Home » Expat Focus Financial Update January 2024

Expat Focus Financial Update January 2024

Finland: Changes to Schengen Visa Regulations

Finland has recently increased the minimum daily amount that you will need to remain in the country under a Schengen visa, from €30 to €50. You’ll also need a sponsorship form if you’ve been invited to Finland, and if your expenses will be covered by the organisation or person who has issued the invitation. 

The Ministry of Foreign Affairs, which has introduced the new financial rules, say that the changes are in response to the increased cost of living. It’s important to note that the necessary daily amount under Schengen rules changes from country to country. In Belgium, for example, you need €45 per day, but the amount can increase if you’re staying in a hotel. 

Post-Brexit Deal With Australia Benefits UK Business

A post-Brexit trade deal settled between the UK and Australia in May 2023 is benefiting some British businesses, according to the press last month. Music tech company Audoo, which is headquartered in London, sells audio meters, which monitor music played in public venues and ensures that the artists whose music is used get their royalties. Audoo says that the relaxation of export red tape has made it easier for the company to sell their products in Australia. Overall, the new agreement is expected to increase trade between the two countries, which obviously have strong historical ties, by 53% and give a boost of over £2 million to the British economy. 

Tax Changes in Czechia

Expats resident in Czechia will be subject to a wide range of legislative changes in 2024, which could impact personal finances. Changes to VAT and other taxes are expected. Property taxes are due for a hike, and the threshold for paying the highest rate of income tax is coming down, from CZK 161,000 to CZK 131,000. Some tax exemptions will vanish (such as school fee discounts). You will also be liable, as an employee, to pay for health insurance, at a rate of 0.6%. The minimum rate for health insurance payments is rising to CZK 2,968, and there is an increase in health insurance for the self-employed. Children, however, will be under the national insurance scheme. 

If you are applying for residency here and are not a citizen of another EU state, you will also need to cover the cost of the obligatory Czech language exam yourself (currently around CZK 3000). 

The minimum wage is increasing by 9%, from CZK 17,300 to CZK 18,900. Mortgage accessibility is due to improve, and a new bank – Partners – is due to open across the country which will not use internet banking; they say they want to focus on ‘real advisory banking.’ They’re hoping to be able to offer mortgages in due course, particularly to those who find themselves sidelined by the big mortgage providers. Director Petr Borkovec told the Czech press:

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“We see the launch of the bank as entering a new financial league. We will offer our clients a perfect financial service. Thanks to licenses, data, and technology, it will connect their entire financial life in one app, which will give them full and immediate control over their finances, enable them to live a healthy financial life, and ensure the growth of their wealth.”

Thai Tax Regulations 

The allure of Thailand as a favoured retirement destination may soon lose its luster due to new tax regulations. Originally to take effect in 2024, as we highlighted in our October 2023 report, uncertainty still remains over the taxation of foreign income under these rules. The Thai press notes that older Western retirees initially sought refuge in Thailand to escape excessive bureaucracy, and the introduction of these measures may prompt them to seek alternatives elsewhere, potentially taking their financial resources with them.

A significant portion of expat pensioners do not have a tax identification number, adding to the complexity of this situation. Thailand’s reputation as an affordable and secure retirement haven has enticed a substantial number of pensioners to invest in condos and other properties throughout the nation. With an estimated 400,000 to 600,000 expats residing in Thailand, this demographic stands to be profoundly affected by these changes, potentially reshaping the landscape of the Thai property market.

As we’ve noted in the past, applying for a Golden Visa could enable you to avoid these challenges, but the visa itself is only available to people who can prove an annual income of USD$80,000 or who make substantial investments in the country. 

Portugal: Tax Changes

In late November of last year, despite the chaos caused by the sudden resignation of its Prime Minister, the Portuguese government successfully passed a series of anticipated amendments to its tax system for Non-Habitual Residents (NHRs). This move triggered a rush of North Americans to relocate to Portugal before these tax changes. It’s worth noting that the new legislation includes an amendment concerning a transitional period for expats who made the move in 2023.

According to Bloomberg, many expats consider this scramble well worth it, as the Non-Habitual Resident tax system allows individuals relocating to Portugal to pay a fixed 20% tax rate on income and a 10% levy on pensions for a duration of ten years. This is significantly lower than the progressive tax rates applied to local residents, where those with annual incomes exceeding approximately €79,000 are subject to a 48% tax rate.

Portugal continues to be a favoured destination for British retirees, with more than 200,000 Brits residing in the country under D7 or Golden visas. Portugal ranks at the top of the list of preferred EU destinations, alongside Spain, Bulgaria, Malta, and Cyprus. The UK’s Office for National Statistics reports a growing number of Brits choosing Portugal for retirement, while the Department for Work and Pensions has disclosed that over a million (1,152,585) British pensioners now reside abroad while receiving a UK state pension.