Shifting your base to a different country is a big step, so it’s important to take the right financial steps before you proceed. Read on to find out how you can do just that.
Moving abroad can be exciting as well as emotional. Since it’s a big change in your day-to-day life, it can sometimes be overwhelming, especially in the transition phase. Emotions aside, the practical aspect of your move also needs careful planning and predetermination, and that’s what this article is going to help you with.
Your finances dictate your life in the real world, and this is why it’s key to plan them ahead if you’re likely to move to another country soon. Here are a few steps you must take when it comes to your money.
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Review Your Bank Accounts
This should be your first step. Once you move abroad, your accounts will be re-designated as non-resident ordinary (NRO) accounts. If you have multiple accounts, it’s best you consolidate them rather than convert each of them into a separate NRO account.
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Liquidate Your Investments
If your move is a long-term one, liquidate your assets as you may or may not be able to track them closely. However, before you do anything. do check out the tax compliance aspects in your destination country. Each country has its own level of tax compliance, and their tax compliance act will be applicable on any earnings that you make from your investments. So it’s best to gauge whether moving your investments is a fruitful deal or not.
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Don’t Forget Your Demat Account
What you want to do with your demat account entirely depends on whether you want to continue to play the market. If you wish to make fresh investments in the new resident country, your account will have to be… you guessed it… re-designated as an NRO or NRE (non-resident external) account. All earnings from your fresh investments will be sent to India via your NRE account. If you continue to earn from existing investments, even those earnings will be sent via your NRO account.
Update Your Mutual Fund Portfolio
You can update your KYC details with your new residential address and get your folio changed to ‘non-resident’. Also, you’ll need to match your portfolio to your NRO bank account.
Please note than once you’re an NRI, you cannot make fresh deposits to schemes such as the Public Provident Fund and National Savings Certificate. However, whatever you’ve already accumulated during your stay in India will continue to compound.
Evaluate Your Insurance Plans
For policies like your auto insurance, it’s best to close them if you’re leaving the country. If you’re maintaining a term insurance plan that covers dependents who reside in India, retain it.
When it comes to your Health Insurance, your new employer will most likely give you a new policy, so you can close your existing one. However, experts advise that you hold on to your existing health policy should you ever need medical treatment in India.
Leave No Loose Ends When It Comes To Your Taxes
Firstly, ensure your tax dues are all paid off for the current financial year before you move out. Secondly, try and get a double tax avoidance agreement signed by India and the new country of residence. This will free you of the liability of paying double tax, i.e, paying in both countries.
Oh, and last but not the least, get an International Credit Card. It’ll come in handy!