Financial Planning Tips For Residents Of Multiple Countries

A glance at the modern trend would reveal that financial planning is rapidly becoming as widespread as any other regular commodity. However, financial planning comes with some mild underlying complexities ranging from factors including return expectations, inflation rate, and life expectancy, among others.

For someone who falls into the category of non-resident Indian, this concept appears to be more complex giving a substantial increase in these variables. In addition to the financial aspects that ought to be considered, other softer aspects also need special attention. Some of these include:

Goals Across Different Countries

There are people who have had cause to work in India for a while and who have also had cause to work overseas. For those who are entrepreneurs or those who took up consultancy roles, they strive to conveniently straddle India as well as their present homes in a bid to make the best out of both worlds when it comes to the work front.

What should be considered in this instance is how they divide their time between both countries, the divergent inflation rates and also the effects of currency depreciation.

There are multiple factors to consider when planning your financials as a non-resident Indian, and that includes a consideration of the effects of currency depreciation

Other aspects of concern include:

1. What do they do with the property they live in, I.e. Will it be possible for them to get a paying tenant whenever the place is vacant?
2. When in India, where do they stay and would they feel emotionally connected with home?
3. Will it be easy for them to get used to life in India particularly when they’ve been abroad for so long.
4. Will it be possible for them to have an accurate prediction of the expenses they are likely to incur in maintaining their lifestyle? There are instances where people underestimate or overestimate the expenses in India, and it’s thus necessary to have an accurate prediction.

Assets Factor

As an absentee landlord, the first point of concern is a need to have workable property management services. Usually, there is a strong desire to have in place local financial advisors who are competent in the countries where the assets are held. It is also advisable to have local tax consultants to avoid falling victim of tax consultants who does not understand cross-border issues.

Inheritance Concerns

The importance of planning for transfer as well as the receipt of inheritance cannot be overemphasized. A considerable understanding of how to go about the reduction of the effects of the so-called “death-taxes” while they are alive and also setting up relevant structures that would substantially reduce the cut of the government in the estate.

A good suggestion is having wills locally registered in each country where you have assets and inserting a cross-reference in each of the wills. Executing each of the wills will be much easier when compared with the stress of executing a single master Will.

Register individual Wills locally in places where you have assets rather than using just one Will

Taxation Issues

To begin with, confirm if there is a Double Tax Avoidance Agreement in existence between India and that country of residence. This makes it possible for you to claim tax credits for the taxes paid in that other country when you file your tax returns. Ultimately, it improves your liquidity as you don’t have to pay excess taxes in the two countries.

Some tax reliefs help an individual enjoy the benefits of tax credits

Indian residents get to invest and save on capital gains tax in the country. However, NRIs that are resident in the UK do not get to enjoy this benefit because the credit available there are for taxes paid, not taxes saved.

Insurance Policies

A prominent aim of financial planning is aiding the protection of individual risks. Ensuring that one has strong health insurance covers that can easily settle local claims is very important when one has to shuffle between different countries. This isn’t important only when one is still actively working, and it is also important for retirement. One should also analyze life insurance based on the areas of coverage such as amounts and maximum age.

Portfolio Building

A full scan of all investment products one can possibly get in each country requires conducting multiple advisors. That way, one can enjoy the benefit of the local expertise of each of them. At every given point, the focus should be on financial goals and if possible, local goals should be locally met to guide against any problem that can likely be caused by currency fluctuation.