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Indispensable Expat Insurance – Useful Info


One fact that this article is meant to emphasize in its importance is the indispensable expat insurance that all those people living abroad should prioritize within their overseas living. There are of course all sorts of other matters to consider but having insurance for various situations of life is by far the plan that you need to draw once settling in another country for a period of time.

Residing in another country other than your home country is definitely a challenging experience that not many people have the chance to live. So if you are given this chance you should take advantage of enjoying it at its maximum by ensuring the peace of mind with indispensable expat insurance.

But let’s see why getting insurance is so important for your residence abroad:

* First of all you get your health, career, finances insured for the duration of your staying. You can never know what can happen while being out there away from your home country speaking other people’s language and living among another cultural customs and traditions.

* Secondly, you must know that with the new country you reside in there is a new world opening to you and as with any novelty appearing in one’s life there are all sorts of unpredicted situations that you should be prepared to cope with. This is where the indispensable expat insurance makes its way to you. There is no one to tell you when this insurance may come in handy so think about it!

The following expat insurance policies have become in the meanwhile indispensable:

1. Health insurance is of the utmost importance. There are several companies providing their insurance plan for taking good care of your health while living abroad. There are all sorts of medical problems that can occur to people residing in foreign countries be they emergencies or regular medical check ups.

2. International vehicle insurance is a must in case you plan to take your vehicle with you when residing in another country.

3. Travel insurance comes as another indispensable expat insurance for those who travel abroad. This comes in handy for those situations where any of the valuables can get lost covering as well the costs for transportation if there is an unexpected event (such as bad weather) that can cancel the trip.

Expat Life Insurance: The Benefits of having Life Insurance when working abroad


Working abroad as an expat it is important to make sure that all the things are well taken care of among these the expat life insurance should be as well considered for your family benefit. You can never know how life evolves and its unpredictability can be a good reason to determine you to find protection behind its coverage.

It is true that many people who have life insurance policy in their home country consider that this policy will be of help when they need to relocate abroad. But it is not the case especially for the ones who have purchased life insurance in UK and need to live abroad. So, if you are an US. citizen and want to relocate in another country the policy you have for your life insurance won’t help you as an expat.

In order to protect your family in the event of an unavoidable fact of life, you should learn how expat life insurance can help. Death is something that many of us feel to avoid thinking of, but one can never known what is there in the future waiting for them. As such being prepared for the unpredictable with a life insurance policy can be the ideal thing for your family. Once you won’t be with them, you need to ensure that they have a financial protection coming from you, and with an expat life insurance while living abroad you can have this peace of mind.

This thing is moreover necessary if you are the only provider for your family. Just imagine that once working abroad and getting severely sick without this life insurance policy you can leave your family without any financial support. It is something that nobody will want for their families not to mention that in case of death there will be all sorts of costs involved that need to be covered. Your family will have to do the arrangements to transport you back into your home country and take care of other things for funerals and so on. All these can be covered with your expat life insurance when unpredictable death occurs while residing abroad.

One other thing that you can help your family with (through your expat life insurance) is the amount of money they can receive to comply with the financial commitments when they must recover from this huge loss. So, with this type of life insurance you can have the peace of mind that your family won’t take the rest of their life as a financial burden they need to carry on their shoulders.

Guardian Life Management – Hong Kong

Guardian Life Management - Hong Kong
Guardian Life Management - Hong Kong

Guardian Wealth Management is now one of Asia’s largest independent financial consultancies. Our growing network of advisers means that should you move to another country within Asia, we guarantee that your file would be passed to another of our consultants near you.

If you were to move outside of Asia, we would ensure that you were looked after by one of our regulated affiliates in that region. You are guaranteed an annual review of your financial situation wherever you are in the world.

Client satisfaction is important to us – and vital to our continued success. Managing your money does not stop with signing forms for particular investments or policies. Profit and protection is naturally important to you, so we constantly monitor your investments to check on their progress.

As a large independent brokerage, Guardian Wealth Management enjoys privileged relationships with investment houses. Not only do they approach us with exclusive deals, but they also keep us informed about their fund managers – this means you know exactly who is responsible for the performance of your money.

Having enough money to enjoy life and provide for a happy, financially-sound future is the focus for most of us during our working lives. But not everyone manages to achieve this; people don’t plan to fail, they simply fail to plan.

Our aim is to provide the finest quality service to help clients achieve and maintain their financial independence with peace of mind and security.

