Foreign Nationals in the US
As a non-US citizen here on a visa or green card, you have to consider significant financial, tax, and legal matters.
Simon Brady, CFP® of Anglia Advisors talks on Asset TV about what financial advisors need to bear in mind when dealing with foreign national clients in the US.
© Asset TV 2017
Moving to America can be an exciting and fascinating experience, whether it’s for a year or two on assignment or more long term. To put it mildly, America can be very different from where you grew up. Simon, a UK-native, knows this! The same can be said of the US financial, tax, and legal systems when it comes to how they deal with foreign nationals.
As soon as you relocate and are working, you are likely to be immediately subject to a host of US financial regulations, tax laws, and compliance requirements. Not to mention the logistical challenges associated with opening a bank account, getting a loan, renting an apartment, transferring money cost-effectively, saving for retirement and college, as well as developing credit.
If you are working with an advisory professional of any kind as a visa or green card holder (or you are married to one), you absolutely must ensure that your advisor is familiar with these sometimes quirky and often complex differences between how the system treats residents and non-residents. This starts with who is a resident and who is a non-resident (and no, it’s not as simple as whether you have a green card or not).
At Anglia Advisors, we are familiar with these issues and challenges and open up our extensive network of professionals, to whom we can offer our clients access. They are specialized, educated, and experienced in international, immigration and cross-border issues.
What kind of issues do foreign nationals face in the US?
To start: adapting to a different culture, cuisine, social norms/customs, weather, media, possibly a different language, even driving on the other side of the road for some of us. Eventually, however, most of these types of challenges are overcome and adopted with practice and experience.
There is another sub-set of issues that can impact your life here as a non-citizen, particularly upon your arrival and can be far more important, yet far less well-known or understood by a foreign national coming here to live and work. Failing to address them swiftly and effectively can potentially have outcomes that range from the annoyingly inconvenient to the devastatingly catastrophic.
When you become classified as a resident alien (when and how this happens is a whole other conversation) to the tax authorities in the US, you are subject to US income taxes on your worldwide income.
Think because you had an Amex card back home for the past 20 years means anything to major US banks when you apply for a US card? Think again.
RETAIL BANK ACCOUNTS
Increasingly, US retail banks are making life more and more difficult for foreign nationals to access the full range of retail banking services offered to US citizens, especially if Social Security numbers are not yet established.
YOUR OVERSEAS ACCOUNTS
In addition to declaring the income on your accounts held outside the US on your regular tax return, you may have extra obligations to separately disclose details about many of them. The penalties for not doing so can be extremely high.
401K, 403B, IRA, 529, ETC…
When it comes to retirement savings and investing options, Americans love their acronyms. And trawling through this alphabet soup of different options is daunting. In most cases, however, you shouldn’t stop saving for retirement and investing while you are here, even if you don’t intend to stay in the US long term.
What plans do you have for your local pension and retirement accounts while you are in the US?
US estate tax laws treat foreign nationals very differently than US citizens. Chances are, if you’re here, you will be subject to them. How you are impacted can differ greatly according to a number of factors, including if you have a visa or a green card. It is essential to understand and prepare for the consequences if the worst happens while you are in the US.
LISTEN HERE TO A PODCAST IN WHICH SIMON DISCUSSES THE PARTICULAR, AND OFTEN SCARY, ESTATE TAX CONSIDERATIONS IF YOU ARE A FOREIGN NATIONAL, PARTICULARLY A RECENTLY- OR SOON-TO-BE- ARRIVED ONE.
MORTGAGES AND OTHER LOANS
Getting a mortgage or even a car loan without solid, established US credit and an income history over here can prove to be extremely challenging unless you know where to look. Our referred specialist mortgage specialists and real estate attorneys can be of enormous assistance.
RENTING AN APARTMENT
Typically, landlords or building management companies want to see some US credit history, US bank statements going back a few months and US income history to grant residential leases without asking for many months rent (or even a full year) in advance.
COMMERCIAL / RETAIL REAL ESTATE
Finding office space or a retail location for your business can be a complex and time-consuming process (especially in somewhere like New York) without the assistance of specialized and experienced professionals who understand the needs of newly-arriving foreign business owners. These will include real estate brokers, real estate attorneys etc.
