What to consider before committing to "the move"?

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Jerry
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What to consider before committing to "the move"?

Post by Jerry » Fri Aug 29, 2003 12:10 am

I am considering accepting a long term business assignment in Finland and would be moving from New Hampshire USA. I'm curious as to what the tax liability is when working for a US corporation? If I have my car and sailboat shipped over is it complicated to register or should I sell all here and start from scratch? I only speak english, how will I survive in a business environment (particularly since I'd be managing mostly Fins)? These are only a few questions at the early stage of my contract negotiations.

Thanks to all,
Jerry Keto



What to consider before committing to "the move"?

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Hank W.
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Post by Hank W. » Fri Aug 29, 2003 1:07 am

Welcome to the group, 'mr field'.

If you browse the older subjects, some stuff has been discussed already in more or less detail.

If you are a resident, you are taxed as a resident. Doesn't matter if your money drops from heaven. Visit http://www.vero.fi for details. Theres stuff on the English pages about this stuff.

Regarding moving read
http://www.mol.fi/migration/engopas.pdf
http://www.mol.fi/migration/kotisuomessaen.pdf

The car you can bring over -but if it is worth bringing over is a different thing. Like is it worth driving (gas is $4 a gallon cheap), how much does the insurance cost, does it have any resale value... etc. Asking for a 'company car'might save a lot of headache.

About the sailboat... hmmm... you drag them up for the winter there don't you? Don't know how much the yacht clubs charge for winter storage, but lets say it is about as cheap as anything else here.

About survival in the business environment, well, I guess Gavin & Donald can tell about their experiences. See, its not language, it is body language & culture that'll get you. Everyone here in business knows English - some more than they will speak.
http://virtual.finland.fi/finfo/english/guide.html

And what comes to (mis)management... well, Siberia teaches. I've been working in the USA. Employees in the USA are laser-guided. Employees in Finland are fire & forget. Incentives are different too. If my name and mugshot would be on a plaque in the office visible to the public I'd quit for embarrasment.

BTW, car, yacht, you aren't one of those pyramid marketers are you? :mrgreen:
Cheers, Hank W.
sitting here like a lemon looking for a gin.


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Post by Caroline » Fri Aug 29, 2003 10:29 am

You will need all the money you can get here. I would not recommend sending your car or boat here, unless the car has higher resale value here than it does in the States.

As far as the language and ways of life are concerned: if you're planning a temporary move (up to a few years), you won't need to be so concerned with adapting to the culture. You can survive just fine with English, as long as you live in the Helsinki area. On the other hand, if "long term" means possibly permanent, I would suggest that learning Finnish is essential, although some apparently get along without it.

I'm a New Englander too (from Massachusetts)....I'd say that Finland is pretty much like NE as far as being austere, puritanical, with harsh winters, and high standard of living compensating for high cost of living. Coincidentally, my Finnish hubbie and I briefly fantasized about living in New Hampshire for a while- lured by the fact that NH has no income tax :wink:
Former expat in Finland, now living in New Hampshire USA.

Remembah whea ya pahked ya cah!


Jerry
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In conclusion....

Post by Jerry » Sat Aug 30, 2003 7:14 am

Based on the responses, and reading other posts, it appears that I should take a strong negotiating position before committing to the move.

To remain 'whole' I should ask for:

Full expenses (including housing, meals and gas),
company car (or full expense of importing and registering my car),
and US tax equalization?

Sound about right?

Jerry


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Re: In conclusion....

Post by Hank W. » Sat Aug 30, 2003 9:29 am

Jerry wrote:and US tax equalization?

Heehhh :mrgreen: hheehhheee :mrgreen: ha :mrgreen: haahhhaaahhaa whaahhaahhheehhhehheee :mrgreen: hee...

Are you trying to get a refund for 22% sales tax? :mrgreen:

I'll sue you for rupturing my spleen...:mrgreen:

You American's don't pay taxes. You pay insurances and liabilities and to you lawyers... here we pay taxes, and healtcare and education is "free". The cost structure is different.

Anyhow, if I go see job ads for my profession in the USA, the salaries are 3x as higher. That is the gross salary. And you guys pay virtually no taxes on it. I make 1/3 and the net is about -35%, after which I pay the mortgage and (un)necessities and... spare some change, mister?
Cheers, Hank W.
sitting here like a lemon looking for a gin.


Donald

Post by Donald » Sun Aug 31, 2003 8:24 am

Hello Jerry,

Welcome to .! It seems you may be taking an upper management job with your assignment here in Finland. If you do accept it and move here, please, don't forget this site as a potential for candidates for positions open with your company. We have a wealth of expertise and experience on this board who are in a variety of stages of employment/unemployment that could fill the void within your organization. As I have told people before, it is all about networking!