We bring the future into the present, so you have sufficient time to reach your financial goals. It’s advice with forethought, not afterthought.

Put simply, you meet us to discuss your life goals and we plan to make your money work harder for you to achieve them.

From funding school fees to building a retirement income, bring your future into the present with Guardian Wealth Management.

Guardian Wealth Management is well-known and respected for providing an exceptional financial planning service to international clients.

We have been helping international workers and expatriates with their specific financial needs since 1994. Our network of Financial Consultants and dedicated Client Administration Centre operate to the strictest standards set down by financial regulators and professional bodies.

You, the client, experience the benefits of our being completely independent from any financial institution. We are free to select the ideal products to meet your needs and able to respond quickly to any changes in the financial landscape.

Keeping our clients’ interests at the forefront of our minds, we continue to grow due to our consultative and forward-thinking approach.

Expat Living in Japan Guide


Japan has been described by some as “the ultimate East-meets-West, 20th-century experience,” and indeed, it is a land of contrasts. A place where ancient culture lives in harmony with modern technology . . . where quiet tradition rubs elbows with glitz and glamour . . . where cherry blossoms release their gentle fragrance in the shadow of cold steel skyscrapers.

The country itself comprises four main islands and thousands of smaller islands. Its climate is temperate, with hot, humid summers, and winters that are cool and dry. April, May, October and November are generally considered among the most pleasant months of the year.

With the exception of the island of Hokkaido, all of Japan experiences two rainy seasons. Tsuyu begins in early June in most of the country and often lasts until the middle of July. A second, shorter rainy season occurs from early September through mid-October.

The way of life

Politeness and propriety are the cornerstones of Japanese life, and maintaining harmony or wa, is king. Although the Japanese do not expect foreigners to understand their ways, they are pleasantly surprised — and honored — when they do. Expats who take the time to learn and respect the Japanese culture will find this greatly eases their social and business relations.

In business, the Japanese are practical, hard-working, and highly conscious of status. People are addressed by their surname and the suffix san; first names should not be used. Japanese always bow to one another — although handshaking is also common in business — and the depth of the bow connotes respect for the other’s position.

Business cards are an important aspect of doing business in Japan. Ultimately, the cards should be printed in English on one side, Japanese on the other, and reflect the expat’s title and credentials.

Office dress is relatively formal, with business suits and white shirts the norm. Punctuality for business and social meetings is critical. Given the complexity of Japanese addresses and the ever-present traffic, it’s wise for expats to leave adequate time for travel.

Although the number of women in the Japanese workforce is increasing, their numbers are not on a par with women in the US. Those who are in the workforce tend to hold positions of lower rank. The result is that many Japanese businessmen today may appear aloof or uncomfortable when dealing with female expats.

Daily living

Credit cards were relatively rare in Japan until the mid-1980s. Today most major credit cards are accepted by large hotels and leading stores, but cash is still more useful in areas not frequented by foreigners.

Japan has a wide variety of restaurants with food from all over the world. Prices vary, but most are considered expensive by Western standards. Less expensive meals are available in department store dining rooms, and restaurants in downtown arcades and office blocks. Of course, there are also plenty of familiar American restaurant chains, including McDonald’s, Kentucky Fried Chicken, Red Lobster, Tony Roma’s — even Dunkin’ Donuts.

Supermarkets in larger neighborhoods offer a selection of moderately priced domestic and imported products. Many neighborhoods also have smaller stores specializing in meat, fruit, vegetables, bread and fish, which are also reasonably priced. In addition, Tokyo and other major Japanese cities have stores that cater specifically to foreigners. Although these offer the convenience of familiar Western-style products, expats will find they are considerably more expensive.

Taxis, limousines and buses run from the airport to the center of the city, and some buses run by hotels as well. Japan Air Lines, All Nippon Airways, and Toa Domestic Airlines all offer flights within Japan. Japanese trains provide punctual, comfortable service, and link to most major cities. Subways operate in Tokyo, Osaka, Yokohama, Nagoya, Fuknoka and Sapporo.

Housing options

In major Japanese cities, it is possible to rent modern apartments or homes, or even a traditional Japanese home. Accommodations are smaller than most Western expatriates expect, and second (and third) bedrooms tend to be especially small.

When signing a rental contract, expats may have to pay a large sum of money upfront. This may include a one-time rental deposit ranging from two to six months’ rent; a real estate agent’s fee equal to one-month’s rent; and an advance rental payment that can range from two month’s to one year’s rent.


