Over the years, on this site and other places, I have advocated that as an expat it is important to maintain a US presence. If you are not from the USA, then just substitute your country of origin. If you are British, maintaining a UK presence has importance, etc.
The ways that I have advocated for keeping a US presence are through things like maintaining a US bank account, having a mailing address in the USA, having a US telephone number, etc. I have done, and continue to do all of these things. In the past, I have had a stronger US presence than I do now, though, and I feel that I am internally re-evaluating my thinking along these lines. I suppose that the longer you remain outside the USA, the less important that US presence becomes.
I still have my US bank account, and I feel that is important. It allows me to more easily handle monetary transactions in the USA, with US customers, etc. I still feel that maintaining a US bank account is very important, and I expect that I will always maintain that. In the past, I have maintained only one bank account in the USA and that has served me well. However, over the past couple of years, I have actually expanded my US banking presence by adding a couple of additional accounts. Once you are here, especially with very tight banking regulations imposed after the 9/11 terrorist incident (part of the Patriot Act), getting a US bank account while not being present has gotten much harder than it used to be, so getting a bank account before you leave the USA is very important. In the past couple of years, I have been able to add additional banking in the USA through some of the e-Commerce business that I do, some of the credit card processing companies that I use have offered me new banking deals, since I have been a long term, and relatively high volume customer. In my opinion, it is important to take advantage of any banking that you can in your home country, because you never know when such a capability will be needed, and will be a valuable asset to you here. Getting things lined up in advance is certainly preferable to having to travel back to take care of these arrangements, which is becoming increasingly necessary, although not always.
Another important US presence that I have maintained, and will continue to maintain is a US mailing address. I have my US address in the state of Florida, through a company called MyUS. I have been using them for about 8 years now, and have always been happy with their service. I use my US mailing address to maintain a place where people can send me mail, without having to send it through international means. Also, at times, I do not necessarily want to announce that “I am in the Philippines” and having a US address would leave the impression that I am indeed in the USA. To be clear, I don’t do this to be sneaky, or to do anything illegal, I simply do not always want to announce where I am, for privacy purposes mostly. Having my US address also allows me to have my banking information sent there and then forwarded to me here in the Philippines. MyUS sends all of my forwarded mail through DHL or another express service, so it is a very safe way of getting stuff here. Sending through the mail can be troublesome with packages disappearing, or arriving very late. So, having my mail accumulated and send in bulk to the Philippines through a courier service is trouble free, reliable, and frankly, it is not very costly for the peace of mind that it provides for me.
My third US presence that I continue to maintain is a US Phone Number. I can give out my phone number to business associates, friends and family members in the States, and they can call me without having to make an international call. My number is located in the same city exchange where my mother lives, so I can call her for free (only paying my monthly flat service charge), and she can call me exactly as if it were a local call. I use Vonage for this service, and have been using Vonage for 8 years now without a major complaint. Through Vonage, I can call any telephone in the USA, and much of Europe with no long distance charges due. I pay $24.99 per month for the service, and have been very satisfied with the value that they provide to me for that price.
As I said toward the beginning of this article, I am presently sort of redefining my US presence strategy, and I have been cutting back a bit on my US presence. For example, after years of maintaining a US Paypal account, about 2 years ago, I switched over and I now have a Philippine Paypal account. Also, while I still have US banking, as explained above, I am now using Philippine banking a lot more than I use the US accounts. I think that these kinds of changes are natural as a person has been away from his home country for a more extended time period.
So, yes, I am cutting back on my US presence, however, I am still a strong advocate that some US presence is important to maintain. Keep your options open, you never know if you might return home, or if you will need to use these important US presences while living in the Philippines. I know that I have used each of these services regularly in the past decade while living in the Philippines. I expect that you would use them too.
Very sound advice. I’m not overly thrilled with my mail forwarding service – they’re ok, but not nearly as good service as the company we used the last time we lived in Gensan. I’m just wondering how much of a hassle it would be to switch now that we’re here.
Hi Gary – It is not hard to make the change while living here. I signed up for my US Address/Forwarding Service while living here, and it was simple to do. The most difficult part, which is still easy but just takes time and effort, is notifying all of those who send you mail of your new address.