Like Caroline, I am a New Englander from Boston. I had my own real estate business there but couldn't transfer those skills here because of language. I ended up teaching English and starting my own consulting business. Currently, I am up Ilmajoki near Vaasa teaching at South Ostrobothia College. I have been in Finland since April 2000.

We had shipped everything we owned in a large container from Boston including our car for $4,500.00. You can ship just your car on what's called a roll/roll for around $1,000.00. I have no idea what a boat would cost but you could have your company get an estimate. You may be able to negotiate the cost of the move with your new company. I would also strongly suggest you take some sort of cultural awareness class to be aware of what is and isn't acceptable here. The laws here are certainly different when dealing with employees. You should seriously consider having that component built into that class. Caroline gave some good advice in her posting to you. If your not permanent then language should not be an issue especially in the Greater Helsinki and Turku areas. But to be an effective leader and role model within your organization, I would strongly suggest you do learn Finnish with Swedish as a second goal. Your company could invest in an intensive corporate language training program for you.

Hank also gives good advice and is a Finn who has lived in the States and wishes he was back there in maybe Hawaii earning a six figure income sipping on a Mai Tai while watching the bikini thongs stroll by in Maui. Don't mind his sarcasm, he can be a good friend and he is real knowledgeable about how things work here. As he said, there are old threads and links here that can pretty much answer most of your questions.

PM me if you want to talk personally. I will gladly talk to you about what you need to know and do. Good luck!
Last edited by Donald on Sun Aug 31, 2003 12:33 pm, edited 1 time in total.


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Post by dusty_bin » Sun Aug 31, 2003 9:29 am

As the others are pointing out, the cost of living here is high and wages are low. There is a very different setup with healthcare, it is far from being as socialised as I expected when I came here, or as socialised as the UK.
You will probably end up taking out some form of private health insurance or paying as you go in order to get similar care as you got in the US.

Cultural differences are significant and sensitivity training will be a big help. If you are not used to working abroad which, given your post, seems likely, you need to consider the effects of culture shock. It is almost inevitable that you will be affected by it and your work and relationships will be impacted.
When negotating with your employers, you need to ensure that you will not be doing too much 'mission critical' or possibly career limiting stuff for the first six months or so. articularly if you arrive in the depths of winter.

Speaking as one who speaks little FInnish, I can assure you that Donald is correct about learning FInnish, even in an environment where English is normally used. You will be out of the loop on much of the implicit knowledge floating around and will be unable to detect any emotional undercurrents, unless your staff choose to tell you (and of course what they tell you wil be only what they want to tell you!) I assume that your employer will have arranged for classes for you and possibly family, get your classes schedule during work time if possible, you will end up not doing them otherwise;)

Don't forget that you will be liable for two sets of taxation. US taxes and Finnish. You do get a tax allowance of IIRC $70 from the IRS but that does include 'non salary' benefits. When non salary benefits are included, you could find that a $60 salary turns into a $100k taxable income... OTOH as a foreigner, if your earnings here, in year one exceed $60k, then your employer can (and should) apply, on your behalf, for a tax benefit limiting your maximum, Finnish, income tax to 35%. (I assume that you would certainly NOT be moving here for less...)

I assume, of course, that you will have negotiated a package to enable travel back to the US at least a couple of times a year for the whole family?

Some useful links:
General info and links to other stuff:

http://www.remax.com/corpreloc/iprepare.html

A salary calculator, this is useful but limited as it deals in net figures only. It suggests that the cost of living in Manchester, New Hampshire is about the same as Helsinki. Hmmm... possibly after all taxes...

http://www.homefair.com/homefair/servle ... internal=T


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Post by Andrew_S » Sun Aug 31, 2003 10:46 am

In Finland I've worked with Americans who are here and others distance managing via teleconference etc. Cultural awareness training would be a great help if you do not already have experience with groups of Finns.

Especially in group meetings the general silence of most of the Finns in the group could come as a big surprise to you. Usually one or two of the more senior ones will do all the talking (apart from foreigners) and the others will speak when spoken to.

I have my own pet ideas on why this is.... :mrgreen:
(Maybe others would like to expand).


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Post by Hank W. » Sun Aug 31, 2003 11:55 am

dusty_bin wrote:You will probably end up taking out some form of private health insurance or paying as you go in order to get similar care as you got in the US.


Well, hum... I thought the doctors in the UK were more private practitioners than here, but then again most of my experience has been going to the "guessing centre" to queue up as a kid.