In Tokyo, expats favor the Hiroo/Azabu area west of downtown, which offers many flats with Western-style living and neighborhood conveniences, good public transportation, and international schools. Apartments are usually unfurnished, and feature a garage, and sometimes a swimming pool.

Shibuya is a large sub-city with major Western conveniences, a variety of accommodations, and family-oriented features, including international schools and good public transportation.

Yoyogi-Uehara is a residential suburban area, with a variety of accommodations, a large children’s park, Western-style supermarket, good public transportation and international schools.

Other popular areas for expats include Takanawa, Shiokane and Shiroganedai, which have some detached homes; Bancho, Kohjimachi, Ichigaya, and Yotsuya, which are residential areas with new structures and easy access to schools; Ohyamacho and Nishihara, which are residential areas with apartments and homes for rent in proximity to bus routes for international schools; Setagaya, which is near international schools; and Den-en-Chohfu, which is a more upscale residential area that has detached homes with gardens.

The following monthly rents for Tokyo represent citywide averages. Expats may be able to negotiate prices down by as much as 20-30%, however, due to a depressed economy.(Need help converting currencies? Check out the GNN/Koblas Currency Converter.)

Apartments – one-bedroom: ¥320,000; two-bedroom: ¥580,000 to 850,000; three-bedroom: ¥650,000 to 1,000,000; four-bedroom: ¥1,200,000 to 1,300,000.

Semi-detached houses – two-bedroom: ¥350,000 to 550,000; three-bedroom: ¥500,000 to 800,000.

Detached homes – three-bedroom: ¥700,000 to 750,000; four-bedroom: ¥850,000 to 900,000.


In the Yokohama area, Bluff has the most expensive accommodations. Expats will find residences there are larger with small gardens, and some have garages and swimming pools. The area also has adequate public transportation and international schools.

Negishi is a mainly residential area located in proximity to the Yokohama Country Athletic Club, which has many foreign members. Public transportation in the area is good. There are also a variety of properties and international schools.

Honmoku is a restored area with many apartments and homes, an excellent infrastructure, and nearby international schools, shopping facilities, parks and recreational facilities.

Following are average monthly rents for Yokohama. As with Tokyo, the rents may be negotiated down.

Apartments – two-bedroom: ¥270,000 to 275,000; three-bedroom: ¥375,000; four-bedroom: ¥400,000 to 450,000.

Semi-detached houses – three-bedroom: ¥325,000; four-bedroom: ¥325,000 to 400,000.

Detached homes – three-bedroom: ¥350,000 to 375,000; four-bedroom: ¥550,000 to 750,000.


A pleasant residential area 25 miles from downtown, Kobe-Millage has a variety of rentals (some with garages and pools), good shopping facilities, restaurants, and international schools.

Ashiya is 12 miles from the center, and has excellent shopping, restaurants, transportation and international schools.

The Kobe-Chuo-ku area is located 32 miles from the center, and is a residential area with good access to shops, restaurants, public transit and international schools.

The following average monthly rental rates for Osaka may be negotiable.

Apartments – one-bedroom: ¥200,000 to 250,000; two-bedroom: ¥330,000 to 350,000; three-bedroom: ¥440,000 to 500,000; four-bedroom: ¥600,000 to 700,000.

Detached houses – three-bedroom: ¥500,000 to 620,000; four-bedroom: ¥680,000 to 900,000.

Educational choices for expat children

Academic standards at Japan’s international schools are high, and grade scores on standardized tests are significantly higher than in US schools. Most expatriate schools in Japan follow the American system, although there are other schools available. Tuition at many international schools is high. The following schools offer instruction in English:

Tokyo – American School in Japan (ages 3-18); British School in Tokyo (ages 4-12); International School of the Sacred Heart (ages 3-18); Japan International School, for children whose native language is not English (ages 5-16); Nishimachi International School (ages 4-18, except girls only from age 6+); St. Mary’s International School for Boys (ages 6-19); Seisen International School (ages 4-18, except girls only from age 6+).

Yokohama – Yokohama International School (ages 2.5 – 18); St. Maur International School (ages 2.5 -18); St. Joseph International School (ages 5-18).

Kobe – Canadian Academy (ages 4-18); Marist Brothers International School (ages 4-18); St. Michael’s International School (ages 3-12).