Hi Bob, I don’t handle the money situation, so I’m rather innocent of such things. You stated in an earlier post that you should level with the US banks that you do business with that you will be living abroad. Does having an address like this make that not necessary, or is it still important to do?
Hi queenie – Of course, it’s only my opinion (BTW, I am the world’s leading expert on my opinion 😆 ), but I think it is important to let your financial institution know that you are living in the Philippines. The US address accomplishes a couple of things. First, it gives a local address where they can mail you whatever they need to send you from time to time. Secondly, I believe it shows to some extent that you have not just pulled up stakes and moved on (even if you have)… it shows them that you are keeping a foot in the USA, and they probably feel that you will be back again, so makes them more likely or willing to serve you. That’s my thinking on the subject anyway.
Hi Queeniebee, sorry to bud in. We’ll see what Bob says, but I personally told the institutions I deal with. If you’re going to withdrawal, move money around, pay bills, or even just check your balances online, they might get suspicious if everything is from overseas. Philippines in general is one of the countries that raises the “fraud alert”. If you tell them up front, web logins, withdrawals and such could still raise a flag, but you could call ’em and say “hey, I told you I’m over here!!”
Thanks Gary, That makes sense to me too. We’ll see what Bob adds to that, but it probably is the best policy to be upfront about it.
Gary is a smart guy, Queenie! I can’t argue with him a bit! 😉
Hi Gary – I am in full agreement with you. The bank is going to figure out that you are not in the States. Anytime you use your credit/debit card, go to the ATM or log into your online banking they know for sure that you are abroad. Best to let them know and be up front about it.
Thanks Bob, That last point makes sense about them maybe being more willing to serve you if they thought you’d be coming back eventually.
Here’s another question–if I wanted to eventually change a US Paypal account to a Philippine Paypal account, could I still purchase US Ebay with it? (That is if the seller would be willing to ship internationally)
I like that your service ships your mail to you. I wouldn’t be comfortable with the services that send you all your mail info on-line to you.
HI Queenie – Absolutely! With a Philippine Paypal account, you can pay anybody, anywhere in the world! They won’t know the difference of where your Paypal account is located.
And I thought I was just a “wise guy” 8-P
If you have a Philippine Paypal account, are you then limited to linking to Philippine banks? If so, I wonder if there’s value if one maintains a US Paypal account, while the spouse has a Philippine account?
Hi Gary – With a Philippine Paypal account you can link to Philippine Bank accounts and US Bank accounts. I considered if I should have a US and a Philippine account, and I opted to just go with a Philippine account.
Out of curiosity then Bob, if it doesn’t matter, and you can still purchase off of eBay USA..then why get a Philippine Paypal account?? Or is it because you won’t be able to purchase from Philippines eBay site ?
Hi Danny – You can buy anywhere with any paypal account, the country doesn’t matter to the person accepting payment, they won’t even know. But, since I live in the Philippines, when I had a US paypal account, they kept warning me of activity in my account in the Philippines and such… I just switched to a Philippine account, since this is where I live anyway. 😆
Hi Bob – Just a reminder for anyone using a Philippine Paypal account:
A Philippine Paypal account falls within the definition of “foreign financial account” in Department of the Treasury Regulations (31 CFR 103).
U.S. persons (including citizens) having “a financial interest in, signature authority, or other authority over one or more financial accounts in foreign countries that, at any time during a calendar year has an aggregate value in excess of $10,000, must report those relationships with the Department of the Treasury on or before June 30 of the following calendar year (e.g., June 30, 2010 for calendar year 2009).
Those who just had simple bank accounts in the Philippines who have or are about to have a Philippine Paypal account, be advised that it will add to that aggregate and could possibly put you into a reporting required status.
Many countried (USA & Canada included) are starting to crack down on what they consider to be offshore tax havens. Within the past few months, they’ve included looking into offshore banking and financial services.
