Investing as an Expat

MalachiK

I'm also an expat. In my experience, most of the 'expat pension advice' and 'wealth management' companies are staffed by a bunch of wide boy chancers who will charge you extortionate fees for setting up a simple portfolio.

If Nutmeg will open an account for you then I'd just use that. For larger portfolios, HSBC offer expat services. I just use my broker account from when I was in the UK. 

Sebo027

I have been reading into investing as an expat a lot recently and I have drawn the following:

• Most, not all UK investment platforms will not allow non-tax resident UK nationals to open an account. 
• ISAs are off limits. 
• Tax liabilities for your current, and future (if known) country of tax residents should be explored. 
• Should you consider living in the UK in future, funds should have "reporting status." (Ref: https://www.ey.com/Publication/vwLUAssets/ey-uk-reporting-fund-status/%24FILE/ey-uk-reporting-fund-status.pdf )
• "Wealth Management Consultants" and claiming to be expat financial advisers should be avoided like the plague. I have been preyed upon by several in the past few years, cold calling. Fortunately I have never taken them up on their offers and I have come to realise they are typically a 20-something chaps with whitened teeth, claiming to be a financial adviser living in Dubai, previous occupation a personal trainer or youth football coach. I recently received a call from a chap based in Moscow working for DeVere group, who's opening line was along the lines of "due to all the COVID-19 upset going on, if I have a UK pension, alot of pension funds are tweaking their interest rates and it may be possible to increase your pension value by up to 20%." All I had to do was fill in a few forms and, for free, he would be able to obtain my pension valuation, where my pension is invested, and see "if there's anything he could for me."

Check out the following websites, alot of good information for expats investors:
https://andrewhallam.com/
https://www.deadsimplesaving.com/blog/tag/expats/

Mr.Saver

drcfhussain said:

Thanks for your responses.  Regarding pension, I assumed not.  Foreigners in China have very limited access to investment opportunities.  Something simple like alipay/yue'bao can only be invested in if you have a Chinese ID, and that restriction applies to quite a few things.  Due to that and other barriers, I expected it would be easier to simply transfer my savings from China to UK and invest there.  It may be possible to invest in China, but compared to UK based investment, I would have the additional cost of getting a translator (financial, trust etc.) and it makes everything much harder. 

You "expected it would be easier to simply transfer my savings from China to UK", but is it true? Invest in China is not easy for a foreigner, but have you asked any currency exchange and money transferring service provider (banks and other regulated financial institutions) how do you do this, what are the restrictions, and what is the cost? Have you found a platform that accepts non-UK residents? Are those actually easier than finding a Chinese platform accepting non-Chinese nationals?

If you do decide to invest outside mainland China, why limiting yourself to the UK? Why can't it be the US, EU, HK, JP or elsewhere in the world?

You said you "would have the additional cost of getting a translator". Is it because you can't read or write Mandarin? That would indeed make things a lot harder I'm afraid. Don't forget that you will have to deal with taxes in China, regardless who do you invest with.

colsten said:

Mr.Saver said:

colsten said:

Mr.Saver said:

ColdIron said:

Do you have any pension arrangements in place?

The Chinese social security system is different than the UK. They provide a large state pension, so most people don't need a private pension.

Do / will they pay this if you choose not to retire in China? Do they have fancy rules, like the UK do, under which you e.g. don't get any increases if you retire in a different country?

No, there's no two tiers system for pensioners who remains in China and moved overseas. Probably one of the reason is because the state pension income in China isn't taxed, and the state doesn't deduct social security contributions (such as NICs in the UK) from pension incomes either. So regardless of which country one retires to, it's the same cost for the state to provide the pension. In compression to that, pension income is taxable in the UK, therefore if one moves overseas, the state may lose the tax revenue.

I think you misunderstand how the UK state pension system works.

The UK does not deduct social security contributions (NICs) from pension incomes.

Whilst UK state pension is taxable income in the UK, it doesn't mean that anybody in receipt of UK state pension actually does pay tax. Many recipients of UK state pensions have an income of less than the UK Personal Allowance, thus do not pay UK income tax. All UK state pensions are paid gross, without any tax deduction.

The cost of the UK state pension to the UK Treasury is immaterial to the decision whether annual increases are paid to non-resident recipients of the UK state pension.

Maybe the way I said it wasn't clear. I did not suggest that pensioners in the UK need to pay NICs. Let me try to rephrase it.
Chinese state pension income is tax free, and Chinese social security contributions, like the NICs in the UK, is not deducted either.
Comparing to that, the UK pension income is taxable (but no NIC deductions). Although many UK pensioners don't need to pay income tax in the UK because their income is below the personal allowance, some people who have occupational and/or private pensions may earn more than the PA, and would need to pay the UK income tax if they live in the UK. Those who are financially better off are more likely to retire overseas, and the tax income on pensions will be lost if they ceased to be a UK tax resident. The suspending of the state pension triple-lock for non-UK residents will save the state some spendings, and this may be used to (partially) offset the lost tax income.

colsten

Mr.Saver said:

The suspending of the state pension triple-lock for non-UK residents will save the state some spendings, and this may be used to (partially) offset the lost tax income.