Other cities – Kyoto International School, Kyoto, (ages 2-13); Fukuoka International School, Fukuoka, (ages 4-18); Hiroshima International School, Hiroshima (ages 3-18); Okinawa Christian School, Urasoe City, Okinawa (ages 4-18); Osaka International School, Mino City, Osaka (ages 5-18).

Health and safety

The quality of available medical care in Japan is good, in fact, Japan has some of Asia’s most advanced medical services and facilities. Many US medical insurance policies, such as Blue Cross/Blue Shield, are accepted in Japan, although expats may be expected to pay their bill first and be reimbursed by their insurance company. English-speaking, Western-trained doctors operate from clinics or their own practices in Tokyo, Yokohama and Kobe. Prescriptions written by US doctors are usually not honored in Japan unless they have been approved by a local physician. Some US prescription drugs are available over the counter in Japan. On the other hand, some drugs sold over the counter in the US are illegal in Japan.

Japan’s crime rate is low and its arrest record high, so no special security precautions are necessary. Although there are pickpockets and baggage thieves at the airport, as there are in most major world cities, they tend not to be Japanese.

Staying in touch

Major post offices in Japan are usually open from 9:00 a.m. to 8:00 p.m. on weekdays, and from 9:00 a.m. to 3:00 p.m. on Saturday (some are open as late as 5:00). Larger post offices are also open on Sunday from 9:00 a.m. to 12:00 p.m.

The main post office in front of Tokyo Station has an English-speaking staff. Stamps can also be purchased from stationery shops, cigarette kiosks, and other places displaying a double-crowned “T” on a red background. Unlike in the US, stamps are placed on the upper left corner of the envelope, and return addresses go on the back.

Telephone service in Japan is automatic and reliable. Japan’s country code is 81; its international access code is 001. Tokyo phone numbers have eight digits. Blue and green phones accept ¥10 coins only; yellow and green phones accept both ¥10 and 100 coins. Green phones also accept telephone cards, and those marked “International and Domestic Card/Coin Telephone” will let you make direct ISD calls as well. All phone boxes have English-language instructions.

Tokyo is home to a number of excellent English-language bookshops, including The National Book Store and the Maruzen chain of stores. Its major daily newspapers — Asahi, Yomiuri and Mainichi— print both morning and evening editions. Other leading dailies include the Nihon Keizai (financial business), Sankei, and three major industrial dailies — Nikkan Kogyo, Nihon Kogyo and Nikkei Sangyo. There are also four English-language dailies: The Japan Times, Mainichi Daily News, The Daily Yomiuri (morning), and the Asahi Evening News. The Nihon Keizai publishes a weekly English edition called the Japan Economic Journal. Japan’s main economic monthly, The Tokyo Keiza, also publishes an English version (Tokyo Business Today). Foreign newspapers and magazines are available in main cities within two days of publication.

An easier transition than some

As with any foreign assignment, expatriates to Japan will face the normal challenges of adjusting to life in a new location. But in the unique mix of the Japanese people, culture and infrastructure they’ll find a support system not present in many overseas locations. Those who embrace this support, and take the time to know and respect the people, should have little trouble calling Japan home.

Expat Relocation, Is it Worth it? A financial analysis of an employee’s move


Developing a financial analysis of an employee’s move helps both the employer and employee determine whether a relocation is really worth it.

You call a key employee into your office on a Friday afternoon and ask him to transfer to the company’s New Jersey office. The new job, you say, includes a $10,000 increase in salary and loads of potential ‘in the future.’ You give the employee the weekend to think about it.

No doubt, a million questions start popping into the employee’s head. He’s heard New Jersey is an expensive place to live. Is $10,000 enough? What do houses cost? How high are the property taxes? Income taxes? What about his partner’s career? Will the kids like it there? Will he like the new job? What happens if he decides to refuse the job transfer?

In the meantime, you are left wondering about the compensation package you’ve offered. Is it too much? Too little? Is it enough to convince the employee to move? How will you persuade him to accept the assignment if he decides to say no?

Developing a comprehensive financial analysis of a move makes sense for employees and employers alike. It enables employees to fully evaluate a relocation offer before saying yes, eliminating financial uncertainties and stress.

Employers can use the analysis as a tool to plan appropriate compensation, or to demonstrate the validity of the relocation package. The analysis can also be used to persuade reluctant employees to move.