It’s no longer the “fat cats” and “big business” that are targets – even citizens of moderate wealth and small business owners are being given the eye. Cracking the secrets of Swiss bank account info last year has started a “witch hunt” for tax revenue deemed owed. The Department of the Treasury and the IRS will be looking at more people now, seeing whether they included that PHP 100 interest in their US tax returns. 🙁
Paul,
Very good advice. I never gave this much thought. I have between 7,000 to 15,000 peso in a joint PNB account and have no clue on the amount on interest (if any) earned on it. Do you think I can get a 1099-INT from PNB? (just joking)
I had a retired IRS agent teaching my tax class when I was taking Accounting classes to sit for the CPA exam. The first statement he made to the class was that “by the grace of God the US government doesn’t tax you 100% on your income.” I started to laugh but I could see that he was very serious on his statement.
Hi Jack – PNB 1099-INT 😀
A side note to all: Many clients of Philippine banking receive periodic statements from their banks that report pertinent info regarding account balances, interest earned, fees charged, etc. Do not disregard or throw those statements away – keep them for reference and use them to annually determine:
* whether you have unearned income (e.g., interest) to report for taxes, or
* whether assets amassed exceeding the $10,000 threshold for Department of the Treasury reporting.
Obtaining a year’s worth of statements from Philippine financial institutions is a very costly proposition in terms of banking charges and fees. Fees have been known to run into thousands of pesos – the result of time and effort required to investigate an account (or accounts) for a customer over the period of one year.
Regular periodic statements are normally part of the service the bank provides to account holders. Research and reporting of account information other than those statements is at extra cost.
Oh Paul, there you go, always gotta splash us in the face with that cold, wet reality ;b
To tell you the truth, Gary, the reality, though wet, was merely tepid.
A new “Announcement” and a new “Notice” have been released dealing with this report filing and changing a few things. Additionally, some proposed regulations were issued to “clarify” definitions and the process itself.
I’ll have more details in an upcoming article.
only another reason to keep it in my wifes name who is not a citizen
Jason – It really doesn’t matter who’s name the financial account is in.
If you have:
* signature authority or other authority for the account, or
* a financial interest in the account (e.g., you put money into your wife’s account)
you are considered as an owner of the account. As a “U.S. person,” it is included in determining whether or not you are required to file.
Paul – this is an old article, so I don’t know if you’ll see this comment and be able to reply.
How does one go about this disclosure (exceeding the $10,000 threshold), is it part of your tax returns?
Good idea Bob.
I see SunStar Network reports “It was bad enough that Justice Secretary Alberto Agra’s order clearing two members of the Ampatuan clan rested on shaky legal ground. The timing was also highly suspicious.
Agra, overruling his prosecutors, dropped murder charges against Gov. Zaldy Ampatuan of the Autonomous Region in Muslim Mindanao and his uncle Maguindanao Vice Gov. Akmad Ampatuan Sr.
Witnesses positively identified the Ampatuans as among those who took part in the massacre of 57 people, including 32 media workers, in Maguindanao, a heinous crime unprecedented in brutality and scale.
As against positive identification, the Ampatuans’ defense that they were not at the crime scene, should have collapsed. Agra embraced alibi, scoffed at as weak by the Supreme Court, as reason for getting them off the hook.”
My feeling was that no one of note would ultimately be brought to book for this crime but this seems brazen. Given the “justice” system there you are very wise to have all elements of an exit strategy in place.
Not sure what the Ampatuan case has to do with having a US presence… but I think it was crazy for the charges to be dropped against the two.
Another mail service in Florida is St. Brendan Isle in Green Cove Springs. They have been serving cruisers who travel from months to years. They also service ex-pats too. If you are looking it may be worth while to shop around?……..i2f
I am not familiar with them, but certainly competition is a good thing! 😆
Hey Bob,
You say you use a Flordia P.O. box,Is this all you need to establish residency? I wan’t to establish residency in a state with no state income tax before I move th the philippines, But not sure how to do It. I will be living in California until I retire, then moving there. But California has some high income taxes.
Hi Hudson – A couple of things. This article is about having a presence, not about having residency. No, I am not a Florida resident, and I do not believe that having a mailing address there would be enough to establish residency. I will say this.. California is very aggressive about residency. They will do everything they can to keep you a resident of California so that they can continue to tax you. I cannot offer advice on shedding California residence, as I have no experience in doing that.
Second thing… what I have is not a P.O. Box. I have a Street Address, and it is not associated with the Post Office at all.
