An expatriate is a person temporarily or permanently residing in a country other than that of the
person's upbringing.
The word comes from the Latin terms ex and patria.
In common usage, the term is often used in the context of professionals or skilled workers
sent abroad by their companies, rather than for all 'immigrants' or 'migrant workers'.
The differentiation found in common usage usually comes down to socio-economic factors,
so skilled professionals working in another country are described as expatriates, whereas
a manual labourer who has moved to another country to earn more money might be labelled
an 'immigrant' or 'migrant worker'.
There is no set definition and usage varies with context, for example the same person
may be seen as an "expatriate" by their home country and a "migrant worker" where they
work.
Retirement abroad, in contrast, usually makes one an "expatriate".
Background In the 19th century and early 20th century,
many Americans, numbering perhaps in the thousands, were drawn to European cultural centers, especially
Munich and Paris.
The author Henry James, for instance, adopted England as his home while Ernest Hemingway
lived in Paris.
The term 'expatriate' in some countries also has a legal context used for tax purposes.
An expatriate living in a country can receive a favourable tax treatment.
In this context a person can only be an expatriate if they move to a country other than their
own to work with the intent of returning to their home country within a certain period.
The number of years can vary per tax jurisdiction, but 5 years is the most commonly used maximum
period.
If you are not affected by taxes 3 years is normally the maximum time spent in one country.
"Expatriation" may sometimes be used to mean exile or denaturalization or renunciation
of allegiance.
The U.S. Expatriation Act of 1868 said in its preamble, 'the right of expatriation is
a natural and inherent right of all people, indispensable to the enjoyment of the rights
of life, liberty and the pursuit of happiness.'
Early Nazi Germany deprived many opponents of their citizenship, such as Albert Einstein,
Oskar Maria Graf, Willy Brandt and Thomas Mann, often expatriating entire families.
Trends in expatriation During the latter half of the 20th century,
expatriation was dominated by professionals sent by their employers to foreign subsidiaries
or headquarters.
Starting at the end of the 20th century globalization created a global market for skilled professionals
and leveled the income of skilled professionals relative to cost of living while the income
differences of the unskilled remained large.
The cost of intercontinental travel had become sufficiently low such that larger employers
not finding the skill in a local market could effectively turn to recruitment on a global
scale.
This has created a different type of expatriate where commuter and short-term assignments
are becoming more common and often used by organizations to supplement traditional expatriation.
Private motivation is becoming more relevant than company assignments.
Families might often stay behind when work opportunities amount to months instead of
years.
The cultural impact of this trend is more significant.
Traditional corporate expatriates did not integrate and commonly only associated with
the elite of the country they were living in.
Modern expatriates form a global middle class with shared work experiences in a multi-national
corporation and working and living the global financial and economical centers.
Integration is incomplete but strong cultural influences are transmitted.
Middle class expatriates contain many re-migrants from emigration movements one or two generations
earlier.
Where the initiative for expatriation does not come from employers but originates from
individuals, management researchers describe this as self-initiated expatriation.
There are also expatriate executives that are appointed by local companies in distant
countries rather than being posted there by foreign multinational corporations.
Some Asian companies, for example, have recently hired a number of Western managers.
These executives can also be viewed as self-initiated expatriates.
The continuing shift in expatriates has often been difficult to measure and available figures
often include economic migrants.
According to UN statistics, more than 232 million people, that is 3.2% of the world
population, live outside of their home country in 2013.
In terms of influx of expatriates, among the most popular expatriate destinations are for
several years Germany, Belgium, France, Spain and Russia in Europe, Canada and the USA in
North America, the UAE and Saudi Arabia, Singapore and Hong Kong in Asia, Australia and New Zealand,
as well as South Africa which is the most popular expat destination in Africa and among
the top five countries for raising children.
In Dubai the population is predominantly expatriates, from countries such as India, Pakistan, Bangladesh
and the Philippines, with only 20% of the population made up of citizens.
Singapore as well has a large number of expatriates and almost 40% of the inhabitants of this
metropolitan city are foreign-born workers or students.