There is no general suspension of annual increases (whether by triple lock or other rules) for all non-UK residents. The list of countries in which you get the annual increase is published on gov.uk.

Mr.Saver

colsten said:

Mr.Saver said:

The suspending of the state pension triple-lock for non-UK residents will save the state some spendings, and this may be used to (partially) offset the lost tax income.

There is no general suspension of annual increases (whether by triple lock or other rules) for all non-UK residents. The list of countries in which you get the annual increase is published on gov.uk.

Fine, I didn't mean to go into those details. There's a lot more than just that to consider if someone plans to retire to different countries. That's not the point of the original post. The point is, China doesn't have any specific rules regarding the residential country that could affect the Chinese state pension.
Although, for the OP, please take cautious approach, and don't take my word for it. The Chinese government is well known for lack of transparency and interpreting ambiguous rules in their favour. The rule might be ambiguously written in a government file which general public don't even have access to. If you aren't going to do what everyone else is doing, it's best to seek financial and legal advise from professionals.

colsten

Mr.Saver said:

Fine, I didn't mean to go into those details. There's a lot more than just that to consider if someone plans to retire to different countries. That's not the point of the original post. The point is, China doesn't have any specific rules regarding the residential country that could affect the Chinese state pension.

I totally agree with you that there is an awful lot more to consider if someone plans to consider to retire, in/to any country.

The point is that your statements about the UK state pension were sufficiently vague/incorrect for me to question whether your statements about the Chinese state pension [about which I know nothing] would hold water. I suppose it is for the OP to work out, as neither of us has enough details about their circumstances and requirements.

Mr.Saver

colsten said:

Mr.Saver said:

Fine, I didn't mean to go into those details. There's a lot more than just that to consider if someone plans to retire to different countries. That's not the point of the original post. The point is, China doesn't have any specific rules regarding the residential country that could affect the Chinese state pension.

I totally agree with you that there is an awful lot more to consider if someone plans to consider to retire, in/to any country.

The point is that your statements about the UK state pension were sufficiently vague/incorrect for me to question whether your statements about the Chinese state pension [about which I know nothing] would hold water. I suppose it is for the OP to work out, as neither of us has enough details about their circumstances and requirements.

I'm pretty sure my statements about the Chinese state pension aren't going to be 100% correct. That's because I couldn't find any official or government website with clear rules written on them. All the things I wrote are based on information I collected from news, internet forums, social media and Q&A websites while I was drafting my posts. They serve the purpose for saving the OP's time and effort for finding and translating them from many Chinese sites. Plus, the Chinese state pension system is a complex contribution based system, the maximum state pension is linked to a large number of factors, such as the number of years in the scheme, the amount contributed by the person and their employee, the province/city where the person is worked, and whether it's in public or private sector.

For people who works most of their adult life in China, the state pension is going to be enough to live on. But if OP only works in China for a couple of decades, the state pension  alone is probably not going to be enough. The other problem is, private pension is rare in China, it may not be that easy to find a suitable one if OP needs a private pension in China.

zurpher

Sebo027 said:

I have been reading into investing as an expat a lot recently and I have drawn the following:

• Most, not all UK investment platforms will not allow non-tax resident UK nationals to open an account. 

https://andrewhallam.com/
https://www.deadsimplesaving.com/blog/tag/expats/

@Sebo027 and all: I am a British expat in Germany. I am now selling my home in the UK. It seems that it would be difficult to invest the money in the UK and I would also have to declare it to the German tax authorities. Is the most sensible option then to move the money to Germany? What other options are out there?

dfchk

Try to read "Millionaire Expat" by Andrew Hallam
Much info regarding the benefits of investing offshore as an expat.
There is a facebook group that is also very helpful - there are others in the group also based in China.
https://www.facebook.com/groups/445218675653782

The Vanguard LS are not available at most offshore brokers - Swissquote has it
https://en.swissquote.lu/international-investing/smart-investing/vanguards-lifestrategy-funds-might-be-best-choice-british

You will find many companies who will "help" you but the drag on investments from their fees is easy to avoid with a little research and diy.

bostonerimus

I'm lucky in that I left the UK for the US straight out of college and so all my investing has been done in the US. Before I left the UK I made sure that I applied to pay voluntary NI and I suggest anyone working outside the UK for a foreign employer does the same. I left a UK bank account, but after a few years of inactivity it was closed down and a cheque sent to me at my mum's address, so I've had zero financial footprint in the UK for over 20 years. But I might retire back to the UK and that would mean organizing things again. The pensions and tax efficient investments are all no worry as the US/UK tax treaty recognizes the wrappers so I'll get similar tax treatment in the UK as I would in the US. If you invest overseas it's important to understand how, and where, you'll be paying tax so the double taxation treaty treatment of pensions and things like capital gains is important. I will have to move regular investments to UK reporting funds...basically Vanguard ETFs...and keep everything except cash in the US to avoid US restrictions on US citizens investing in non-US funds. There will be some added reporting and some initially complex taxes, but no major difficulties. My US social security can even be direct deposited into a UK bank account when I open one.