LLC? S-Corp? C-Corp? Branch? Affiliate? Subsidiary? Business structure is all important when first arriving here to set up a business, since decisions that you make up front will have significant effects on your businesses and taxes going forward many years.
Bringing money in from overseas can be an expensive process if you use traditional banking methods that charge high fees and often give poor exchange rates. Using specialist providers is often a better alternative.
Many of the documents you have with you may need to be translated, and not just by your polyglot friend. Official services exist that will carry out widely-accepted translations.
Silly as it may sound at first, how you behave and interact with locals and their customs will have an important effect on your professional and social life. Experimenting through trial and error is a risky way to learn these lessons and specialist help is available.
JOBS AND CAREERS
Finding and changing jobs here can be challenging if you aren’t familiar with the process. Not only are there immigration status questions that may need to be addressed, but Americans have different standards and expectations when it comes to CVs/resumes, cover letters, interview technique, online presence etc. Working with a professional in advance can profoundly improve your chances.
Depending on your citizenship, obtaining life insurance may be problematic without the assistance of a specialist who can effectively navigate the foreign national policies of all the different insurance companies in the US.
Unfortunately, not everyone is entitled to capitalize on America’s tax-advantaged college savings plans; your residency status and that of your children may affect this.
Why Anglia Advisors?
The laws that impact foreign nationals, in particular the overseas account reporting obligations, are very dynamic and can change abruptly without notice. This is why developing a relationship with an advisor, who is not only on top of this stuff, but also has a roster of specialist professionals, is vital. That’s where Anglia Advisors comes in. Simon regularly gives presentations on these topics in front of various audiences, including at the New York Public Library, collections of accountants and other financial planners, immigration attorneys and their clients, MeetUp groups, international trade groups, firms with high foreign national head-counts as well as privately-organized groups of interested individuals.
More importantly, we have an extensive network of specialist professionals who can help with the issues listed above. This network is made available to our clients.
As a Registered Investment Advisor, Anglia Advisors is NOT permitted to offer direct tax advice, legal advice or medical advice, either domestic or international, and no firm communications of any kind (written, media, electronic or verbal) should be construed as such.
POST-IMMIGRATION FINANCIAL PLANNING
As a foreign national who is already somewhat established in the US, you either may be certain you have been through it all or may be completely unaware of these issues. In any case, as you move up the immigration ladder (visa to green card to full US citizen), the extent and nature of these issues can shift dramatically. While some problems may fall away at each stage, other considerations may arise. It’s important you know exactly how your situation will evolve when, for example, you get a green card. Anglia Advisors, in partnership with our professional network, can be your guide through this complicated transition period, so you remain aware of these little-known considerations.
PRE-IMMIGRATION FINANCIAL PLANNING AND RELOCATION ASSISTANCE
Anglia Advisors can be of greater help if we connect prior to your arrival to the US. Not only will we make preparations for your arrival, connecting with banks, real estate professionals, and the like, but we will also take on a lot of the heavy lifting in terms of the more “concierge-style” aspect of your arrival. We will organize appointments with whatever professionals and organizations with which you need to speak upon arrival (real estate, insurance, credit, estate planning, legal, banking etc. etc.) and, if you wish, we will even attend some of these consultations with you as your advocate. We can help you set up certain financial accounts online even before you depart and get the potentially complex process of renting an apartment or house under way in advance, with the possibility of pre-approval before you get on the plane so that you can finalize your search immediately upon your arrival.
In conjunction with your US employer if you wish, we are able to prepare a unique, fully-customized Welcome Pack ready for you on the day you arrive. This packet will include useful information about your new neighborhood, important contact details of consulates, utility companies, schools and daycare centers, social and cultural resources (such as the local restaurant that serves that dish just like you remember it from home), a timeline of what needs to be achieved in the first weeks, definitions of financial and corporate terminology that may cause you confusion and much more.
An Anglia Advisors expert will offer insight to the multitude of questions you all may have, with assistance available to you for a couple of months after your arrival while you settle in. At that point, you can optionally extend access to both the advisor and Anglia Advisors’s extensive professional network if you wish by means of an ongoing subscription model.