EnterAsia Information Services

Additional Expenses

Additional Expenses
There may be a number of additional expenses linked to your overseas assignment. You need to find out about this extra burden to calculate the differences in your net income on location compared to home.

 

• Managing your present residence.

• Care for senior relatives.

• Educational/living expenses for students or boarding schools.

• Traveling expenses to visit close relatives or have them visit you.

• Increased living expenses abroad.

• Extra educational costs abroad.

• Cost of a trustee to represent you in home country.

 

Your employer may cover some of these cost but this depends entirely on your contract. Employers do generally not expect you to lose money while abroad but do not pay any more benefits in kind for everything as in the good old times. You are expected to participate reasonably, e.g. pay a proportion of the rental and taxes for benefits in kind.

 

Managing Your Present Residence

If your present residence is rented by you, then you need not to worry but merely give notice of your move as required in your lease contract. If you own a home, you may want to rent it out, keep it unoccupied or sell it. Keep in mind that you will need a home when you are repatriated. Assignments can be shorter than anticipated and you need a home when repatriating on short notice.

 

What you have to consider when you rent your home:

• Have your rented home managed by a company rather than asking friends or relatives to look after the tenant’s needs

• You need to inform your mortgage bank

• Assess your tax situation

• You may need to employ a gardener

 

Living Expenses Abroad

Many expatriates worry that they may not afford to live in Southeast Asia as they assume that their favorite products will be much more expensive. There are various ways to find out about the living costs. Expatriate Contracts take the differences into consideration by paying COLA (Cost of Living Allowance) and the balance will be generally to your favor if you buy local rather than imported products. Basic local food is cheaper and you will be able to enjoy eating out locally for a fraction of what you pay at home. 

 

However, many Asian countries impose heavy import duties on alcohol and luxury goods and you may be forced to cut down on your daily beer consumption! Care also has to be taken when you negotiate your housing allowance and we advise you to countercheck information by asking expatriates on location and contact local estate agents.

 

Food

• Buy in supermarkets and specialized shops where you can often find your favorite food from home or order food from home. Prices in these shops tend to be higher than at home with exported food at a premium.

• While food and beverages are much less expensive in local shops and wet markets where the locals buy standards of food presentation, preparation and implementation of hygienic laws differ widely in these local places. Be cautious about purchasing easily perishable goods in local shops and wet markets.

 

Housing

• Houses and apartments offered to expatriates are generally well equipped.

• Expatriate housing is invariably high priced compared to the rents paid by the locals. Companies generally take this into account when they fix your housing allowance.

• Inquire about taxation of your housing allowance and additional costs involved like your electricity bill. With the air-condition running most of the time in the tropics your bill can be startlingly high.

 

Transport and Security
In many Asian countries a car is a must as public transportation may not be suitable for foreigners. Safety and security are paramount. In some countries, foreigners should not even drive by themselves. The provision of a car and a driver may be necessary and
advisable.

 

Education
In many cases, expatriates see the reimbursement of expenses of an international school for their children as a major advantage of being posted abroad. There are indeed a lot of very good schools in Asia and many are very experienced in dealing with expatriate children and their specific problems.

 

As public schools at home usually come free, companies accept their responsibility of ensuring a reasonable education and easy repatriation of your children and therefore take on the expenses.

 

You will usually not be reimbursed for the school uniform, optional or compulsory school trips, insurance and meals. Tuition fees for ESL (English as a Second Language) and others for a smooth transition both ways may occur.

 

If you have to leave a child in boarding school or need to support a student you have to fill in your Balance Sheet appropriately with the full boarding fees/living costs plus visiting round trips each year for family reunions.

 

 

 

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