Hi Hudson & Bob – I do have experience in shedding California residency and have helped several others in doing so.
Long story short: If you plan on living in California until you depart for the Philippines, you will be considered a resident of California until you can prove that a) you no longer live in California, and b) you’ve cut your ties with California.
“It ain’t easy” is putting it mildly, and saying that California is “very agressive about residency” is only the half of it. For tax purposes, here’s what California says.
Under Section 2100 Definition of Resident:
“R&TC Section 17014(a) defines “resident” as:
– Every individual who is in this state for other than a temporary or transitory purpose; and
– Every individual domiciled in this state who is outside the state for a temporary or transitory purpose.”
Source: http://www.ftb.ca.gov/aboutFTB/manuals/audit/rstm/2000.pdf
In the same source, under Section 2200 Temporary or Transitory Pupose, it continues:
“CCR Section 17014(b) provides that the state with which a person has the closest connections during the taxable year is the person’s state of residence.”
Additionally, it cites the Appeal of Stephen D. Bragg 2003-SBE-002, May 28, 2003, wherein the Board of Equalization provided a list of factors that inform taxpayers of the type and nature of connections the Board of Equalization and the Franchise Tax Board find informative when determining residency. The list is not all inclusive. You can view it by clicking the link and navigating to page 3.
Yes, this is a lot of mumbo-jumbo gobbledegook, but it’s an example of that state’s “aggressive” nature, and what is keeping you as a resident of California.
Kuya Bob,
Have you tried Skype? That is the VOIP service I am currently using. However, if the internet is slow where ever I am(most of the time it is)I have some trouble with the call. Just wondering if there is a better service out there that can compete, price-wise…
Hi Mike – I am very happy with Vonage. Have I used Skype? Yes. But, it is not my Voip provider of choice. For $25 per month, I really don’t care about the money, that is cheap, and I have had great service from them for about 8 years now. I couldn’t ask for more.
Hi Bob,
I am currently set to move to Manila fall of 2011. I have a question on your vonage phone service. Did you purchase it in the U.S. prior to moving to the Philippines? If that is the case I’m assuming that you are using a transformer.
Brad
Hi Brad – No, I purchased it after I already lived here. I bought it online through Vonage and then had it shipped to me here in the Philippines. The Vonage ATA box that I was supplied had universal voltage (100V – 240V) and thus no transformer is needed.
$25 is not a bad price for services rendered. However, Kuya you should know by now I am brato…
Barrato pud ko, Mike, pero naay value sa Vonage.
hi bob, just wanna ask you something on how my american husband could get a temporary to permanent resident visa here in the philippines. He’s been here for 18months now and we had a pending application for his temporary resident visa here at Immigration office, however, when we submit all the required documents, the immigration lawyer was asking him a copy of his bank statement in the US. Which at first was not really in the list of requirements. This made him think the lawyer might just be finding a way to make money out of such application.(not to mention his been fooled by so many filipino business friends he got in the past before we got married taking advantage of his money and ending him up in to nothing.
Do we really need to provide a US bank statement for him? They also asked me to provide a certification of my proof of income as well.
Hi Joy – Such financial documentation are required to get residency here. I had to submit all of that myself.
How much in dollar amount are they looking at? At least minimun? Thanks again.
I don’t think there is a set figure, as far as I know. They want to show that a person is bringing in enough money to support himself while living here, or has enough in the bank to accomplish that.
thanks again for the info.
Hi Gary,
Our home in the Philippines is done and I am wanting to retire there. I am too young to retire and will not receive my pension payments until another 14 years. I need to make a minimum of $1,000.00 monthly to support my three year old son (sending him to school) as well as food, homeowners, water, electric…cable, internet..etc.
I am not sure how to begin. I know I can’t find work there.
Do you have any suggestions?
Hi Puting Lalake – For sure, don’t even think about trying to get a job here, it’s nearly impossible! I have written a book, 49 Ways to Make a Living in the Philippines which will give you some great ideas on how to earn money here. You can do it, I know, because I have been doing it for 10 years now. I actually earn more here than I did in the USA. My book is on sale for the next few days. Normal price is $49, but you can get it for $29 for the next few days by entering the coupon code “LiP29” in the coupon box in the shopping cart. Hope this helps.