Preparing for an International Relocation

Prepping for international relocation isn’t as simple as packing up your stuff and hiring a cross-country moving company. There are many more details you need to wrap your head around, from figuring out the local slang to navigating through the maze of paperwork. Every piece matters in this puzzle, and missing even one can throw a spanner in the works. So, how should you go about it?

Here’s a list of everything you need to do to prepare for an international relocation:

• Learn the local language and customs.
• Sort out your finances.
• Make housing arrangements.
• Secure health insurance.
• Get the necessary paperwork.

In the rest of this post, I’ll walk you through the above preparation checklist to help you understand why each item on it is important. Whether you’re swapping hemispheres for work, study, or just a fresh start, I’ve got your back with tips, advice, and a dose of insider knowledge. 

Let’s get on with it, shall we?

Familiarize Yourself With the Local Customs and Language

Learning your future home’s customs and language is important for mental preparedness, which can go a long way to ease your transition and minimize culture shock.

Even if you’ve taken language classes, it doesn’t hurt to perform additional research because schools and online learning platforms sometimes fail to capture important elements of social etiquette. This is particularly true for hand gestures and other forms of nonverbal communication, which often carry varying meanings in different parts of the world. 

For instance, a simple thumbs-up can be interpreted as a rude gesture or have a vulgar connotation in Afghanistan, some parts of West Africa Italy, Iran, and Greece. The same gesture is a widely accepted way of showing approval, agreement, or success in the UK, the US, and many other English-speaking countries.

Mind you, this is just one example. Many other forms of non-verbal communication have varying meanings in different cultures. 

So read up as much as you can about the culture and social norms in your new country. Don’t know where to start your research? I’ve created a super-detailed guide to help you out. Check it out here. 

Sort Out Your Finances

Relocating to a different country is a costly endeavor. If you don’t plan well and set a realistic budget, you might find out too late that you’re not financially prepared to move.

So, how do you “plan well and set a realistic budget”?

Well, everyone’s got their own unique financial situation, so there’s no one-size-fits-all answer to that question. What there are, however, are universally important considerations anyone preparing for international relocation must keep in mind to ensure they can cover their expenses and handle unexpected financial challenges without undue stress.

Let’s go over those considerations.  

Logistical Costs

These can vary depending on factors such as how far from home you’re traveling, how much luggage you’re taking with you, and the specific services you require. However, there are some logistical costs that pretty much anyone relocating to a foreign country incurs. These include:

• Freight costs. For most people, these are the most significant logistical expenses because they include more than just transportation costs. You’ve also got customs fees, import taxes, and port handling charges in the mix.
• Packing and crating. Ever played Tetris? Well, packing your belongings for the international journey is like that, but with real-life stuff. If you’ve got delicate items tagging along, you’ll likely need to hire pros to wrap and secure them properly. The amount you end up paying for this service will depend on how much stuff you’ve got and who you work with.
• Freight insurance. People often insure their belongings against freight damage, especially if the items cost way more to replace than insure. This kind of coverage adds to logistical costs, but the peace of mind it offers is often worthwhile.  
• Storage fees. If you need a temporary home for your things before or after your big move, you’ll be looking at storage costs. The amount of money you end up spending on storage will mostly be determined by the size of space you need. A reasonably sized storage unit suffices for most people, so you might want to start your search there when contemplating storage options.
• Pet relocation. Obviously, this only applies to people moving with pets. The costs to worry about here include vet checks, vaccinations, and getting your fur babies to their new home.
• Travel expenses. This includes the cost of your flight and other personal expenses you might incur during relocation. Understand that these travel-related expenses are distinct from freight costs.

Of course, the above list isn’t exhaustive. It’s only meant to give you an idea of the logistical expenses you might incur during relocation. 

Some of the above costs might not apply to you, and your situation might call for different or additional expenses. Whatever the case, list your logistical costs, add them up, and factor that figure into your relocation budget.   

