Why So Many Expats Get Their Finances Wrong and How You Can Avoid It: Expert Tips for Safe Financial Planning Abroad

Published on December 10, 2025

By: Tuhin Sarkar

Relocating abroad offers a world of opportunities, but many expatriates unknowingly make costly financial mistakes. With an increasing number of remote workers now living in different countries, it’s crucial to get your finances right. These errors can lead to double taxation, fines, and complicated legal issues that are often preventable. Carl Turner, a tax advisor at Expat Tax Thailand, shares five common mistakes expats make when managing their finances abroad. His expert advice can help ensure that you avoid financial pitfalls, protect your wealth, and make the most of your time living overseas. Let’s explore the five financial mistakes expats must avoid and how to fix them.

Understand Tax Residency Rules to Avoid Expensive Errors

When living abroad, many expats assume their tax obligations are limited to their home country. However, tax residency rules vary across nations and are often determined by how many days you spend in a country. For example, if you stay 180 days or more in a particular country, you might become a tax resident there. This means you could owe taxes on your worldwide income, potentially incurring penalties if you don’t file your taxes correctly. To avoid this costly mistake, research the tax residency rules in both your home country and your new country of residence before you move. Always consult a tax advisor to understand your tax status and keep detailed travel records.

Avoid Double Taxation with Proper Planning

One of the most concerning financial risks for expats is double taxation. Without the right strategy, you may find yourself paying taxes twice—once in your home country and again in the country where you now live. While some countries have tax treaties to prevent double taxation, not all countries have these agreements, and some income types may not be covered by treaties. Freelancers or remote workers are particularly vulnerable, as their income could be taxed both where they reside and where their work originates. To avoid double taxation, check if there’s a tax treaty between your home country and your new country. Make sure you understand the foreign tax credits or exemptions available to you and structure your income accordingly.

Don’t Assume Tax Exemptions Automatically Apply

Many expats believe that living abroad automatically qualifies them for tax exemptions. However, exemptions are not as simple as they seem. In most cases, you’ll need to meet specific requirements—such as spending a minimum time abroad or earning specific types of income—to qualify. Simply assuming you qualify for an exemption could lead to unexpected tax bills. It’s essential to verify your eligibility and file the necessary paperwork to claim tax credits. Keeping proper documentation and consulting a tax advisor ensures that you comply with both countries’ tax laws and avoid any unexpected surprises when it’s time to file your return.

Register for a Tax Identification Number (TIN) Early

In many countries, you need a local Tax Identification Number (TIN) to access basic services, such as opening a bank account, renting property, or setting up utilities. Unfortunately, many expats delay registering for their TIN, thinking it’s an optional step. However, failing to register can cause major complications, such as delays in opening essential accounts or fines for not being properly registered. Register for your TIN as soon as you establish residency in your new country. This simple step can save you time and trouble in the long run. The process is usually straightforward, requiring only a few key documents.

Create a Succession Plan to Protect Your Assets

A major mistake expats often overlook is the need for a succession plan. Inheritance laws differ across countries, and without proper planning, your assets may be locked up in legal disputes or face excessive taxes. This can lead to a lengthy and costly process for your family when you’re no longer around. Setting up a will or trust that complies with both your home country’s and your new country’s laws is essential. Review your succession plan regularly and update it as laws change. By taking these proactive steps, you can ensure your assets are passed on smoothly and without unnecessary legal entanglements.

Financial mistakes can have a significant impact on your expat experience. By understanding tax residency rules, avoiding double taxation, correctly applying for exemptions, registering for a TIN, and creating a solid succession plan, you can protect your wealth and avoid costly penalties. Carl Turner’s advice highlights the importance of comprehensive tax planning, going beyond mere tax compliance to secure your long-term financial wellbeing. If you’re planning to live abroad, seek professional advice early to avoid costly financial missteps and make your expat life as stress-free as possible.