Moving to a new country means tying up loose ends when it comes to your finances. This piece will tell you some of the important steps you need to take before you move. Do these and move with peace of mind.
a) Consolidate your accounts
Chances are, you have more than one Indian bank account. When you move to the U.S., you need to convert your existing bank account into an NRO or NRE account. Why? Once you move to the U.S., you can't have an Indian bank account in your name, according to the Foreign Exchange Management Act (FEMA). Converting all your accounts to NRE or NRO accounts means you need to manage them from abroad, which can get challenging. So, convert one of your accounts and close the rest. The same applies to lockers as well. Retain one locker in which you need to store valuables and close the rest.
Once you move to the U.S., you can't deposit money into government and post office accounts. If you have money in those accounts, you need to transfer them and close them.
b) Decide how to manage your investments
If you are moving to the U.S. for a few years, you might want to liquidate some of your investments. Deciding how much you want to liquidate depends on your financial requirements.
As an NRI, you can open a PIS (portfolio investment scheme) account. PIS is an RBI scheme that enables NRIs to purchase and sell shares of Indian companies on a recognized stock exchange by routing the purchase or sale through their NRI savings account with a designated bank branch. This allows you to have exposure to equities even after becoming an NRI. To open a PIS account, you need to submit new KYC details that reflect your residence change.
c) Make arrangements to manage your real estate
If you have land, a flat, or a house in India, it might be hard to manage it from the U.S. Renting a flat means keeping a tab of rent and maintenance bills from afar. If you have a plot, you need someone to keep tabs on it regularly; otherwise, it is open to illegal squatters taking over. Unless you have family or friends you fully trust to help you manage your real estate, consider selling it off.
d) Take stock of your insurance
You probably have life, health, and vehicle insurance. Unless your health insurance can be used in another country, it doesn't make sense to continue paying premiums on it. You can pay the premium as a lump sum for your life insurance as you will be converting your bank account to an NRE or NRO one. As you can't take your vehicle with you, you need to make arrangements to sell it off.
e) Understand NRI tax rules
Before you move, make sure your taxes have been paid for the current financial year. The double tax avoidance agreement (DTAA) between two countries helps you avoid paying taxes in both countries. India and U.S. have a DTAA agreement, and you need to go through it in detail to understand your tax liabilities. If it gets a little overwhelming, consider taking the help of a financial expert.
Moving abroad entails putting your finances and bank accounts in place before leaving. Some processes might take longer than others, and it pays to get a head start instead of keeping things till the end.
If you're looking for a U.S. Credit Card and Bank Account, you can apply to Zolve from your home country itself. You don't need an SSN or credit score, and the sign-up process takes about 5 minutes.