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An expatriate, often shortened to expat, is an individual living and/or working in a country other than their country of citizenship, often temporarily and for work reasons. In a financial context, this could relate to how they manage income, taxes, and investments across different countries. Expatriates may also benefit from specific financial packages and benefits from their employer, designed to offset costs of living abroad.


The phonetics for the word “Expatriate” is: /ɪkˈspætriət/

Key Takeaways

The concept of an expatriate or ‘expat’ can be quite broad, but in general, it refers to a person who has chosen to live outside their native country. Here are three main takeaways you need to know about expatriates:

  1. Living Abroad: The most significant fact about being an expat is that you live outside the country of your birth. This could be for reasons such as work, study, retirement, or a desire to experience a different culture.
  2. Cultural Adaptation: Expatriates must adapt to the culture, lifestyle, and sometimes the language of their new home. This can present both challenges and exciting opportunities for personal growth and self-discovery.
  3. Potential for Economic Benefit: Many expats may have the potential to earn more when living abroad when compared to living in their home country. This is not always the case, as it largely depends on the job market and economic conditions of both their home country and their host country.


The business/finance term “expatriate” is important as it refers to an individual who resides and works in a country different from their native country. This is particularly significant in the international business landscape, where companies often send employees to work in foreign subsidiaries or branches. These expatriates can bring diverse skill sets, cultural insight, and unique perspectives to their tasks, subsequently helping businesses to enhance their operations and expand their presence in global markets. Additionally, expatriate assignments can be instrumental in employee development, providing opportunities for high-potential employees to gain international exposure and develop global leadership skills. However, managing expatriates also poses certain challenges for businesses, such as costs associated with relocation and compliance with different taxation systems, making it a critical area of focus in corporate strategy and HR management.


In the world of business, an expatriate, also known as an expat, serves a significant role, often utilized to bring their expertise and experience to global enterprises. The purpose of using expatriates is to benefit from their sophisticated skills, and in-depth knowledge of the home company, which make them efficient at aligning the foreign office’s operations with those at headquarters. In addition, expats are useful in fostering cross-border integration and understanding, helping the company to adapt to cultural differences and creating a global corporate culture that fosters unity and seamless cooperation across diverse teams or divisions.Expatriates are regularly used for setting up overseas branches, managing resources, handling assignments of a critical nature, and when there is a shortage of skills locally in foreign branches. They also assist in preparation for a larger-scale dynamic shift in the market. For instance, a company may want to tap into the growing market potential in a different country or region, so they’ll send an expatriate to study the market, adapt to the local situation, and draw a comprehensive plan. By these means, companies can easily spread their wings, ensuring that they are culturally sensitive and adept at navigating local complexities.


1. Google, headquartered in the US, may send one of its top engineers as an expatriate to oversee a project in its office in Switzerland. This engineer is an example of an expatriate, as they temporarily live and work in a nation different from their home country.2. HSBC Bank, a British multinational investment bank, regularly employs expatriates. An employee originally working in the London office could be asked to relocate to Hong Kong to improve operations there. In this case, the employee would be an expatriate, living and working in a foreign place.3. ExxonMobil, a multinational oil and gas company, also employs individuals from its home country, the United States, to work overseas in places like Qatar or Saudi Arabia to manage the oil pipeline projects. Those employees are considered expatriates as they are living and working outside of the United States.

Frequently Asked Questions(FAQ)

What is an expatriate?

An expatriate, often shortened to expat, is an individual who resides in a country different from their country of citizenship or origin. Often, these individuals are employees who are sent by their companies to work in a foreign branch or office.

Why do companies send expatriates?

Companies send expatriates for a variety of reasons including the need for specific skills, to foster global connections, to gain international experience, and to expand into new markets. It is often done to ensure the company’s global standards are maintained.

What are the financial implications for an expatriate?

The company often covers the costs related to relocation, housing, children’s education, and other expenses. Expatriates may also be entitled to additional allowances or benefits, commonly known as expat packages.

Is an expatriate’s income taxed in the foreign country?

Taxation depends on agreements between the home and host countries. Often expats are liable for taxes in the country they are residing in, but they could also have obligations in their home country. It’s advisable to get tax advice before becoming an expatriate.

How long does an individual typically stay as an expatriate in a foreign country?

The length of stay of an expatriate is usually determined by the nature of the assignment or project. It could be anywhere from a few months to several years.

Do expatriates have to give up their citizenship?

No, being an expatriate does not typically change one’s citizenship. However, they might also choose to become a dual citizen or change their citizenship depending on the country’s law and their individual circumstances.

What challenges may an expatriate face?

Some potential challenges for an expatriate could include cultural adjustments, language barriers, social isolation, and having to understand and navigate through entirely different sets of laws and customs. Professional support is often required to help expatriates and their families adjust in a new country.

What is repatriation in regards to expatriates?

Repatriation is when an expatriate returns to their home country after completing their assignment or duration of stay in the foreign country. This process can also bring its own set of challenges, as the expatriate and their family may have to readjust to their home country, which could have changed during their time away.

Related Finance Terms

  • Relocation allowance
  • Cross-cultural training
  • Host country
  • Repatriation process
  • Foreign subsidiary

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