An
expatriate (in abbreviated form, expat) is a person
temporarily or permanently
residing in a country and culture other than that of the person's
upbringing. The word comes from the
Latin terms
ex ("out of") and
patria ("country, fatherland").
Background
In its broadest sense, an expatriate is any person living in a
different country from where he is a citizen. In common usage, the term
is often used in the context of professionals sent abroad by their
companies, as opposed to locally hired staff. 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'. There is no set definition and
usage does vary depending on context and individual preferences and
prejudices. 'Expatriation' has also been used in a legal sense to mean '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.'[1]
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.[clarification
needed]
During the Nazi era, the German government deprived many left-wing
and intellectual opponents of citizenship through expatriation, such as
Albert Einstein,
Oskar Maria Graf,
Willy Brandt and
Thomas Mann, often expatriating entire families.[2][3]
Trends in
expatriation
During the later 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 employers not finding the skill in a local
market could effectively turn to recruitment on a global scale.[citation
needed]
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.[4]
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 (SIE).[5]
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.[6]
These executives can also be viewed as self-initiated expatriates.
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.[7]
The continuing shift in expatriates has often been difficult to
measure. According to UN statistics, more than 200 million people would
be living outside of their home country in 2010.[citation
needed] However, this number also includes economic
migrants.
In terms of outbound expatriation, as of 2009, the
United Kingdom had the highest number of expatriates among
OECD countries with more than three million British living abroad,
followed by
Germany
and Italy.[8]
On an annual basis, emigration from Britain has stood at about 400,000
per year for the past 10 years.[9]
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.[10]
Expatriates qualify for and enjoy access to a wide range of financial
products,
investing offshore in products not restricted by the financial
services or tax regulations in their home country or the place where
they live now.[11]
In terms of influx of expatriates, the most popular expatriate
destinations are currently
Spain,
followed by Germany and Britain.[12]
The Expat Directory is currently collating information on expatriate
movements to provide a statistical overview of expatriate origin and
destination countries. Current statistics show that the majority of
expatriates originate from the United States. The questionnaire aims to
provide further information or key destinations and the length of time
that expatriates spend overseas. The survey will remain open ended with
monthly snapshots collated from March 2010.[13]
There are currently an estimated 5.2 million Americans living outside
the
United States. The US is the only industrialized country to tax
citizens on income earned abroad, even when taxed by their countries of
residence, though they are allowed to exclude their first $91,400.
Additionally, US law requires expatriates to report any foreign bank
accounts exceeding $10,000, 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.[14][15]
Human resource management of expatriate employees
The salary of internationally assigned personnel customarily often
consists of standard salary and monetary benefits such as cost of living
and/or hardship allowances (COLA) supported by non-monetary incentives
i.e. housing and education. 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.
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.[16]
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.[17]
HR departments often use services of
relocation companies, who assist expats in moving abroad as well as
managing expat's 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 (Netherlands)
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 (2012)
Expat Explorer is the global survey of expats, undertaken by
HSBC Expat
and conducted by third party research company YouGov. 5,339 expats were
questioned through an online survey.[18]
The report covers three key aspects of expat life:
1. Expat Economics
Expat Economics focuses on how the economic situation differs for
expats from country to country. Expat Economics Overall (includes;
Wealth Hotspot, Income, Disposable Income, and Luxuries)
[19]