  • If the employee is moving from a high cost area to a location where living costs are lower, an analysis will likely show a positive cash flow, which will encourage the employee to relocate. Lower salaries can also be justified, and demonstrated to the employee, saving the company money.

  • Employers in higher cost of living areas can use the analysis to convince employees moving in from lower cost areas that the after-tax cash flow isn’t as bad as they thought. Often, reluctant employees must relocate to high cost areas to advance their career. But they want just compensation, calculated in gross salary dollars. A confidential analysis will show an employer how much the employee should be paid to compensate for cost of living differences.

  • Employers can also use the analysis to make sure employees are comparing ‘apples to apples’ in their relocation decision. Many employees attempt to upgrade their standard of living at the employer’s expense, usually through unfair housing and community comparisons.

Covering all the bases

Since relocation can cause major financial changes for the transferee’s spouse, companion, children, and dependent parents, the analysis should include the employee and family. Each financial change should consider the federal, state and local tax impact, where appropriate, at the individual’s projected marginal tax rates. Following are some of the changes to consider in your analysis.

Family income

The change in family salary, wages, business income, or retirement income represents the after-tax cash flow of salary, self-employment income, or retirement income for the entire family, due solely to the relocation. It should not include changes that would have occurred if the family hadn’t relocated, since this would obscure the real cost and would be unfair to the employer. It should be net of federal, state and local (city) income taxes, as well as social security taxes.

Relocation can also bring about changes in retirement income, because states tax such income differently. Double taxation can occur if the state doesn’t allow a credit for taxes paid to other states. Of course, if the new state doesn’t have an income tax, or has a lower income tax, the transferee or family will incur additional taxes.

Dual-career issues

The dual-career syndrome, a problem experienced by many families these days, occurs when a transferee’s spouse or partner has difficulty finding employment in the new area. The financial analysis should include the projected decrease in the partner’s income for the first year after the move.

Automobile expenses

Relocating employees often overlook increases in their automobile expenses. These can include changes in commuting distances, automobile insurance rates, personal mileage (for example, to return home to see friends and relatives, or to access qualified medical care), tolls and parking, use of a company car, and an increase or decrease in the amount the employer pays for business use of the employee’s personal car. Some of these changes have tax implications, while others do not. Most people, however, tend to underestimate automobile operating expenses, probably because the major portion of the expense is depreciation (a non-cash item), and the expenses are paid gradually.

A difference in benefits

Changes in job benefits are often a factor if the employee is changing employers, and occasionally when transferring within the same firm. Items to consider here include changes in medical insurance, life insurance, retirement plans, and other perquisites, such as day care.

Changes in state and local income taxes should be included, net of federal tax effects. The family’s income should be recalculated using the tax laws of the new state, and city (if there are city income taxes). The analysis should also consider employees who choose to live in one state and work in another. In such cases, the employees will pay non-resident income taxes in the state in which they work. Most states have reciprocity agreements to prevent double taxation that permit residents to deduct taxes paid to other states.

Real estate changes

Changes in housing costs, are, of course, a major item. It is important to make valid, meaningful comparisons when examining housing costs between the two areas. These comparisons should include the same size houses (square footage, number of bedrooms, etc.), and lot sizes. Real estate taxes and rent — if the employee chooses not to buy — should also be included, as should the federal income tax impact of these changes.

Yet another factor to consider is the change in interest rates resulting from the employee’s sale of the existing home and purchase of a new home. If the employee purchases a less expensive home in the new area, he or she may incur federal and state capital gains taxes. Capital gains shouldn’t be included in the analysis, since it occurs only once, nor should it be part of the calculation for an ongoing salary. The employee should, however, be reimbursed for this tax, since it resulted from the relocation.

Likewise, if the relocation results in the employee having to sell investment real estate, a partnership, or stock in a closely held business, then the employee will incur capital gains or losses.

Moving expenses

Finally, the analysis should include the cost of moving household belongings; travel expenses, including meals and lodging for the family; temporary living expenses in the new area; pre-move househunting trips; real estate agents’ fees; legal fees to buy and sell the employee’s houses; points to pay off an old mortgage or secure a new one; and redecorating expenses. Since these are one-time expenses that will not be repeated in future years, they should not be included in the salary calculation. And while employees should be reimbursed for these expenses, if the purpose of the analysis is to show gross salary equivalents, then the moving expenses should be excluded, since they will not reoccur.

