Navigating Global Portability: Investments for Expat Investors
For many expats, the question of global portability of investments is a crucial one. This guide aims to demystify the process, providing insights into what investments can and cannot be moved across borders, and how to navigate the complexities of managing a global portfolio.
The Portability of Investments
Most investments, such as individual shares, ETFs, and mutual funds, are indeed globally portable. There is typically no legal barrier to owning them internationally. However, the tax implications can vary significantly depending on the country you move to or from.
Tax Considerations
When you move to another country, the local tax laws can impact your investments. Some expats may be subject to double taxation, while others might benefit from reduced tax rates. For instance, an Individual Savings Account (ISA) in the UK may not be available to expats after they move, which can affect how much they can save tax-free.
Investment Platforms and Portability
The challenge lies in the portability of the investment platforms themselves. Most investment platforms are not fully portable across international borders. For instance, Hargreaves Lansdown, one of the largest providers in the UK, does not allow non-EEA (European Economic Area) residents to add additional funds once they have moved abroad. Similarly, Questrade, a prominent Canadian provider, does not accept non-residents.
Specialized Providers
Individuals with relatively small investments may be able to use DIY providers like SwissQuote and Saxo, provided they can manage their emotions and avoid the pitfalls of market volatility. However, for those with larger sums and complex financial situations, working with specialized providers that cater to expats is often more beneficial.
Advisory Services for Expats
For expats with significant investment portfolios or complex financial needs, seeking professional advisory services is advisable. These services can provide tailored solutions to navigate the challenges of global investing, ensuring that investments are managed optimally across different jurisdictions.
Steps for Choosing the Right Provider
When selecting an investment provider or advisor for expats, consider the following:
Experience with cross-border investments and expat needs Knowledge of international tax laws and regulations Flexibility in terms of account management and access Security and compliance standardsGlobal Portability for Smaller Investments
For those with smaller investment sums, some DIY providers can be suitable. SwissQuote and Saxo are two examples of platforms that cater to expats, provided the individual can manage their investments without being swayed by market fluctuations.
Managing Emotions in Market Volatility
Investing involves managing emotions, and it’s natural for investors to be concerned about market downturns. The key is to develop a long-term investment strategy and stick to it, even during periods of market turmoil. Emotional investing can lead to poor decision-making and suboptimal returns.
Conclusion
The path to global portability for investments as an expat is fraught with challenges, but with the right approach, it can be managed effectively. Understanding the regulatory and tax implications, choosing the correct investment platforms, and seeking professional advice when necessary are all crucial steps in navigating this complex landscape.