Visa and Immigration Fees

Tickets to a new country often come with visa and work permit fees that should be included in your relocation budget. The exact figure you end up spending on this kind of paperwork will depend on factors like your host country’s immigration policy, the type of visa and work permit you need, and how long you intend to stay.

Visas and work permits can be a tricky puzzle to unravel, especially if it’s your first time moving to a new country. So take the time to figure out what type you need, how to get it, and the costs involved. There are different ways to get that information, but the most convenient one would be to give my super-detailed guide on work visas and permits a thorough read. It’s a well-put-together read with all the info on work visas and permits.

Currency Exchange Rates

Chances are the country you’re moving to uses a different currency from what you use back home. If that’s the case, you’ll want to ensure that changes in currency exchange rates don’t throw a spanner in the works and mess up an otherwise perfect financial plan.

There are a couple of things you can do to minimize the impact of currency exchange rates on your financial plans:

• Stay informed about exchange rate trends. This can help you proactively make tweaks to your budget to mitigate the impact of exchange rate fluctuations on your overall financial plan. Some of the best places to find the latest data on currency exchange rates include reputable financial news websites, forex trading platforms, financial apps with built-in exchange rate tracking and alerts, and the website of your home/host country’s central bank. 
• Build flexibility into your budget to account for potential currency fluctuations. The simplest way to do this would be to allocate a currency fluctuation buffer. In simpler terms, this means dedicating a portion of your budget to covering shortcomings that may be triggered by unexpected changes in currency exchange rates.  
• Plan for potential currency conversion costs when estimating your expenses. Currency conversion is rarely free. While there are workarounds to incurring conversion costs, you’d be on the safer side having a contingency fund to cover unexpected commissions and service fees you might be charged when making payments in your home-away-from-home. This can help keep your financial plan intact during that dicey transitional period between touching down in your host country and setting up a local bank account.

If you’ve got too much on your plate to do all this, you can always enlist the help of a professional who specializes in international finance, currency risk management, and financial planning. This could be a certified financial planner, a currency risk consultant, or a financial advisor with a proven track record of helping clients with international financial interests. 

Taxes

When you’re getting your financial plan ready for your big move abroad, don’t forget about the tax stuff – it’s a big deal. Taxes can really shake things up with your finances or even have you rubbing authorities the wrong way.

Here’s the lowdown on the most important tax considerations you need to figure out : 

• Tax residency status. Wrap your head around the rules and criteria used to determine your tax residency status in both your home turf and your destination country. Different countries have varying rules for determining tax residency based on factors such as physical presence, domicile, and intention to stay.
• Double Taxation Agreements (DTAs). Find out if there’s a double taxation agreement between your home and destination countries. DTAs help prevent double taxation on the same income by allocating taxing rights between the two countries, and you’d be passing up a golden opportunity to reduce your tax burden if you don’t capitalize on them.
• Income tax rates and brackets. Different countries have varying tax rates and thresholds, which can impact your take-home pay and overall tax liability. What’s more, countries like the UK and the US sometimes adjust these rates and thresholds year-to-year to account for changes in inflation, economic conditions, and other factors. So take the time to familiarize yourself with the income tax rates and brackets in your destination, paying attention to annual changes and how they affect your tax obligations.
• Foreign income reporting. Find out whether you need to pay taxes back home on the money you make in your destination country. Countries like the US, the UK, Canada, Australia, Germany, France, Japan, and many more tax their citizens on worldwide income. If your home country has a similar tax system, chances are you’ll need to pay taxes back home on income earned in your host country, and you’ll want to factor that into your financial plan.
• Social Security and pension contributions: Determine if you’ll be required to make social security or pension contributions in your destination country. Some countries have mandatory contributions that could impact your take-home pay.
• Tax deductions and credits. Research the available tax deductions, credits, and exemptions in your new country. Understanding these provisions can help you cut down your tax liability.
• Currency exchange impact. Currency exchange rate fluctuations may impact your taxable income, deductions, and credits in both your home and destination countries. Familiarize yourself with their potential impact and factor that into your financial plan.
• Tax exemptions: Investigate if there are any specific exemptions that apply to your situation, especially if you have unique circumstances or sources of income.

