W hen people move to a new home, money moves with them. When people move to a new home for their employer, leaving one country for another, moving money gets complicated, and the same can be said for everything tied to one’s finances. Establishing credit, buying or selling a home, funds transfers, pensions… it’s a lot to think about. If the employee and employer don’t do their homework before- hand, both stand to lose a lot of money. And when it comes to managing personal investments, a medium to long-term relocation to another country poses even more of a challenge. “Canadians are surprised when they go to a foreign jurisdiction and think they can leave everything intact, do what they always did with their Canadian broker,” says Georgina Tollstam, national and Toronto practice leader, Global Mobility Services, KPMG LLP. “The fact is they can’t always do that. For one thing, to take the example of moving to the U.S., their broker will need to be registered with the Securities and Exchange Commission (SEC) in order to do transactions.” Tollstam reminds her clients to consider whether they should leave Canadian investments in their Canadian portfolio or cash them in and start a portfolio in the new country. She says there are good arguments for leaving the investments in Canada as a currency hedge. The longer the assignment, the less certain the financial impact of currency fluctuations will be when the employee wants to bring that money back and has to convert it from the foreign currency back into Canadian funds. “The Canadian dollar is [currently] at 75 cents U.S.,” Tollstam says. “But if you convert to U.S. dollars and you’re away for a medium or long-term assignment, who knows where it will be when the assignment ends, and you want to convert back. You could face a major loss, even if it’s just five years later. You have to think about currency when you’re dealing with large amounts of money.” Then there is credit. Establishing a credit score is a basic first step in getting a financial footing in any new country, but because BANKING & FINANCES CAPITAL FLIGHT By Andrew Brooks While it may be getting easier, there are still many roadblocks in the way of smoothly managing and moving money between destinations 38 PERSPECTIVES Fall 2018