Making It Financially As An Expat

Today's question concerns the financial considerations of becoming an expatriate. For expats who are moving on their own, without the support of their companies or without being officially assigned overseas, it can be especially difficult financially. Not only are you not receiving any reimbursements for the move -- in many cases you might not even have a job lined up! If you think finding a job or starting a business in your home country is hard, just imagine trying to do it overseas. So, let's address these issues here.

Reader's Comment

I've been following your blog off and on for a couple of months, as I am also considering an "expat move" in the next couple of years -- and BA is definitely on my radar, although I haven't been yet (I'm going early next year to check it out).

Your first entry suggests that you decided to move to BA even before you had a solid business plan or (permanent) place to stay. Did your business provide you with sufficient financial means to support yourself without additional income? If so, why did you need to start another business? (other than the obvious desire to engage in something productive rather than just slack). In other words, how are you getting by? By the way, how much does the 2,500 pesos/month requirement translate to USD these days?

How Much Preparation Is Needed?

Let me first clarify that I did not decide to move here without a solid business plan. I've been doing software and web development since 1997. I opened my first offshore office in India in 2001 and made a gradual transition to Argentina once I learned about the benefits the country had to offer. I started by using local web development companies here. Once I got more comfortable with the business environment, I began to hire contract workers. Only recently did I make the decision to incorporate a local company and directly invest in the country.

When I made the decision to invest, I did so with a local partner that I had worked with over the last two years and who has proven to be capable and trustworthy. Over the last couple years, I also worked on changing my business plan to one that required me to sell our services over over the Internet, through resellers, and by word of mouth. It obviously isn't practical to be moving to a foreign country if you're expected to be out on sales calls all day long.

Living On Pesos

The exchange rate as of today is 2.85 pesos per dollar -- which means the $2500 peso requirement translates to $878 dollars per month. Aside from housing, I find myself hard pressed (as a single person living alone) to spend more than $3000 pesos per month. Right now, I think it would be prudent for any foreigner to have an income of at least $2000 USD monthly, however, before considering a long-term move here. The reason being twofold -- fluctuations in the exchange rate and the very real risk of inflation. You don't want to be scraping to get by in a foreign country.

Also be aware that when it comes time to renew your visa, the authorities will examine your bank records to see whether you've made the minimum monthly transfers into your bank account here. If you haven't, you won't be given the visa renewal. So, don't take risks financially. Make sure you can afford it before making the decision to move.