Given the complexity of international tax matters, you might be better off consulting with tax professionals who have expertise in international taxation. They can help you understand your tax obligations back home and in your destination country or even cook up an entire tax-efficient financial plan for you.

Debts and Loans

If you’ve got loans with ongoing repayment obligations, such as mortgages, personal loans, or student loans, you’ll need to chalk it up with your creditors to find out whether your impending move changes your interest rate and repayment schedule.

Even if you’re sure that your plans to relocate won’t affect your loan repayment schedule and interest rate, it’s still a good idea to check in with your lenders so you can jointly iron out important details like:

• Your new physical address and contact information. 
• What methods you’ll use to keep making payments after you relocate ( Tip: If you didn’t have an electronic transfer or online payment option in your previous arrangement, now would be a great time to set it up).
• What customer support center you’ll be directed to if you happen to have inquiries or concerns while abroad 一 Some lenders have dedicated customer support teams to assist borrowers who are relocating internationally.

Informing your creditors of your intentions to relocate may also come with benefits that might help smoothen your move. Some lenders have specific policies for borrowers relocating internationally. These policies may allow you to:

• Defer or postpone payments for a specified period as you settle in. 
• Access guidance on handling currency conversion and transferring funds for loan payments.
• Temporarily reduce your loan payments during the relocation period.

The Cost of Living in Your Destination Country

Keeping this often-neglected consideration in mind can go a long way to ensure you’re financially prepared for your move. 

The cost of living gives you a ballpark of how much money you’d need to maintain the lifestyle you’re accustomed to. It’s a representation of how much everyday stuff like where you live, what you eat, how you get around, and the fun things you do are going to cost you. 

Having this information when sorting out your finances as part of your relocation preparation can be helpful in two ways:

It Allows You to Set a Realistic Budget for Your New Life Abroad 

When you know what your everyday expenses will look like in your new city, you can create a budget that accurately reflects your anticipated costs. This can go a long way to ensure unexpected expenses don’t derail your plans. 

It Helps With Salary Negotiation if You’re Relocating for Employment Purposes 

When you’re relocating internationally for a new job, the salary you negotiate should not only reflect the job responsibilities and your qualifications but also align with the local economic landscape. The cost of living plays a crucial role in defining this landscape. Essentially, it’s not just about how much you earn, but how much you can effectively do with that income in your new destination.

If you’re moving from a country with a lower cost of living to one with a higher cost of living, your existing salary might not stretch as far as it used to. The reverse is true, too: if you’re moving from a high-cost location to a more affordable one, your purchasing power will probably increase significantly.

Understanding these dynamics empowers you during salary negotiations. Armed with knowledge about the cost of living, you can make a compelling case for fair compensation by basing your negotiation strategy on the specific economic conditions of your new location. 

One way to do this would be to use specific living expenses data to present a quantifiable argument for the compensation you’re seeking. This would be a great way to add credibility to your negotiation stance because it shows potential employers that you’re not just pulling your salary expectations out of thin air.

Make Housing Arrangements

Making housing arrangements ahead of time is one of the best things you can do to ease the stress of moving to a new country. International relocation is chaotic, and the last thing you want is to add the hassle of finding housing to your list of worries. 

Having a place to move into upon arrival eliminates the uncertainty of where you’ll live, setting you up nicely to proactively make logistical arrangements such as transportation from the airport to your new home. It can also help with employment and documentation. Most countries require a local address for official documents, such as work permits, visa applications, and bank accounts. Having a confirmed address simplifies these processes.

If you can’t find the kind of house you need in advance, temporary accommodation will do just fine. In fact, I’d recommend taking this route because it lets you get the hang of how things work in your host country’s local housing market before choosing a long-term home. 