The thing is the guy working in the company is generally provided health care by the company. It may be they have stricken a deal with the local municipal clinic, but it may be a private version, like Medivire or something like that. The difference cannot be seen that often, except maybe less winos in the waiting rooms.

Oh, and dentists are generally not covered nor optics. (if anyone needs new glasses, get them somewhere else than here)

I have private health care, and I actually pay my dentist out of my own pocket, as if I have a cavity now, I'll be needing dentures by the 8 months it takes me to get a time, which I'll forget, and which will be where I live, not where I work, so I'll miss the whole day at work... yeah, right.

Now, one thing about the person being covered, the family won't be. The municipal health care will take anyone in, and depending on the residency, they'll send a bill. However I can't see any ret... hrm... manager's wife dragging three screaming kids into the municipal clinic during the flu season.
Cheers, Hank W.
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Post by Hank W. » Sun Aug 31, 2003 12:17 pm

dusty_bin wrote: You will be out of the loop on much of the implicit knowledge floating around and will be unable to detect any emotional undercurrents, unless your staff choose to tell you (and of course what they tell you wil be only what they want to tell you!)


One thing is to start appreciating coffee. I sometimes go drink my coffee in the smoking room, just so as to get the "vibes". There is so much discussion going on there that doesn't surface on the offocial level, if you don't do your coffee breaks, you are out as a snowman.

Well, higher management usually doesn't come with us peons to drink coffee except sporadically.

On the other hand in the sauna one does get even better idea of things, as there everyone is more or less equal.
Last edited by Hank W. on Sun Aug 31, 2003 12:22 pm, edited 1 time in total.
Cheers, Hank W.
sitting here like a lemon looking for a gin.


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Post by Hank W. » Sun Aug 31, 2003 12:20 pm

Andrew_S wrote: Cultural awareness training would be a great help


If you ask Lenita Airisto, it would be "lack of culture training" :lol:
Cheers, Hank W.
sitting here like a lemon looking for a gin.


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Post by dusty_bin » Sun Aug 31, 2003 12:30 pm

Hank- I was genuinely surprised at the low level of socialised health care in Finland. It is lower than the UK (where we complain about the NHS WAAYYY too much!)

In the UK we do not pay to see a doctor, we do not pay to go to hospital, we do not pay for necessary treatments. The majority of people in the UK do not pay for their prescription drugs. Dental care is pretty cheap and in very many cases free.
I have never paid for dental care... (oh and I still have most of my teeth!)
Optical services would make a Finn weep! Eye tests are often free and if paid for rarely cost more than about 20Euro. I bought a pair of glasses in Tallinn from Instrumentarium. They eye test there cost me 10Euro, the glasses, titanium, half framed, high refractive lenses and coatings cost me 149Euro, the same FRAMES in Instrumentarium in Helsimki were 250Euro! IIRC the eye test here would have cost about 70Euro.
My last pair of titanium framed specs in the UK cost me also about 150Euro

If you need outpatient treatment such as physiotherapy, here, in practice you have to pay, or wait until the treatment will be of no benefit. Some of these services can be reclaimed through Kela, but as we both know, not all the money is repaid and at the point of claim, we do not necessarily know if it will be approved for payment. I have seen people have to budget whether they can afford to pay for treatment or not. Usually to the detriment of their health.

From the perspective of the visiting American, in order to get the type of service required and used to, a private medical plan is a necessity, even if the firm has its own health facilities. I would expect a firm importing a manager to cover these costs both for the manager and his immediate family. A volunteer arriving here off his own bat has, of course, no such rights or expectations!


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Post by Hank W. » Sun Aug 31, 2003 12:30 pm

Andrew_S wrote:Cultural awareness training would be a great help if you do not already have experience with groups of Finns.


One also needs "Cultural nakedness training", which is a great help, if you do not already ave experience with naked groups of Finns in a sauna.
:lol:

In Finland, the sauna is an institution and eshtablishment, and Finns are very proud of the habit. there are some formalities, but it is not as rigid as a tea ceremony a la japonais.

All respectable companies have a "sauna/fireplace suite" or then they rent one for occasions. (Our office has two separate ones, with three saunas).

Lets say if you want to make any friends in Finland, going to the sauna with them is one of the main bonding things.

Just don't take any <word censor> before you go, after all it is not a Swedish sauna we are talking of! This meaning, if you associate a sauna with a gay massage parlor in San Fransico, I'll have to take you to one of the last public saunas in Helsinki, and have a formidiable "washer woman" do the massaging. Nothing happy about that experience - especially for a first timer.

