According to a new report from Knight Frank, a global property agent based in England, finding the right school is the biggest challenge for relocating families, whether they are moving around the world or only 100 miles away. The kids are leaving their friends and extended family behind, and no matter how excited they are about the move, they are still facing some very challenging hurdles: fitting in and making new friends while doing well in their new school. Read More
Category: U.S. Relocation
Corporate relocations entail more than a new job position. The list of items that come into play for any relocation is long, but at the top is usually finding a new place to call home.
Most corporate relocation packages include some type of home finding assistance. The benefit can vary considerably, from a lump sum to a full-service, escorted area orientation, depending on the company and sometimes the employee’s position.
Regardless of the scope of the program, the goal of TRC Global Mobility is to make the relocation as stress-free as possible and provide expert, professional advice throughout the process. Read More
You’re still processing the fact that your company is moving its headquarters to another city….along with you and possibly your partner, children, and pets!
Many corporations look to corporate relocation companies like TRC Global Mobility to smooth the transition for its employees. But there are still things to think about outside of the services that your relocation company offers. And those considerations can grow exponentially with the size of your family. You may still have to oversee the movers, transfer bank accounts and utilities and even more importantly—take care of your family. They’re feeling the stress of moving as much or more than you are.
It’s time to make a list. Use the following relocation checklist that we have put together, based on our knowledge of the relocation process and feedback we have received over the years from the employees we have relocated. Read More
Relocation stress is real, even if you are headed to your dream job. After all, your whole life is being turned upside down.
According to experts, the stress can be mild or severe, and could include aches in the back, head or stomach, high blood pressure, or increased susceptibility to infection or disease. Some people become irritable or impatient, while others are moody or depressed, and could be experiencing nightmares, bouts of crying or panic attacks. Read More
Even though you know this is the right move, it won’t come without some stress. You need to find a new place to call home, learn how to navigate a different town, master your job, build a support network, and if you have a family, find schools for your kids and perhaps a job for your spouse or partner. Read More
Looking to relocate? Then head to Raleigh, N.C., and avoid Atlantic City, N.J., at all costs!
At least that’s what Forbes magazine is saying. Annually, Forbes crunches the numbers on 200 metro areas to determine the best and worse business climates. In June, U.S. employers added 288,000 jobs according to the Bureau of Labor Statistics, and the unemployment rates fell to 6.1 percent, the lowest it has been since 2008. Although the overall numbers are looking good that does not mean every area of the country is experiencing gains. Read More
“How are the schools?” is one of the first questions relocating employees consider, and one we at TRC face daily. It is why we are interested in the Common Core – new academic standards in English language arts and math that 44 states and the District of Columbia are implementing. And although the debate is still raging about whether Common Core is good or bad, one aspect that has gotten little attention is its potential impact for people on the move.
An average American moves more than 10 times during his lifetime, which means that many people are moving with their children, and those children are changing schools. The hope is that with the Common Core Standards, the inconsistencies between school systems and states will not be as glaring as they were pre-Common Core. Read More
Some call them millennials. Others, generation Y. No matter what you call them, those born between 1980 and early 2000 will soon be the biggest group in workforce, which means we need to start paying attention to their likes, dislikes and what it means to our businesses. Rather than criticize, now is the time to start listening.
Still not convinced? It is estimated that by 2020, a mere six years from now, millennials will compose almost 50 percent of the workforce. Some reports peg them at 80 million strong, a bigger force than the 76 million baby boomers born between 1946 and 1964. Companies have to start paying attention to how this generation thinks. Read More
Why Domestic Pre-Decision Programs are Crucial for Your Business
by Jerry Funaro, CRP, GMS
Vice President, Global Marketing, TRC Global Mobility, Inc.
A recent history of domestic pre-decision programs
Pre-decision planning has been around for a long time, at least on the international side. For domestic relocations, most employers left it up to the employee and his or her family to determine whether or not the move was a good idea. The employee and family had to consider:
- home sale and purchase ramifications
- cost-of-living changes
- whether the spouse or partner will be able to find employment in the new location
- children’s education
- healthcare availability
- neighborhood navigation
- the employee’s and family’s readiness and suitability for relocation
The results of this hands-off approach were not surprising: many relocations either never got off the ground or failed, resulting in job dissatisfaction, attrition, family issues and wasted business opportunities. The Great Recession and an uncertain U.S. real estate market further aggravated the situation, spurring more employers to extend pre-decision services for domestic relocations as well.
Prior to a domestic move offer, a pre-decision program provides an employee with services ranging from in-depth needs counseling, broker market analyses (BMA) or appraisals to establish the value of the departure home, destination mortgage pre-approval and a pre-decision trip.
The times they are a-changin’
Today, many U.S. employers have recognized that successful relocation depends on more than an employee’s technical competence. In fact, Worldwide ERC® data show that more than half of U.S. employers currently provide at least some level of pre-decision assistance. These employers are taking a more holistic approach; employees and employers are more likely to have frank discussions regarding the costs and expectations of a proposed relocation.
