Expatriate

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For other uses, see Expatriate (disambiguation).
Expatriate French voters queue in Lausanne, Switzerland for the first round of the presidential election of 2007

An expatriate (often shortened to expat) is a person temporarily or permanently residing in a country other than that of their citizenship. The word comes from the Latin terms ex ("out of") and patria ("country, fatherland").

In common usage, the term is often used in the context of professionals or skilled workers sent abroad by their companies.[1]

Background[edit]

In the 19th and early 20th centuries, 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.[citation needed]

The term "expatriate" in some countries also has a legal context used for tax purposes, meaning someone who does not have tax residence in the country they are living. An expatriate living in a country can receive a favourable tax treatment – they are still subject to taxation, but not in the same way as tax residents. For example, in Japan for the first five years of residency one is a non-permanent resident for tax purposes, and thus subject only to tax on Japan-source income, not worldwide income (such as bank interest or investment gains in one's home country). Rules and the number of years can vary per tax jurisdiction, but 5 years is the most commonly used maximum period.[citation needed]

"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.'[2] 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.[3][4]

Trends in expatriation[edit]

Global markets at the end of the 20th century 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.[5]

Where the initiative for expatriation does not come from employers but originates from individuals, management researchers describe this as self-initiated expatriation (SIE).[6] There are also expatriate executives who 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.[7][8] These executives can also be viewed as self-initiated expatriates.[9]

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.[10]

In terms of influx of expatriates, among the most popular expatriate destinations[11] are for several years Germany, Belgium, France, Spain and Russia in Europe, Canada and the USA in North America, the UAE, Qatar 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[12] and among the top five countries for raising children.[13]

In Dubai the population is predominantly composed of foreign passport holders, primarily migrants from countries such as India, Pakistan, Bangladesh and the Philippines and expatriates from the Western world, with only 20% of the population made up of citizens.[14] Singapore has a large number of expatriates as well, and almost 40% of the inhabitants of this metropolitan city are foreign-born workers, professionals or students.[15]

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.[16]

Controversy sometimes arises over why some people, particularly Westerners, are called expatriates while others are termed immigrants.[17][18]

'Expat' as a racial category[edit]

Mawuna Remarque Koutonin argues that by and large the term expat is applied to Caucasian migrants/immigrants with a Western point of origin. Persons of color are largely denied access to the label, regardless of their status or wealth "you should expect that any person going to work outside of his or her country for a period of time would be an expat, regardless of his skin colour or country. But that is not the case in reality; expat is a term reserved exclusively for western white people going to work abroad" [19]

Europeans living abroad[edit]

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.[20] On an annual basis, emigration from Britain has stood at about 400,000 per year for the past 10 years.[21] Expatriates from the UK have the advantage of being able to convert their existing pension scheme into a Qualifying Recognised Overseas Pension Scheme (QROPS), often providing tax advantages in other countries with lower tax rates.[22]

The British Mental Health Act 1983 rules that persons resident abroad do not qualify as "nearest relative" of a person who is ordinarily resident in the United Kingdom, the Channel Islands or the Isle of Man.

U.S. citizens living abroad[edit]

During the Vietnam War, about 100,000 American men went abroad to avoid the draft, 90% of them going to Canada.[23] In May 2013, the State Department estimated that there are currently 7.6 million Americans living outside the United States.[24] 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 (2013) 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[clarification needed] 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,[25] with heavy fines for noncompliance.[26] 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.[27][28]

Mexico and Canada are thought to have the largest populations of U.S. citizens living abroad, followed by Israel, the United Kingdom, France, and Germany, but Americans seem to be scattered among a larger number of countries than most other nationalities.[29]

Human resource management of expatriate employees[edit]

The need to develop global leadership and the growth of new business ventures abroad has prompted a massive rise in global mobility.[30] The salary of internationally assigned personnel often consists of standard salary and monetary benefits such as cost of living and/or hardship/Quality-of-Living allowances supported by non-monetary incentives such as health care, education expenses, and housing. 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. There are three approaches used by organizations to decide what benefits to give their expat. These approaches are destination based, balance sheet approach, or the international headquarters approach.[citation needed]

Given that one of the primary reasons for early repatriation is attributed to a spouse or other family member's inability to adjust,[31] 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.[citation needed]

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.[32]

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.[citation needed]

See also[edit]

References[edit]