Whether you’re crashing in a temporary pad or aiming to score a permanent address, finding housing ahead of time is your ticket to a soft landing.

Secure Health Insurance

As much as we’d love to believe we’re invincible healthwise, life happens. Illnesses, accidents, and injuries often don’t come with a warning, and you’d better be prepared for whatever curveballs life throws your way. 

Having comprehensive health insurance means you’re covered for medical care, doctor visits, and hospital stays without emptying your pockets. It’s an investment in your peace of mind and financial security as you embark on your international adventure. Think of it as a trusty sidekick that’s got your back when life gets unpredictable. 

Health insurance can also help with visa application, although this depends on where you’re relocating. Many countries have health insurance as a requirement for getting approved for certain visa types. 

Australia is a perfect example. International students and working visa 482 or 485 applicants must have some form of Overseas Visitors Health Cover (OVHC) to get approved for their respective visa types. This goes for any other visa type with the condition 8501: Health Cover.

Other countries that typically require health insurance when applying for certain types of visas include France, Germany, Spain, Italy, Canada, Saudi Arabia, Russia, Cuba, New Zealand, the UAE, and the Netherlands. 

Evidently, having health insurance can be incredibly helpful for both your visa application and peace of mind. 

The question is, how do you get it before your relocation date?

I hate to sound like a broken record, but it really does depend on your situation:

• If you already have active health insurance, find out if it’s accepted in your destination country. If not, find out if your current insurance provider has a presence in the country you’re headed to and inquire about the possibility of switching to a policy accepted in that country. In many cases, international insurance companies will be happy to let you make this switch when relocating because it allows them to retain a customer. 
• If you don’t have health insurance with an international service provider, find one with a presence in your home and destination countries and purchase a policy. Nine times out of ten, these companies will allow you to purchase a policy accepted in your destination while still in your home country. 
• If you can’t find an international health insurance provider in your home country, look up providers in your destination and purchase a policy online. Make sure the policy fits your budget, taking into account the implications of currency conversion. If your visa requires health insurance, double-check the policy terms to ensure they align with the eligibility criteria of your destination country’s visa requirements.
• If you’re relocating for work without changing employers, find out whether your employer is required to pay for your health insurance throughout your stay. Whether this is the case will depend on the laws in your destination country. Some countries require employers to provide health insurance coverage to their employees regardless of whether they’re local hires or international transfers. Your contract and employer’s policy on international transfers will also determine whether your employer pays your health insurance. Remember that even if all these factors aren’t in your favor, you can always negotiate, especially if your transfer comes with unique risks and hardships.

Get the Necessary Paperwork

This goes beyond getting a visa, passport, and permit. These are undoubtedly important documents, and you should have them ready by the time you’re relocating. However, that’s not what this section is about because most people relocating to a different country know they need this paperwork. If you didn’t know, now you do. 

What I’d like to highlight is documentation that most people forget or remember too late for comfort. I’m talking about paperwork like:

• Birth certificate/adoption papers
• Child custody papers
• Divorce papers
• Drivers license
• Marriage certificate
• Social Security card
• Medical/Dental records
• School records

Of course, some of the paperwork in the above list won’t apply to you. The point I’m trying to make is that you shouldn’t think just about the standard paperwork like your identification and work authorization. You also need to think about other documentation that may make your life abroad easier by allowing you to do things like drive, find work or school, access social amenities, and so on.

While you’re at it, consider getting the necessary paperwork for anyone you might be relocating with. Understand that “anyone” in this context includes your pet. Find out your destination’s requirements for relocating with pets, including:

• Whether foreign pets are allowed into the country.
• Your host country’s bans or restrictions on certain breeds. 
• The type of pet-related paperwork you need to provide upon arrival (in most countries, you’ll be required to provide your pet’s health records to show that they’re up to date on their vaccinations). 
• Whether your pet will go into quarantine upon arrival (if that’s the case, ask how long the quarantine period is and fill out the necessary paperwork).