Integrity Legal

Posts Tagged ‘expat’

31st August 2013

General “Stonewall” Jackson once said that his tactical and strategic imperative was to keep his opponents between the “horns of a dilemma”.  Expatriates living in the Kingdom of Thailand often find themselves caught between the horns of a dilemma when it comes to the issue of exchange rates. As a long time expatriate and small business owner in Thailand, this blogger often finds that the fluctuating value of the Thai baht when compared to other currencies can be both frustrating and (in some cases) exhilarating. When the Thai baht is weak against other currencies it generally means that the Thai economy is stronger because exports increase (as Thai products are viewed as less expensive) and tourism flourishes. The net result of increased exports and increases in the number of tourists means more money comes into Thailand and the economy improves.

On the other hand, when the Baht is strong it means that an expatriate earning money in Thailand has higher purchasing power in either their home country or other countries that they visit. In many cases, expatriates travel more than the average citizen of their home country, so currency fluctuations affect expatriates disproportionately when compared to those who primarily reside in one place for most of their lives.

The examples cited above are rather simplistic and definitely do not pertain to issues involving international currency markets, stock exchanges, and financial institutions; but they highlight an underlying day-to-day dichotomy that can be paradoxical for the average expatriate. Is it good to have a comparably strong or weak local currency? Following the economic crash in 1997, many expatriates in Thailand, especially those with significant foreign capital, were able to make investments into the economy that may not have been possible prior to the extreme devaluation of the Thai baht. This was definitely a positive development for the limited number of expats able to make such investments. Furthermore, it could also be viewed as something of a “silver lining” for the Thai economy. That being stated, the overall economic trauma caused by the 1997 crash was a burden on Thais as well as foreign expatriates as the Thai economy was stunted for some time in the aftermath. Meanwhile, it took many years for Thailand to once again be viewed as solid jurisdiction for large foreign investment.

Presently, there are those who speculate that Thailand may be standing on the precipice of another economic downturn. There are those who believe that the Baht will lose value (at least against the dollar) in the coming months and some who argue that previously implemented economic policies will lead to full-scale recession. At one time, expatriates were virtually immune from local economic downturns, now as the world has become more globally integrated such immunity may not prove so strong should an economic collapse occur again. Also with the ASEAN Economic Community quickly moving toward realization economic issues in one country could lead to problems across the region.

There is no unequivocal answer to the expatriate’s dilemma, but for expatriates in Thailand it might not be a bad idea to keep a close eye on those exchange rates.

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17th August 2010

United States Citizenship is the highest lawful status that one can reach in the USA, from an Immigration perspective. Many people from around the world seek visas, travel documents, and permanent residence in the United States. Of the relative few who obtain lawful status in the United States, even fewer ultimately naturalize to US Citizenship. American Citizenship accords the Citizen with voting rights, work authorization, and virtually unfettered travel rights within the United States of America. That said, there are some situations where an American Citizen seeks to renounce their United States Citizenship. In a recent article from the New York Times it was noted that citizenship renunciation seems to be on the rise. To quote the article directly:

Amid mounting frustration over taxation and banking problems, small but growing numbers of overseas Americans are taking the weighty step of renouncing their citizenship.

“What we have seen is a substantial change in mentality among the overseas community in the past two years,” said Jackie Bugnion, director of American Citizens Abroad, an advocacy group based in Geneva. “Before, no one would dare mention to other Americans that they were even thinking of renouncing their U.S. nationality. Now, it is an openly discussed issue.”

The Federal Register, the government publication that records such decisions, shows that 502 expatriates gave up their U.S. citizenship or permanent residency status in the last quarter of 2009. That is a tiny portion of the 5.2 million Americans estimated by the State Department to be living abroad.

There are a significant number of American expatriates living throughout the world and it should be noted that not all of these individuals wish to renounce their US Citizenship. However the New York Times went on to point out:

Still, 502 was the largest quarterly figure in years, more than twice the total for all of 2008, and it looms larger, given how agonizing the decision can be. There were 235 renunciations in 2008 and 743 last year. Waiting periods to meet with consular officers to formalize renunciations have grown.

Anecdotally, frustrations over tax and banking questions, not political considerations, appear to be the main drivers of the surge. Expat advocates say that as it becomes more difficult for Americans to live and work abroad, it will become harder for American companies to compete.

Increasingly, international banks and financial institutions are finding it difficult to deal with some American financial regulations. That said, most American expatriates (or expats) seem to be more frustrated by American tax policy rather than American financial restrictions. The New York Times went on to note:

American expats have long complained that the United States is the only industrialized country to tax citizens on income earned abroad, even when they are taxed in their country of residence, though they are allowed to exclude their first $91,400 in foreign-earned income.

One Swiss-based business executive, who spoke on the condition of anonymity because of sensitive family issues, said she weighed the decision for 10 years. She had lived abroad for years but had pleasant memories of service in the U.S. Marine Corps.

Yet the notion of double taxation — and of future tax obligations for her children, who will receive few U.S. services — finally pushed her to renounce, she said.

“I loved my time in the Marines, and the U.S. is still a great country,” she said. “But having lived here 20 years and having to pay and file while seeing other countries’ nationals not having to do that, I just think it’s grossly unfair.”

“It’s taxation without representation,” she added.

Stringent new banking regulations — aimed both at curbing tax evasion and, under the Patriot Act, preventing money from flowing to terrorist groups — have inadvertently made it harder for some expats to keep bank accounts in the United States and in some cases abroad.

Some U.S.-based banks have closed expats’ accounts because of difficulty in certifying that the holders still maintain U.S. addresses, as required by a Patriot Act provision.

Even though tax considerations, for both individuals in the present and for those in the future, may be enough for some to renounce their United States Citizenship it would seem that many Americans feel as if renunciation of United States Citizenship is a very drastic measure that should not be taken lightly. Those thinking about giving up their US Citizenship are well advised to seek competent counsel from a US Immigration attorney in order to ascertain all of the relevant ramifications of such a significant decision. Those thinking of renouncing their United States Lawful Permanent Residence (LPR) might also find it useful to seek the advice of a competent attorney who can explain the legal issues that arise as a result of giving up American LPR status.

For related information please see: I-407 or naturalization.

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