Here's Tim Bird's article on the sauna http://cankar.org/sauna/howto/bluew.html

I think for people in the Angoamerican culture nakedness, even though not "public" but even within a small group is considered... dunno, "lewd and lascavious behavior". However in Finland and as well in the other Nordic countries (as well as in Russia) - going to the sauna is a quite normal thing and being naked is just.. hmmm... taken for granted. Not being naked is what starts bringing in the stares. Of course this is one of those cultural things you either get totally warped with or then totally comfortable with.

But as stated, the "cultural awareness" part might exceed your expectations.

PS. That thing with the hole in the ice. Its not obligatory, more like a macho thing. You wouldn't catch me doing it, theogh making snow angels is a different thing..
Last edited by Hank W. on Sun Aug 31, 2003 5:19 pm, edited 1 time in total.
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Post by Hank W. » Sun Aug 31, 2003 5:17 pm

Andrew_S wrote:I have my own pet ideas on why this is.... :mrgreen:
(Maybe others would like to expand).


On the silence of the Finns?

Hmmm... there are a few points raised in Gavin's sticky "How to get a Job in Finland", but there isn't given a "reason".

Only thing I know is after the military I know not to volunteer nor make myself visible, to avoid assignments???
Cheers, Hank W.
sitting here like a lemon looking for a gin.


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Post by Hank W. » Mon Sep 01, 2003 9:42 am

About them taxes:

"In Finland, resident individuals are taxed on their world-wide income. Residents are taxed according to progressive tax rates for national tax purposes and flat rates for municipal ones (including even church tax and social security payments).

An individual is deemed to be a resident of Finland if he has his permanent home in Finland or if he stays in Finland for a continuous period of more than six months. The stay in Finland may be regarded as continuous in spite of a temporary absence from the country. A Finnish citizen is, however, considered to be resident in Finland for three full calendar years after leaving the country, unless he can produce evidence that he has no longer any essential connections to Finland (the three-years rule). A resident status can begin or end in the course of a year.

Taxable income
Individual taxpayers´ income can be divided roughly into two categories: salary income and capital gains. Income tax is paid to the state and the municipalities at a progressive tax rate. Capital income tax is 29%.

A foreigner working in Finland may qualify for a special tax at a flat rate of 35% during a period of 24 months if he receives any Finnish-source income for duties requiring special expertise and earns a pecuniary salary of EUR 5,800 or more per month. This law provides that the expert has not been resident in Finland any time during the five previous years. This rule is effective only if the employment has started in 2003 or earlier.

For taxpayers resident in Finland, personal earned income subject to tax may include wages and salaries of all kind paid in money, but also directors’ bonuses, commissions, rental value of an employee’s free housing, pensions and annuities, living and housing allowances, car benefits or unemployment benefits. Furthermore, company options are taxed as earned income. The state income tax on earned income is imposed at progressive rates. In addition to that, municipal tax, church tax and social security taxes are imposed at flat rates on the earned income.

Any income accrued from capital, e.g. dividends, rental income and capital gains, is taxed at a flat rate of 29%. The gain from the sale of the taxpayer’s home is tax exempt if the taxpayer has owned and lived in it continuously for at least two years.

Interest income from deposits in ordinary Finnish bank accounts is taxable at a flat rate of 29%. This is a final tax.



"Tax rates for residents in 2002

State tax on earned income in 2002 (EUR)


Code: Select all

Taxable income    Tax on the limit (EUR)  Percentage on the excess 
11 500 - 14 300                   8                                13%
14 300 - 19 700                 372                                17%
19 700 - 30 900               1 290                                23%
30 900 - 54 700               3 866                                29%
54 700 or more               10 768                                36%
 


State wealth tax

For net value of assets of EUR 185,000, a wealth tax of EUR 80 is applicable. A rate of 0.9% applies to the value exceeding EUR 185,000.

Municipal taxes on income

Municipal tax is levied at flat rates on taxable income. The tax rate varies between 15% and 20%, depending on the municipality.

Church tax

Church tax is paid by the members of the Finnish Evangelic Lutheran and Orthodox churches at flat rates on the taxable income as determined for municipal tax. Rates vary between 1% and 2%.

Social security payments in 2002

A sickness insurance premium of 1.5% is collected from the taxpayer on his earned income.

Pension and unemployment insurance premiums are usually withheld from the employee’s salary at a rate of 4.8% (2002). These premiums are not administered by the tax administration.

That was about taxes.
We shall continue our programming now on the topic of how to avoid death from starvation and 1001 ways to make gourmet food out of sawdust.
Cheers, Hank W.
sitting here like a lemon looking for a gin.


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