The Finance

Expatriate tax and finances

The Finance of Security:

As Nigeria draws ever closer to its, at best chaotic and at worst violent, elections - all expatriates are more than acutely aware of the ramifications of this on their own lives and careers.

With kidnapping and terror, in true Nigerian fashion, fast becoming the boom trade of the Delta region it is not only the country that is trying to adjust itself economically, but foreign businesses and workers too as the recent bombing of the Shell compound car park proved.

With constant rumours of huge ransom payouts and an increasing body count, whether the final bullet is fired from a MEND gun or an Army one, it is in every expatriates interest to consider all their circumstances and plan accordingly.

Each expatriate down in Nigeria will most likely already have a company provided insurance policy covering them for most events and illnesses in their lives. However, as with the effect of inflation eroding established insurance policies, increased risk can also cause major complications and calls for a review of any policy that you may hold.

If you have found yourself in a situation where your family has been re-patriated for security purposes and you have remained behind as the principle earner, it is essential to take a close look at your life assurance to ensure that it reflects the increased risk, and discomfort that you now face and that your family will be totally taken care of should the worst happen.

To reflect the most common problem of expatriates in the Delta, there is also the controversial subject of Kidnap and Ransom insurance (K&R) to cover. This can be established at a corporate or private level. The debate surrounding this part of the insurance industry and whether it actually promotes the very crime it is designed to protect against is not a new one, with Margaret Thatcher herself actually launching an attack on the sector back in the 1980’s. Clearly though, market forces prevailed as K&R insurance now boasts a growth rate of 15-20% every year.

K&R insurance often appears to go against the national policies of many governments that simply refuse to negotiate with any parties that undertake this crime. However with many cases now being directed at a corporate or private level, with no legislation in place, the aim of getting the victim returned home as quickly as possible can be achieved in any way that the involved parties see fit. K&R insurance simply allows access to the best skills and tools available to conduct the necessary negotiations and operations to almost any expatriate employee that wants to make sure they have planned for every eventuality.

In line with government objectives though K&R insurance is incentivised to promote safe behaviour and reward those that avoid risk. Insurance companies do not want clients to get kidnapped and will ensure that their premiums reflect this, complimenting government policy. Further to this the insurers work with some of the most experienced individuals in the sector to resolve each situation as clearly as possible, removing the burden from local, inexperienced authorities or company managers. The kidnappers come to realise that an insurance company is not subject to emotions and has a fixed amount that it can pay according to each policy, making the settlement process more about economics, and less about fear.

Whatever your moral stance in this argument, it must be noted that the ultimate goal of taking out such a policy is to ensure the quickest possible response and chance at successful release possible. However, many private individuals may not be able to afford these premiums, leaving it up to their employers to decide just how much risk their work force is actually exposed to.

At another level, in a country like Nigeria where financial crime is rife and information freely traded, you should pay close attention to your banking arrangements. No expatriate in Nigeria should ever consider using the services of a local bank for anything more than receiving transfers from abroad, and preferably never from personal bank accounts. It is worth looking at holding an offshore account in one of the more secure havens such as the Isle of Man or Jersey, where the banks pride themselves on security and customer service, meaning even if your account information is compromised, the bank is very unlikely to ever put your funds in any danger or reveal your information to anyone other than your financial adviser. If your net worth is not made public, you are far less likely to be targeted as an individual. In addition, it is worth registering any credit cards to non US or EU addresses, adding an additional layer to your personal finances and, as a bonus, keeping your spending activities away from the prying eyes of any national tax bodies! Locating the advice of a professional, having an up to date will, adequate insurance and secure offshore banking are all options each expatriate should consider.

So for all those living and working in the Delta still, this is a good time to have a look at the financial mechanisms that you have protecting you and your family and to ensure that the risks you are taking are adequately rewarded and adequately insured against. There are huge windfalls to be made through working in adverse conditions such as those in the South at the moment, but only those that plan and prepare accordingly will be able to truly enjoy them now and in the years to come.

All future correspondance with be handled directly by the author. We will have no involvement in your financial matters or queries.