<p>S is going to work in Hong Kong for 3 months. From our experience traveling to Asia and Europe, it is easy to get local money from ATMs and use credit card for spending. S is making a good amount and it is unlikely that he will spend it all. How can he deposit/transfer his monthly earnings into his US account? Are there US banks that he can open an account with to do that? Does he need to open an account locally in HK?</p>
<p>He should ask his employer how they plan to pay him.
My D was in China and she was paid with a Chinese bank debit card that the company loaded each pay period. In her case they had to spend the card down at the end or take cash off of it at the end and convert the RMB back to dollars. Her pay was not great so it was not a problem.</p>
<p>Look at banks with subsidiaries or affiliates in both the US and Hong Kong; this may allow transfer and currency conversion between Hong Kong and US accounts with less cost than otherwise. HSBC is an obvious example, but is probably not the only one.</p>
<p>Maybe he should use the mobile app from BofA or similar - <a href=“Mobile & Digital Banking - Bank of America”>Mobile & Digital Banking - Bank of America;
<p>It’s up to his employer. My son is currently working in London and he had to set up a UK bank account for direct deposit of his paycheck. His employer helped him with the process via a letter of reference for the bank as it is not that easy for a US citizen to get a bank account in England.</p>
<p>My S is planning study abroad in HK next semester, so I’ve looked into banking. The best suggestion I’ve gotten so far is to open an account in the US with Schwab. A Schwab account has no minimum balance, and no ATM fees (on a monthly basis, they reimburse any ATM fees charged by other institutions). I recommend calling Schwab to see if your son will be able to use ATM’s to deposit a check in HKD (or have direct deposit), and then withdraw $US once he gets home. If you have time to open the account before he goes, he can have the ATM card in his possession when he arrives.</p>
<p>The Schwab ATM card is good at ATM’s with the VISA logo, which are apparently pretty common in HK.</p>
<p>Some credit cards charge a fee for foreign transactions. Make sure whatever card your son uses does not incur such a fee.</p>
<p>ATM transactions may incur a foreign currency surcharge, particularly if the ATM card issuing bank is not an affiliate of the bank whose ATM the card is used in to get the local currency.</p>
<p>Thanks for all the suggestions. I will look into them.</p>
<p>His employer will likely have a preferred local bank that it would like to deposit his earnings. The bank he uses abroad does not have to have a U.S. branch. In fact, the types of “premier” bank accounts that enable the depositor have int’l banking privileges usually require a high minimum savings balance, like USD 20k. A conventional HSBC, Citibank, ING acct does not give you int’l banking privileges.</p>
<p>Whether of not he is likely to spend all his earning while he is in Hong Kong, it makes sense to use a local bank which has ATMs everywhere that he can use cheaply and conveniently. If he has any unspent money in the account at the end of his stay, then it is easy to wire transfer the money to his U.S. account. Int’l wiring fees are not onerous.</p>
<p>If his average balance for any month in the year exceeds USD 20k, then the following year he must file a “FBAR” form to the IRS (i.e. a TD F 90-22.1 form to report assets in foreign banks). The arm of the IRS reaches far and wide…</p>
<p>@GMTplus7
Thanks for the info.</p>
<p>After banking, taxes is the next topic to research. Not sure how taxes work in HK and how taxes work in US for foreign earning.</p>
<p>It is a very exciting opportunity but so much logistics.</p>
<p>@BusyMei, I hope you won’t mind me hijacking your thread a little, but I wanted to ask if your son had any problems getting his visa for HK. We are still waiting for my son’s student visa. It seems to be taking forever. Thanks.</p>
<p>For US income tax when there is foreign income and foreign income tax involved, see IRS Form 1116 and Publication 514.</p>
<p>[Form</a> 1116, Foreign Tax Credit](<a href=“http://www.irs.gov/uac/Form-1116,-Foreign-Tax-Credit]Form”>About Form 1116, Foreign Tax Credit (Individual, Estate, or Trust) | Internal Revenue Service)</p>
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<p>I have noticed that when withdrawing currency from ATMs in foreign countries, doing so from an ATM of an affiliate bank resulted in no surcharge on the currency conversion rate, but doing so from an ATM of an unaffiliated bank resulted in a 3% surcharge.</p>
<p>@ucb, a conventional HSBC bank account in country X is not the same bank account as your HSCB account in country Y. They are two separate unique bank accounts. That’s the only point I was making. </p>
<p>To have a single unique bank account where you deposit the money in country X, and it shows up in your balance in country Y is a special kind of account. You must park a sizable amount of money to have that ease of int’l access to you money. The last time I checked (a year ago) for HSBC it was USD 20k. The threshold could be different now.</p>
<p>If you are in the country for a few weeks, using ATM’s & credit cards is the sensible way to deal with restaurants and hotel bills. For longer stays, the disadvantage of not having a local bank is that for large transactions like paying the rent, one will have to pay in cash or via int’l wire transfer because most landlords don’t accept VISA or Mastercard.</p>
<p>@BusyMei,</p>
<p>Make sure your S understands all the tax implications BEFORE he goes to HK; otherwise, he will have a nasty IRS surprise come April 15th. The HK income tax rate is low, so he should not think that that is all he owes.</p>
<p>Because his internship is only 3 months, he will not meet the IRS’s one-year threshold to be categorized as a ”bona fide resident of a foreign country”. So he will not be eligible for the foreign earned income exclusion. Therefore, he will owe both HK and U.S. income taxes on his HK earnings. It doesn’t matter to either the HK or the U.S. tax authorities what country the salary is paid—the taxman in both countries wants his cut. Your S will however, as ucbalumnus points out, be able to take advantage of the IRS Foreign Tax Credit to reduce some of his U.S. tax burden.</p>
<p>@axw
Yes HK visa is another issue, so many issues :(</p>
<p>S applied back in Mar/Apr. His company had to withdrawal the first app because he doesn’t have enough skill/experience to qualify for a work visa. S re-applied a couple weeks ago for a training visa. It is suppose to take about 6 weeks. We will see!</p>
<p>In the mean time, he doesn’t want to book his flight or look for housing until his visa is approved.</p>
<p>@ucbalumnus, GMTplus7
Thanks for the tax info. S is not going to be happy if he figures out that he might owe both HK and US taxes. Ouch!</p>