-of-pocket expenses. Will your employer be paying for your housing directly? Most packages usually cover the cost for a flight home once a year, although you may be able to negotiate for more depending on your personal circumstances. However, the key to having a successful expat career is bargaining for the right employment package. However, in the last two years, things have undergone a rather drastic change in this country, which is evident in the fact that the expat pay package has … A typical expat package will often include travel costs for you and your family to visit loved ones back home. Housing allowance is also a common feature of an expatriate package and may include costs for basic utility services and domestic help. You can find out more by connecting with other expats online through blogs, forums, and social media communities, including these two groups on LinkedIn - Expat Network and Expatriates and Global Mobility. Like the Foreign Tax Credit and Foreign Housing Exclusion, the Foreign Earned Income Exclusion was created to help offset US tax liability for those living abroad. Our expert accountants are available for consultations! This is an important question that many employees neglect to ask. The survey questions expats living in countries around the world and gives an accurate report that potential expatriates can use to understand how their financial situation might change, for better or worse. Research Before Negotiating Expat Relocation Package. Hong Kong is an expat hotspot for the financial sector, but for overall lifestyle it has a middle of the range performance, having ranked 20 th out of 46 nations in 2017, according to HSBC’s Expat Explorer Survey. Before you take up an expat employment offer, make sure you understand what life will be like abroad and the day to day costs for you and your family so you know what your negotiation 'red lines' are. Singapore is ninth in the Asia Pacific regional rankings this year. This variation in expatriate pay is partly due to location - for example expats in San Francisco tend to be paid higher than expats working in similar jobs in Paris. With its former links to the UK, pop culture influences from the US, and thriving expat population, Hong Kong is a truly international, welcoming region. A typical Expat Package should fully compensate an expat for his or her decision to work abroad, and will vary depending on your industry, role and level or responsibility. For example, in Hong Kong you can exclude $114,300 in housing costs whereas in Rio de Janeiro you can only deduct $35,100. Typical offers include an air-freight and sea-freight allowance, both for shipping to Hong Kong and then back to one's home country upon the contract's completion. FATCA (Foreign Account Tax Compliance Act), Rental of Furniture and Accessories (not purchased furniture). Do your research and see what is the standard package for your industry or company, and consider factors such as the the cost of living and relative hardship of the post. One of the most important issues for any expatriate is the assignment contract, especially if it is a first time relocation. This week we’re speaking with a woman who was facing an overseas move and needed to negotiate her expatriate package. “In Shanghai, there’s plenty of decent housing,” he says. However, the key to having a successful expat career is bargaining for the right employment package. However, areas where you can live near other expats and international schools are limited and in high demand, he says. International moves are not cheap. It’s vital to have a plan for asset management Hong Kong in place if you are intending to move to the city. Access up-to-date articles, breaking news, deadline information and in-depth case studies on US expat taxes. Fast forward to the present day, and the number of these contracts on offer is dwindling. I hold a master's degree from HKU, and have worked in the area of student/workforce development in NYC (my home) for sometime now, therefore I am both experienced and qualified. Years ago, when many western multinationals were establishing their footprint in Asia, the expat package was a fairly standard expectation for senior communications executives relocating to the region. Have you ever heard of a Totalization Agreement? It is worth speaking to other expats via online forums to get a realistic view of housing costs, including how different neighbourhoods will impact your housing allowance (for example prime locations with access to the best schools and transport networks will likely be more expensive). Organisations looking to e News : update for the Cost of Living 09/2020 > 252 cities – 126 countries Most expats understand the differences in cost of living expenses when they move to a new country. Relocation expenses typically cover costs for flights (including family if applicable), international removals, temporary accommodation, and visa and work permits. Typically your employer may also provide a local agent to assist with the relocation, including helping you to find housing options and set up your finances. Provides our globally mobile members with peace of mind that they can access the best care both at home and overseas. Basically, this agreement helps ensure that you aren’t forced into paying into two systems when clearly you will only retire under one! We suggest you keep a close watch on your US travel days to ensure you don’t forfeit your ability to use this valuable Exclusion. Get access to special offers and resources from other expat services that will make your life even easier living abroad. If your … With the right package in place, you may find that your years abroad become some of the most most delightful and memorable of your working life. Housing will likely be your biggest overseas cost, so it is important to pay special attention to how you will be compensated! If your company is going to pay for your expenses, how is that handled? However, that does not mean that moving to Hong Kong is hard. The benefits of moving to Hong Kong include basic healthcare provided by the government, fairly low taxes, and high-quality education. One of the most important issues for any person or family that is sent abroad by their company is the expat relocation package. We just encourage you to look closely at your contract from an expat tax perspective to make sure you completely understand the tax impact of your expat package. International moves are not cheap. 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