  1. ^ Castree, Noel; Rob Kitchen; Alisdair Rogers. A Dictionary of Human Geography (1 ed.). Oxford University Press. ISBN 9780199599868. 
  2. ^ United States Revised Statutes, Sec. 1999.
  3. ^ Siegfried Grundmann, The Einstein Dossiers: Science and Politics—Einstein's Berlin Period, Berlin, Heidelberg, New York: Springer Verlag (2004), p. 294. Translated by Ann M. Hentschel. ISBN 3-540-25661-X. Retrieved 4 December 2011.
  4. ^ Oskar Maria Graf timeline: expatriated 1934, Kritikatur – Die Welt der Literatur. Retrieved 4 December 2011.
  5. ^ Collings, D. G.; Scullion, H.; Morley, M. J. (2007). "Changing patterns of global staffing in the multinational enterprise: Challenges to the conventional expatriate assignment and emerging alternatives". Journal of World Business 42 (2): 198. doi:10.1016/j.jwb.2007.02.005.  edit
  6. ^ Inkson, K.; Arthur, M. B.; Pringle, J.; Barry, S. (1997). "Expatriate assignment versus overseas experience: Contrasting models of international human resource development". Journal of World Business 32 (4): 351. doi:10.1016/S1090-9516(97)90017-1. 
  7. ^ "Foreign Executives in Local Organisations". FELOresearch.info. 2012. Retrieved 13 July 2012. 
  8. ^ Arp, Frithjof (2013). "Typologies: What types of foreign executives are appointed by local organisations and what types of organisations appoint them?". Zeitschrift fuer Personalforschung. German Journal of Research in Human Resource Management 27 (3): 167–194. doi:10.1688/1862-0000_ZfP_2013_03_Arp. 
  9. ^ "Self-initiated expatriates (SIEs)". FELOresearch.info. 2013. Retrieved 9 October 2013. 
  10. ^ "More people than ever living outside their home country". Daily Mail. Retrieved 14 April 2014. 
  11. ^ "Popular expatriate destinations". JustLanded.com. 2009. 
  12. ^ "Why South Africa for expats?". Living in South Africa. Retrieved 14 April 2014. 
  13. ^ "Best countries for raising children in 2013". HSBC ExpatExplorer. Retrieved 14 April 2014. [dead link]
  14. ^ "Moving To Dubai". ExpatForum.com. 2007. Retrieved 5 September 2007. 
  15. ^ "Singapore Expat Communities". InterNations. Retrieved 14 April 2014. 
  16. ^ "Why Offshore?". Gilt Edge International. 29 August 2012. Retrieved 29 August 2012. 
  17. ^ Koutonin, Mawuna Remarque (13 March 2015). "Why are white people expats when the rest of us are immigrants?". The Guardian. Retrieved 17 April 2015. 
  18. ^ "In Hong Kong, Just Who Is an Expat, Anyway? ", Christopher DeWolf, The Wall Street Journal, December 29, 2014
  19. ^ "Why are white people expats when the rest of us are immigrants?". The Guardian. 13 March 2015. Retrieved 1 May 2015. 
  20. ^ "Expatriates worldwide". JustLanded.com. 2009. 
  21. ^ "Working Abroad". whichoffshore.com. 2010. Retrieved 2 January 2010. 
  22. ^ "QROPS Pensions Explained". QROPS.net. 13 October 2010. Retrieved 20 May 2012. 
  23. ^ "President Carter pardons draft dodgers". History.com. Retrieved 31 January 2013. 
  24. ^ Hallow, Ralph Z. (January 15, 2014). "RNC to join Rand Paul's fight to protect privacy of Americans overseas". Washington Times. 
  25. ^ "Report of Foreign Bank and Financial Accounts FBAR". IRS. 4 November 2013. Retrieved 7 January 2014. 
  26. ^ Scott, Kevin (16 May 2012). "US expatriates urged to seek tax advice". The Gulf News. 
  27. ^ "Why More U.S. Expatriates Are Turning in Their Passports". Time. 20 April 2010. 
  28. ^ Knowlton, Brian (25 April 2010). "More American Expatriates Give Up Citizenship". The New York Times. 
  29. ^ Joe Costanzo, Amanda Klekowski von Koppenfels (May 17, 2013). "Counting the Uncountable: Overseas Americans". Migration Policy Institute. 
  30. ^ Klomp, F (April 2005). "Expats Everywhere". Expatriates Magazine. Paris: EP. p. 4. Archived from the original (Print) on 29 October 2013. 
  31. ^ Pilenzo, R (September 2013). "DOES CULTURE REALLY MAKE A DIFFERENCE IN EXPAT ASSIGNMENTS?". Expatriates Magazine (2): 4. 
  32. ^ Gomez-Mejia, Luis; Balkin, David; Cardy, Robert (2007). Managing Human Resources. Upper Saddle River, NJ: Pearson. pp. 544–5. ISBN 0-13-187067-X. 

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