Benefits of pre-decision programs
As the name indicates, the pre-decision program occurs before a firm relocation offer is made. Properly managed, it allows the employer and employee alike to estimate the costs and other impacts of the move and for each side to decide if it makes good business sense. In addition, a well-structured pre-decision program can help companies to:
- manage talent more effectively
- identify candidates who are unwilling or financially unable to move
- reduce the risk of failed relocations
- increase acceptance rates
- assess the financial impact of the relocation and budget
- reduce the number of policy exceptions
- speed cycle times due to more realistic departure home pricing
Pre-decision programs can also help prospective transferees to:
- determine whether the transfer makes career and economic sense
- gain a more complete understanding of the financial impact of the move
- become more comfortable with, and invested in, their decision
- pinpoint a realistic market value and asking price for the departure home
- avoid unpleasant surprises
Potential pitfalls of pre-decision programs
Pre-decision programs have a few potential disadvantages: They add another layer of administrative process that can delay the start of an assignment. Some employees may find the process intrusive. Pre-decision programs can also bring extra costs, including charges for third-party pre-decision counseling services and additional services offered to meet uncovered needs. And if the typical BMA home valuation approach is used, your company (or your relocation management company) will need a pool of qualified and willing real estate agents, who may or may not charge for the service.
In part 2 of this blog, we’ll go into more detail about the pre-decision planning process, including an initial needs assessment and real estate considerations.
Since 1987, TRC has delivered creative, cost-effective relocation and international assignment services across the United States and in more than 150 other countries around the world. TRC partners with its clients to develop competitive, best-practice relocation programs, drawing from a comprehensive range of relocation services including U.S. home selling, home finding and consulting services and complete international relocation services. TRC’s client base represents a wide variety of products and services and ranges from startup firms to Global 1000 companies.
Foreign Account Tax Compliance Act (FATCA) Drives Record Numbers of Americans to Renounce Their Citizenship
By Josh Barro
A record number of Americans are giving up their U.S. citizenship. The Wall Street Journal reports that 1,130 Americans renounced their citizenship in the second quarter of 2013, more than did so in all of 2012. To my surprise, the list of new ex-Americans is publicly available; I didn’t recognize any of the names on a quick scan. According to the Journal, the surge in expatriations seems to be driven by the upcoming implementation of the Foreign Account Tax Compliance Act (FATCA), a 2010 law that forces foreign financial institutions to disclose more information to the IRS about Americans’ accounts and investments. Starting in 2014, foreign financial institutions will have to tell the IRS about income accruing to American clients (or businesses owned by Americans), and they’ll have to withhold American income tax as appropriate. In other words, it’s going to become a lot harder to hide your income with a Swiss bank account.
The IRS can’t directly tell foreign banks what data to turn over. But it has a pretty big stick—it can impose a 30 percent withholding tax on payments from the U.S. to foreign financial institutions unless they cooperate. As a result, many foreign banks and foreign countries have been entering into agreements with the IRS to comply with FATCA. If you’re an American living in the U.S. and your strategy for hiding income abroad isn’t working anymore, you may have few options but to pay up. But if you live abroad, you have another choice available: Renounce your U.S. citizenship so you’re not liable for American income tax. That’s one driver of the surge in renunciations. Another likely factor is the increase in capital gains and income tax rates in 2013, meaning that wealthy American expatriates can get a bigger tax saving by renouncing citizenship than they used to. But a third factor is that FATCA creates compliance headaches apart from the actual tax bills it leads to. As the WSJ describes:
- Some U.S. citizens say they are exasperated by a growing raft of paperwork that forces U.S. citizens living abroad to declare the minutiae of their financial holdings and other assets. That has increased the attraction of becoming a citizen in places such as Hong Kong, where the individual tax rate is capped at 15%.
- “My decision was less about the actual amount of taxes I had to pay, and more about the system,” said one investment banker, who renounced his U.S. citizenship and is now a Hong Kong citizen. “I’m not an ultrawealthy dude. It was the hassle with all the paperwork.”
A few months ago, I attended a dinner where I sat between two Americans living abroad who complained that FATCA has made foreign banks less willing to provide American expatriates with checking accounts, credit cards and mortgages. This has been a major point of complaint for organizations representing American expatriates. FATCA also complicates matters for foreign businesses with American investors (and for Americans who want to invest in foreign businesses) since American ownership makes a business subject to FATCA reporting.
If you intend to move back to the U.S., you’re probably not going to renounce your citizenship because it was hard to get a checking account, or even because you had to forego an investment opportunity. But if you’re a dual citizen with weak ties to the U.S. and the law is materially interfering with your financial dealings, it might be a reason to go ahead and quit being an American. Marie Sapirie, the legal editor at Tax Notes, even says the IRS proposed renouncing citizenship as an option for an American with a complicated tax situation who had long resided abroad. Last fall, I attended an American Swiss Foundation trip to Switzerland and FATCA was the number one hobby horse for the Swiss participants. The difficulty in evaluating the Swiss complaints is that the Swiss have a combination of good and bad reasons for hating FATCA. The law creates compliance burdens for Americans living in Switzerland and Swiss who do legitimate business with Americans. But it also undermines tax evasion strategies that are the key reason that some Americans were interested in banking in Switzerland in the first place.
Of course, every law has compliance costs, and it’s not even clear that it’s such a big problem if more Americans, presumably dual citizens living abroad with relatively weak ties to the U.S., are renouncing citizenship. But the benefits of FATCA may also be relatively modest: It’s expected to raise $7.6 billion in added taxes over 10 years. In 1999, the State Department estimated that there are between 3 and 6 million Americans living abroad; if those numbers are similar today, that means FATCA will generate about $170 in extra annual taxes per expatriate. The revenue estimate for FATCA may prove incorrect in either direction; it’s based on a guess about how much unreported foreign income will be discovered when the new reporting and withholding requirements come into effect. As the law is implemented next year, we’ll start to see how much revenue actually rolls in—and whether the law is worth the compliance costs and expatriations that it causes.