An American Expat in Brazil: Part 2 of 3
By Tony Quintero, Director, Accounting Services
In my last post, I discussed my current position as an expatriate Radius employee in Sao Paulo, Brazil, where my company recently opened a corporate office. This three-part blog series is intended to help others plan for their own expat assignments. In this post, I’ll address some important factors to consider and steps to take prior to going on an assignment. Remember, if you’re taking a spouse and/or children, you’ll need to consider visas, health insurance and other factors discussed here for them as well as for yourself.
Fulfill Immigration Requirements
In some countries — like Colombia, for example — a U.S. passport is sufficient for entering the country. In others, like Argentina and Chile, a U.S. traveler must obtain a visa upon arrival in-country. Brazil is a little more complicated. A U.S. citizen who is seeking to obtain a Brazil business visa must submit a completed application, a flight itinerary and other documentation to the appropriate Brazil Consulate before arriving in Brazil. And there are restrictions attached. A Brazil business visa can be granted for up to 10 years with the opportunity to remain in country for up to 90 days and is renewable for up to an additional 90 days, giving the business traveler a total of 180 days to work in-country in any 12-month period, counted from the day of first entry in Brazil. However, the expat can’t stay in Brazil for more than 90 days each time he or she goes. You should also note that if you’re bringing family members, they may only stay in Brazil for 90 days on a tourist visa.
The bottom line is, each country has its own immigration requirements and it’s wise to research and fulfill these well before you travel. If you don’t fulfill visa requirements, you can subject you and your employer to fines and, in extreme cases, you may expose yourself to imprisonment.
Know Your Host-Country Tax Obligations
You (and your employer) should never assume you’re free from host-country income and social tax obligations if you remain on a U.S. (or any other home country’s) payroll. This is a common misconception. In some cases, expat or third-country nationals (TCNs) will not have to remit taxes to local authorities if they are in-country for less than 183 days in a year. But that’s just a rule of thumb, and many countries have much shorter windows, not to mention other factors (such as the nature of the work) that may determine taxability. In Brazil, the limit for triggering tax residency is 180 days.
Income and social tax guidelines will be defined either in a tax treaty between the countries involved or in the host-country’s own tax laws. There are ways to remain on your original home-country payroll while fulfilling local requirements (such as implementing a “shadow” payroll in the host country) and ways for employers to compensate their expat employees for tax losses associated with an assignment (such as tax equalization). All of these factors related to local income and social tax obligations should be considered well before your plane tickets are booked.
Work with Your HR and Finance Team about Insurance and Expenses
Talk with representatives from your HR office about the portability of your health insurance to the new country. You’ll also want to call your insurance carriers directly to describe the situation, including any steps you’ll need to take in the event that you need care or to fill prescriptions. You and/or your HR team should also perform research on your prospective office and housing locations to determine the nearest hospital or other medical facility and whether your insurance will cover care there. In some cases, you may have to apply for medical reimbursement after the fact, which you should also discuss with your HR office.
Speaking of expenses, you’ll want to talk with your HR and finance offices about a strategy for obtaining expense reimbursements. Whichever method you choose — requesting reimbursement by individual expense item, by per diem or some combination — you’ll want to ensure you and your company are compliant with home- and host-country accountable plan laws. Finally, it’s a good idea to check with your corporate card provider to ensure that your credit card will be widely accepted in the host country. In some countries outside the U.S., merchants will not accept credit cards that aren’t equipped with microchips.
Research Housing Options
I was fortunate in my expat assignment, not only because I love Brazil, but because I have friends in Sao Paulo who were kind enough to guide me during the process of finding appropriate housing. You can learn a lot from a map — such as the proximity to your office, hospitals, bus stops and train stations — but a map doesn’t tell you how safe a particular neighborhood is, nor its demographics.
If you accept an expat assignment, you likely won’t have knowledgeable friends in the host country like I did to provide guidance, so be sure to conduct research over the internet, including the use of such websites as the U.S. Department of State Countries page and the CIA’s World Fact Book page, along with other sites and offices (such as embassies) with information specific to your location. You should also keep your eye out for possible seminars on the topic of global mobility. Not long before leaving for Brazil, I was asked to be part of a panel discussing expat assignments. I learned a lot from the experience, not only from presenting and attending presentations, but from the more informal discussions in between and after sessions.
Get Your Vaccinations
Check with your doctor about getting any required vaccinations prior to travel, some of which may be required and others recommended. Your doctor may also give you a prescription for certain medicines in the event that you become ill during your stay. You should also consult the Center for Disease Control’s Destinations page for detailed country-specific information. In my final post of this series, I’ll discuss some things I’ve learned since coming to Brazil to further help you prepare for your own expat assignment.
For more on this topic, listen to this recent webinar: Expat Planning: What to Know When Sending Key Talent Overseas.
For information on how Radius can help you plan for an expat assignment and tackle other global mobility challenges, contact us.