Expatriates generally qualify for and enjoy access to a wide range of financial advantages,
ranging from a wide variety of financial products, investing offshore or tax benefits either
in their home country or the place of residence.
Europeans living abroad In terms of outbound expatriation, in 2009
the United Kingdom had the most expatriates among developed OECD countries with more than
three million British living abroad, followed by Germany and Italy.
On an annual basis, emigration from Britain has stood at about 400,000 per year for the
past 10 years.
Expatriates from the UK have the advantage of being able to convert their existing pension
scheme into a Qualifying Recognised Overseas Pension Scheme, often providing tax advantages
in other countries with lower tax rates.
U.S. citizens living abroad During the Vietnam War about 100,000 American
men went abroad to avoid the draft, 90% of them going to Canada.
In May 2013, the State Department estimated that there are currently 7.6 million Americans
living outside the United States.
The US is the only industrialized country to tax citizens on income earned while living
abroad, as evident in the listing under International taxation, even when those citizens are taxed
by their countries of residence, though US citizens are allowed to exclude their first
$97,600 of their earned income, but not of pensions and other sources of income.
Additionally, a new 2010 US law known as FATCA requires financial institutions to report
information on US expatriates who have over $50,000 during the year.
US expatriates must file an FBAR with the Treasury by June and note on their Form1040
to the IRS to report any foreign bank accounts if the aggregate value of all foreign financial
accounts exceeded $10,000 at any time during the calendar year to be reported, with heavy
fines for noncompliance.
American expatriates have also frequently been denied service at banks and other institutions
in their countries of residence, as the US government requires other nations to abide
by its banking and financial laws when dealing with its citizens.
As a result, hundreds of US expatriates renounce their US citizenship every year.
Human resource management of expatriate employees The need to develop global leadership and
the growth of new business ventures abroad has prompted a massive rise in global mobility.
The salary of internationally assigned personnel often consists of standard salary and monetary
benefits such as cost of living and/or hardship allowances supported by non-monetary incentives.
Some companies will completely cover the cost of expatriate children's education, even at
relatively expensive international schools, while other, usually smaller companies, encourage
families to find local schooling options.
Given that one of the primary reasons for early repatriation is attributed to a spouse
or other family member’s inability to adjust, international corporations often have a company-wide
policy and coaching system that includes spouses at an earlier stage in the decision-making
process.
Not many companies provide any compensation for loss of income of expatriate spouses,
although they often do provide other benefits and assistance.
The level of support differs, ranging from offering a job-hunting course for spouses
at the new location to full service partner support structures, run by volunteering spouses
supported by the organization.
An example of an expatriate-led project can be found in the Gracia Arts Project of Barcelona.
There are several advantages and disadvantages of using expatriate employees to staff international
company subsidiaries.
Advantages include, permitting closer control and coordination of international subsidiaries
and providing a broader global perspective.
Disadvantages include high transfer costs, the possibility of encountering local government
restrictions, and possibly creating a problem of adaptability to foreign environments.
HR departments often use services of relocation companies, who assist expats in moving abroad
as well as managing expats' related administrative issues such as: assignment management, financial
management and reporting to name a few.
Expatriate Archive Centre The Expatriate Archive Centre in The Hague
has a unique collection of letters, diaries, photographs and films documenting the social
history of expatriate life.
It collects journals, letters, diaries and photographs – in fact, almost any document
from the past detailing the lives and experiences of people working and living away from their
home country.
The Expatriate Archive’s purpose is to collect, preserve, promote, and make available to the
public and researchers a collection of primary source materials documenting the social history
of expatriate life.
It aims to give a voice to the memories and experiences of expatriates of all nationalities
from all over the world, and to establish a research resource for historians worldwide.
Expat Explorer Survey Expat Explorer is the global survey of expats,
undertaken by HSBC and conducted by third party research company YouGov.
5,339 expats were questioned through an online survey.
The report covers three key aspects of expatriate life:
1.
Expat Economics Expat Economics focuses on how the economic
situation differs for expats from country to country.
Expat Economics Overall