Most employers will pay some or all of these expenses, but it is wise to be specific about what will be reimbursed. The reimbursement of deductible expenses is not taxable, while the reimbursement of non-deductible expenses is completely taxable. Therefore, the employee must be reimbursed for the federal, state, local, and social security tax impact on the portion of the reimbursement that is non-deductible — or the tax gross-up payment. Since the tax gross-up is also taxable, the calculation becomes a little complex. As a result, many employers calculate this amount incorrectly. They usually do not reimburse for the state, local and social security tax impact, and assume all taxpayers are in the same bracket.

A win-win situation for all involved

There are a number of critical financial variables for employers and employees to consider when contemplating a relocation. Developing a comprehensive financial analysis in advance helps alleviate employee stress and anxiety, and ensures employers make equitable financial decisions — for their companies and their employees.


Expat Relocation to Japan: Understanding the Japanese Mindset

Understanding Japan
Understanding Japan

Understanding a country’s customs and culture will help your expats appreciate why others communicate, negotiate or build business relationships the way they do.

A collective consciousness

One of the most important traits of the Japanese mindset is its collective nature. In Japan, we comes before I — a concept that’s taught early on. Unlike Western children, who are taught to be independent self-thinkers, Japanese children are educated in a way that stresses interdependence, and reliance on others.

Many Japanese habits and customs stem from this desire to maintain the group. For example, Japanese companies usually hire workers once a year, forming a ‘class’ similar to a group of students entering school. Employees exhibit strong loyalty to a company, often staying there for an entire career.

Being excluded from the group is serious punishment in Japan. An interesting example of this is that children are sometimes punished by being sent out of the house, whereas comparable punishment for a child in the US would to be “grounded” or kept inside.

A hierarchical society

The Japanese have great respect for fixed hierarchical relationships. They are conscious of the social order and their status relative to others in society. This emphasis on hierarchy is reflected in the writings of Confucius, who taught that each person has a fixed place in the social order, with attendant obligations and responsibilities.

Although the institution of Confucianism has waned in modern day Japan, it exerted significant influence over the country’s cultural development. The Japanese still greet each other by bowing, with the person in the junior hierarchical position always bowing first — and lowest.

Hierarchy is also evident in the Japanese language. For example, there is no simple word for brother and sister as there is in English. Instead, there are more specific words for siblings that indicate whether a brother or sister is older or younger than the speaker.

In school, there are divisions between senior and junior students. The younger students use the polite form of address when addressing older students. This junior-senior relationship continues even after the school years.

The importance of face

Although the concept behind the value of “face” is not new to Americans, who understand the expression “to save face,” it is the key to a deeply held cultural value. The Japanese go to great lengths to avoid calling attention to anything that might cause embarrassment to themselves or others.

As a result, they are less likely to act spontaneously, and will carefully consider all the possible implications of a decision. In the same way, singling out an individual for praise or criticism is also unwise if it separates the individual from the group.

Maintaining harmony

Closely tied to both collectivism and face is the ideal of wa, or harmony. The Japanese are taught to seek a harmonious solution to each situation. Whereas Westerners believe in universal laws regardless of the situation, the Japanese are more particular, and believe that each situation has unique factors. In fact, until their interaction with the West during the past century or so, the Japanese did not have a word for objectivity; from the Japanese point of view, everything is subjective.

Kashi and kari

An important Japanese cultural trait is that of social reciprocity, or kashi and kari — literally loan and debt. When one person does a favor for or assists another it creates an expectation that the person being helped will then provide a favor or gift in return.

At its simplest level, this means that while dining with others one never pours sake or beer for himself; it is always poured by a friend or associate. In business, it means if one person does a favor for another, the recipient of that favor is obliged to return it at some future date.

Indirect communications

When communicating with others, Americans tend to come straight to the point. The Japanese, on the other hand, value ambiguity and tact. They emphasize what someone wants to hear, rather than what is most direct or honest. They tend to distinguish between what they say (tatemae) and what they think (honne). In a culture that values polite, indirect behavior, words do not always express what a person is thinking. Naturally, this increases the importance of nonverbal communication.

Also, as is true with most Asians, the Japanese dislike using the word ‘no’ in direct response to a request. When you hear ‘yes’ from a Japanese, be sure to watch for nonverbal cues that indicate whether the answer is being given with enthusiasm — or caution.


Build a financial plan that can keep pace with your income.


