Christopher Liew is a CFP®, CFA Charterholder and former financial advisor. He writes personal finance tips for thousands of daily Canadian readers at Blueprint Financial.
More Canadians are embracing the idea of living or working abroad. Since the second quarter of 2024, about 144,000 Canadians have left the country permanently. For some, it’s an opportunity to explore the world and experience new cultures. Others are looking for career opportunities, lifestyle changes, or an escape to a simpler and more affordable life.
Before you pack your bags, though, you need to get your ducks in a row. From settling outstanding debts to budgeting for relocation costs, preparing properly will give you peace of mind, so you can focus on enjoying your new chapter overseas.
Here are some practical tips to help you get financially ready before making the move.
Step 1: Understand Canadian residency rules
Your residency status is the single biggest factor in determining how Canada taxes you. If the CRA considers you a resident, you are taxed on your worldwide income.
Residency is not just about how many days you spend in or out of the country. The CRA also looks at your ties to Canada, such as whether you keep a home, have a spouse or dependents here, or maintain Canadian bank accounts, credit cards, or a driver’s licence.
This matters because getting it wrong can lead to double taxation, unexpected departure taxes, or missed treaty benefits. Many countries have tax treaties with Canada that determine where you will owe taxes, but you need to understand your status first to take advantage of them.
Before you make a move abroad, take time to learn how the CRA will view your residency. This is the foundation for every other financial and tax decision you will make as an expat.
Step 2: Tie up financial loose ends at home
Before you leave the country, it’s important to settle any outstanding financial obligations at home. Unresolved debts, forgotten subscriptions, or complicated tax issues can become major headaches once you’re overseas, and taking care of these early ensures a cleaner break and fewer surprises later.
If possible, clear existing balances on credit cards, car loans, or personal loans before moving. If you can’t pay everything off, structure a repayment plan that fits your budget and confirm that automatic payments are working.
Next, go through your recurring expenses like gym memberships, streaming subscriptions, phone plans, or car insurance, and cancel or suspend anything you won’t need while abroad.
You also need to be aware of Canada’s departure tax rules. When you sever residency, the CRA treats certain investments as if you sold them, and you must file a departure return to report this. Planning ahead will help reduce unexpected tax bills.
Step 3: Secure your health and safety abroad
As Canadians, it’s easy to take our health coverage for granted. Once you leave the country, though, your provincial health plan won’t cover most medical expenses.
Before leaving, research comprehensive travel insurance that includes emergency medical coverage, hospital stays, and medical evacuation if needed. Even a short hospital visit abroad can cost thousands of dollars, and evacuation costs can be significantly higher.
If you plan on living in another country long-term, you may also be required to meet certain travel insurance coverage limits.
For instance, in Ontario (OHIP), residents can typically be outside of Canada for up to 212 days (about 7 months) in a 12-month period, with options to apply for extended eligibility (up to two years) for reasons like full-time work or study.
Step 4: Set up your finances for life overseas
Managing your finances across borders can be tricky, especially if you’re juggling different currencies, banking systems, and sources of income.
Look for accounts that make it easy and affordable to manage money across countries. Some Canadian banks have partnerships abroad, which can help you avoid high foreign transaction fees. Alternatively, fintech platforms like Wise or Revolut offer multi-currency accounts with competitive exchange rates and low transfer fees.
If you’re not moving abroad for a specific job, think about how you’ll support yourself. Remote work, freelancing, or digital side hustles can offer steady income. Ideally, though, if your savings aren’t enough to support your travels for at least six months, you should have a set plan for earning money while you travel before you leave the country.
Step 5: Budget for the move and your new life
Moving abroad often costs more than you’d expect. Between relocation expenses, temporary housing, and everyday living costs in a new environment, it’s easy for your budget to stretch thin.
Start by making a list of one-time expenses you’ll incur before and during your move. This may include:
- Airplane, train, and bus ticket costs
- The cost to ship your belongings
- Short-term accommodation
- Storage fees
- Visa costs
Living expenses can also vary significantly between countries and certain cities within a region. Online cost-of-living calculators, expat forums, and local Facebook groups are a great way to get realistic estimates for housing, transportation, groceries, and healthcare before you travel.
Final thoughts
No matter how much you plan, unexpected costs will come up, especially during the first few months abroad while you’re learning your way around a new country.
It’s important to account for surprises like additional documentation fees, deposits, or currency fluctuations by building a financial cushion for yourself before you go.
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