In this blog we are going to summarize the key relocation tips for US expats who are moving to Israel should be aware of. We have summarized these ideas in the video below.
If you are a US expat moving to Israel and would like more expat financial tips, please join the Nardis Advisors email newsletter.
#1 Check your brokerage accounts
Check to see if you can still trade in your US brokerage accounts. You want to check if your broker or advisor in the US will still keep the account, now that you are no longer a US resident. There have been some cases in which people who moved from the US to Israel have not been allowed to stay in their investment accounts.
#2 Look into opening an Israeli bank account
When you move from the US to Israel, you are most likely going to need to open a bank account in Israel. When dealing with Israeli banks, there are a few important things to keep in mind.
When you go to set up a bank account here in Israel, make sure that you get a personal banker that you trust. It’s important to understand how healthcare , taxes, and Social Security work here in Israel, and you want to get someone who can help you make the right decisions.
Make sure you negotiate a preferred exchange rate. Ask the banker what your exchange rates are. You can wind up paying a spread of well over 1% if you don’t get a special rate.
Be ready to deal with tight compliance AML controls. After you move to Israel, you will need to prove that your accounts overseas in the US are yours. You can not cut any corners in this regard. This is another reason why it is important to have a personal banker that you can consult with for assistance.
#3 Be aware of the 10 Year Tax Holiday
There are certain tax exemptions that apply to people who move from the US to Israel (or back to Israel). This is called the Ten Year Tax Holiday. These apply to two types of people:
- Americans who are moving to Israel, or
- Israelis who are moving back to Israel from the United States (after being abroad for over ten years).
Once you move to Israel, there is a Ten Year Tax Holiday on income from investments overseas, or from a US account. It also applies to any work that you do in the United States or outside of Israel. However, any work you do in Israel, even if it is for a US company, will be taxed. US expats do not pay tax on any foreign earnings here in Israel for the first ten years of Israeli residence.
If, for example you get a big cash bonus from your job or you sell a business, you can take the money out of Israel and invest it in the United States and for the remainder of the 10 year period it will not be taxed.
This is explained in the video below in both English and in Hebrew.
Summary of relocation tips for US expats
These are just a few relocation tips for US expats that may apply if you are moving to Israel (or moving back to Israel) and should be aware of. For a comprehensive assessment of all the factors, you should consult a financial or tax professional.
If you could like to speak with us, please contact us to set up a meeting.
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Norman H. Chait, CFA Managing Principal, Nardis Advisors LLC, November 25, 2020
Disclaimer: Nardis Advisors LLC (“Nardis”) is a Registered Investment Advisory Firm regulated by the U.S Securities and Exchange Commission in accordance and compliance with applicable securities laws and regulations. Nardis does not render or offer to render personalized investment advice through this medium. The information provided herein is for informational purposes only and does not constitute financial, investment or legal advice. Investment advice can only be rendered after delivery of the Firm’s disclosure statement (Form ADV Part 2) and execution of an investment advisory agreement between the client and Nardis.Ae