You know the old joke — it’s not what you earn, it’s what you keep. Well, fast-track young managers in Asia who want the last laugh will start putting together a financial plan that includes investment, tax, and offshore banking components. But the most important step in real financial planning is making the decision to build a formal plan. Everyone thinks that they have a plan – but most of them are really just dreams and wishes.

If you’ve reached the point in life where you can start thinking about your future, then you need to think about writing a formal financial plan.

Before we talk about what a financial plan IS, let’s be clear on what a plan is NOT.

2 traps to avoid:

Household budgeting is not planning.

    1. It’s important. Do it. But it’s not the same thing as long term planning. A good financial plan will take into account the next 50 years or so, but it’s the first 10 years that are the most challenging. Young people get into the habit of living hand-to-mouth as they build their careers. It’s cute until you’re 25, then its time to act like you know you’re supposed to have a clue. Hint: Your goal is not to have a lot left over at the end of the month to put into savings – your goal is to start with a big amount already allocated for investment.


Quantum Finance.

    1. The other extreme is just as bad. Some people are so confident in their future earnings stream exploding into the stratosphere five years from now that even trying to plan for the future makes no sense. Entrepreneurs and young bankers are famous for this. “Why scrimp to save $1,000 when I’ll be earning (insert ludicrous sum here) in 5 years?” This is not planning. Put down the Maxim and do some math.


The SML Method: Short, Medium and Long term commitments.

A sensible approach to building a plan is to divide up your financial future into three zones. Short, Medium and Long.
Then ask yourself – what are the big expenses or investments that you can plan for in the next 3 years, the next 7 years, and for 10 years out? There are always surprises, but there are some big bills coming due that we are certain of. Start there.

Don’t overlook these common expenses:

Short term:
Emergency fund of cash
Wedding / divorce
Babies (see above)
Moving expenses

Medium term:
Education / tuition
Investment property

Long term:
Retirement age
Retirement income

Get as specific as possible, and use the process as a framework for discussion – not a fill-in-the-blanks quiz. Prioritize, and then get ready to make real choices.


Expat Investments: What are ‘Insurance Wrappers’ ?


Soon after you started researching financial planning, you probably encountered the phrase ‘insurance wrapper’. The basic concept is that mutual funds and other tradable financial instruments can be ‘wrapped’ in an insurance policy to give it additional tax and estate planning benefits. Theses are insurance products in name only – the actual insurance coverage is only about 1% of the value of the portfolio, and investors don’t have to pay separate insurance premiums. 100% of contributed capital passes right through to the investment funds. The result is a flexible, tax-efficient structure for investing in the same types of funds that most households are already using.

Why are these instruments so popular now?
Insurance wrappers allow private investor to put their investment asset portfolio in a tax efficient structure. Earned income is tax-free as long as the assets remain within the wrapper. Policy holders can make their own investment choices or direct a professional fund manager to take charge. This approach is also appropriate for estate planning because the investor can designate a beneficiary who will receive the life insurance proceeds (i.e.: investment funds) tax free.

How does it work?
Unless you have millions to invest in a private placement, your best bet is to use an off-the-shelf savings or investment plan offered by large, stable insurance companies. Big international houses like Generali, Aviva, and Friends Provident should meet most household investor’s needs. They are stable, regulated and usually domiciled in tax havens such as Isle of Man, Guernsey or Hong Kong.

Your advisor will help your figure out how much to invest. Investment plans usually come in the form of regularly scheduled cash injections or a single lump-sum payment. Some plans are more flexible than others when it comes to changing your schedule or adding lump sum payments, so makes sure you understand your options.

Once you have made the necessary decisions, you take ownership of an insurance policy while the insurance company retains ownership of the investment assets. A contract secures your ownership and stipulates your rights, responsibilities and names a beneficiary.

What about the premiums and fees?
The assets being placed within the wrapper count as the premium paid. You will pay fees and charges for the set-up and management of the insurance wrapper, but not in the form of premiums. Fees vary with the company and product, but most use a variable system of charges may include an ICP, or Initial Contribution Period, management fee, or other charges and fees. Ask your financial consultant about the ‘all-in fee’ for a specific term to compare different contracts.

What are the benefits?
There are 5 important benefits to using insurance vehicles as long term savings plans. Security. These companies are old, secure and highly regulated. In most cases the funds are protected and guaranteed by government agencies, but you must check carefully since contracts vary.

This type of savings plan is highly efficient. That means no unnecessary taxes. Investors are not taxed on growth of investments held in the wrapper but you are still governed by applicable tax authorities. Once funds are removed from the insurance wrapper your tax situation will depend on your specific situation and the governing laws of the jurisdiction in which you operate. (In most cases law abiding Americans are going to find that they are not getting as much of a benefit as their European and Asian counterparts.) Everyone’s situation is unique, and you should make sure that you discuss this issue carefully with both your financial advisor and tax specialist.

Insurance wrappers are consumer products, and have many convenient features built in to the basic contract. You should investigate what competing contracts offer as far as access to investment funds before the end of the plan term, suspension or changes to premiums, and free switching between mutual funds. Companies offering insurance wrappers work hard to maintain a wide range of in-house or authorized funds that gives most investors an adequate choice. All wrappers should allow you to assign beneficiaries, giving the plan a strong estate planning function as well.

Professional management.
Regular savings plans are built and managed by financial professionals and fund managers. Most plans offer professional portfolio management for free or at low fees. Furthermore, wrappers integrate very well with the rest of your financial and estate plans.

Figuring out the final cost of these programs isn’t easy but if you are investing for over 15 years you’ll probably find that your all-in costs are under 2% of total funds under management. You will have trouble finding a cheaper option for a comparable level of management and service.


Asia Expat Finance: Calendars vs. Calculators


Expats in Asia tend to have more money than time – and this can lead to trouble for some people. In addition to all of the usual demands on your diary, in Asia we have to worry about multiple sets of holidays, time differences, flexible lengths of stay, and long lead times. All of this can mess with our sense of time and lock us into permanent “hurry up and wait” mode. Expats in big Asian business centers like Shanghai, Tokyo and Singapore are notorious for having 50 ‘#1 priorities’. Unfortunately, planning for your own family’s future tend to drop the bottom of the To Do list.

Which one of these are you?
Procrastinate until crisis. You are in perpetual fire-fighting mode, and don’t have time to deal with non-issues – like retirement, education funding and debt management. This is dangerous for those of you in your 30s and 40s because financial planning probably won’t become a real crisis until it’s already too late. That’s why it’s so easy to push off the fact-finding and decision-making till another time.

Quick decisions. Some managers want to dispatch the dreaded responsibility of financial planning so quickly that they end up rushing to make poor decisions. I often hear of expat managers who think that they’ve got their entire financial plan all sewn up – but can’t tell where their money is or what their financial situation is like. You need a system for staying on top of your own financial life.

Paralysis of indecision. Working with incomplete information or too many unknowns drives some people to distraction. Lots of well-meaning expats start the planning process but loose hope when forced to make decisions about how they will be living in 30 years.

Poorly begun is half undone. Older expats remember seeing taxis driving around at night with the headlights turned off – because the driver thought it would save money on gas. Sounds funny, doesn’t it? Expats managing their finances in Asia often make a similar mistake. They hear a rule of thumb or read an article that sticks in their mind and use that as their guiding principle for managing their financial future.

Rugged individualists. ‘I’d rather leave my money in a savings account then let some stranger muck around with it’. While the wrong advisor is definitely worse than no advisor, trying to manage your own financial planning without any outside assistance is unnecessarily difficult. There is a happy medium between blissful ignorance and micro-management. You want to be informed enough to judge the performance of your advisor, but not so engaged with tracking funds that you don’t have time to work.


Expat Property Tax for British Nationals

British Expat Property Tax
British Expat Property Tax

If you let your home whilst you are abroad, the rental profits will be liable to UK tax as UK source income regardless of your residence status. Some points to note are that:

  • property rental is treated as a business and the profit is calculated using business accounting rules;
  • expenses can be claimed against the rental income, such as repairs, maintenance, insurance, agent’s fees, wear and tear of furniture etc. A deduction can also be made for interest paid on a loan taken out to purchase the property in cases where it is beneficial to withdraw from MIRAS (note: MIRAS is abolished from 6 April 2000);
  • if allowable expenses exceed the rental income, the loss can usually only be set off against future rental income, not against your other income.

Where a property is let by a landlord who goes abroad for a period exceeding six months, a UK agent or tenant is required to withhold tax at basic rate on the net profit and pay this to the Inland Revenue on a quarterly basis. However, is it possible to make a formal request to receive the rents in full and settle the tax liability yourself through the self assessment tax return. This is achieved by completing form NRL1 and sending it to the Financial Intermediaries and Claims Office. Provided you have a satisfactory tax history, the Inland Revenue is likely to agree to your request.