L-1 financial guide: money across two countries

You are moving to the US on an L-1A (manager or executive) or L-1B (specialized knowledge) transfer within a company you already work for. The visa is mostly your employer's problem. Your money is not — and the L-1 is the one work visa where the biggest financial decisions happen before you land, because you arrive with a whole financial life already running in another country: a salary history, a pension, savings, maybe a mortgage, and a tax authority that still thinks you live there.

The timeline shapes everything. USCIS grants most L-1 workers an initial stay of up to three years (one year if you are opening a new US office), extendable in two-year blocks to a ceiling of seven years for L-1A and five for L-1B. Long enough to build real US assets; short enough that you cannot assume you will stay. Plan for both.

The two-country problem: residency, treaties, and accounts at home

The US decides tax residency by counting days under the substantial presence test — your visa category does not settle it. Once you pass, you are taxed on worldwide income from your residency start date; the part of the year before that is taxed on US-source income only. That split year is a dual-status year with its own return. Read resident vs nonresident for tax purposes and run your arrival date through the substantial presence calculator.

Your home country may keep treating you as resident too, especially if family, home, or an employment contract stayed behind. If it has an income tax treaty with the US, the treaty's tie-breaker rules decide where you are resident for treaty purposes, using tests such as where your permanent home is and where your personal and economic ties are closest. Claiming to be a treaty nonresident of the US is a formal position taken on Form 8833 with a Form 1040-NR — settle it in your first quarter with someone who knows both systems, not in April.

From your residency start date, every account you hold outside the US is reportable under two separate regimes. The FBAR goes to FinCEN, not with your tax return, and is triggered when the combined value of your foreign accounts crosses a low threshold at any point in the year — a bar most transferees clear with one savings account. FATCA reporting (Form 8938) goes with your Form 1040 and has higher thresholds that depend on filing status. You may owe both; neither is a tax, and both carry heavy penalties for silence. Inventory every account, pension, and policy at home in month one, and read the FBAR guide and the FATCA guide now.

Relocation packages and tax equalisation

An L-1 package often includes a relocation allowance, temporary housing, shipping, flights, and sometimes a housing or cost-of-living top-up. Treat all of it as pay. Since 2018 the US has not let most employees deduct moving expenses, and moving costs your employer pays or reimburses go into taxable wages; the 2025 tax law made that permanent, leaving only a narrow exception for military and certain intelligence-community moves. Expect the relocation line on your W-2, and expect withholding to bite in the month it is paid.

Many transferees are tax equalised: the company promises you will pay no more tax than you would have at home, deducts a hypothetical tax from salary, and settles your actual US and home liabilities itself. It is a genuine benefit, but read the policy. Equalisation usually covers company income only — investment income, rental income, and a spouse's earnings are often excluded. Ask what happens to the calculation if you localise or leave mid-year.

US payroll or seconded: withholding and Social Security

How you are paid decides who withholds what. On US payroll you get a W-2, set federal withholding on a W-4, and pay Social Security and Medicare (FICA) on every paycheck. If you are seconded — still employed and paid by the home entity, with the US entity running a shadow payroll to report your wages — the US tax is still due, but the mechanics differ and mistakes are more common.

Social Security is the piece people miss. The US has totalization agreements with a number of countries. Where one applies, a worker sent temporarily to the US by a home-country employer can usually stay in the home social security system and be exempt from US Social Security and Medicare tax, provided the home agency issues a certificate of coverage that you give to your US employer. Without an agreement — or once you move to a local US contract — you pay into the US system. Ask in week one: is there an agreement with my country, and does my assignment use it? For take-home estimates on any W-2 salary, the H-1B tax calculator works for L-1 pay too.

Banking basics: credit from zero and sending money home

Your credit record at home does not travel. US lenders cannot see your history there, or your salary until it shows up on a US pay stub. The fix is mechanical: get your Social Security number, open a US checking account, get a starter or secured card, keep balances low, and let time pass — the sequence is in how to build US credit as an immigrant. Do it in month one; a thin file means larger deposits on apartments, cars, and phones now, and a worse mortgage rate later.

Most transferees keep paying something at home — a mortgage, family support, a pension. Set the channel deliberately; bank wire defaults are usually the most expensive route. Compare total cost, including the exchange-rate margin, with the remittance fee calculator, and see send money abroad for the options.

401(k) with a match, or the pension you left behind?

If your US employer offers a 401(k) match, take the full match from your first eligible paycheck. It is the highest guaranteed return available to you, and it stays yours, subject to vesting, even if you leave the country. Whether to go beyond the match depends on how likely you are to stay; if there is a real chance you leave within a few years, read what happens to your 401(k) if you leave the US first — the account can usually stay invested, but the tax on withdrawing it early is severe.

Continuing your home pension from US salary is rarely as simple as it looks. The US may not recognise the home plan's tax deferral unless a treaty says so, which can make your contributions and the plan's growth taxable here, and you lose home tax relief once you are no longer tax resident there. For the wider picture see investing on a visa and the Roth IRA guide.

L-2 spouses: work authorisation is automatic

USCIS treats the spouse of an L-1 worker as employment authorised incident to status, and since 30 January 2022 has admitted L spouses with the L-2S code on Form I-94. An unexpired I-94 with that code is acceptable evidence of work authorisation for the Form I-9 every employer completes at hiring. Your spouse can still apply for an Employment Authorization Document on Form I-765 if they want a card, but they do not need to wait for one. Check the I-94 code on entry; if it reads L-2 without the S, get it corrected before the job hunt starts.

A second income changes the plan more than the numbers. Once you are both residents, married filing jointly is usually available and usually better, but two W-4s need coordinating or you will under-withhold. Your spouse needs their own Social Security number, credit file, and retirement account, and their home accounts join your FBAR and FATCA inventory.

Plan as if you might stay: the EB-1C route

L-1A managers and executives have the most direct route to a green card of any temporary worker. The EB-1C category for multinational managers and executives rests on the same core facts as your L-1A — at least one year of employment with the company abroad in the three years before the petition, and a qualifying relationship between the US and foreign entities — and your employer files Form I-140 with no labor certification. Not every company sponsors, but the odds are good enough that your money planning should assume permanent residence is possible.

In practice: do not cash out home accounts in a hurry, keep every record from year one, avoid moves that only make sense on a three-year horizon, and understand what permanent residence does to your taxes — worldwide income for as long as you hold the card and, after enough years, an exit tax if you give it up. That story is in the green card financial guide.

Your first 90 days

1. Confirm your payroll model (US payroll or seconded) and ask whether a totalization certificate of coverage applies to you.
2. Get your Social Security number, open a US checking account, and set up direct deposit.
3. Read your relocation and tax equalisation policy; ask HR for a net-of-tax illustration of every allowance.
4. Work out your residency start date and whether a treaty tie-breaker applies; decide who prepares your first return.
5. Inventory every account, pension, and policy at home for FBAR and FATCA.
6. Enrol in the 401(k) at least to the match; decide what happens to your home pension.
7. Check your spouse's I-94 says L-2S and get their Social Security number.
8. Open a starter or secured card and choose a remittance channel.
9. Start a US emergency fund separate from home savings — an assignment ending early is your biggest financial risk.

Other guides on this site

This page is the overview. Each of these goes deeper:

• L-1 visa requirements and process — eligibility, the blanket petition, and timelines, if the transfer is still ahead of you.
• Resident vs nonresident for tax purposes — the residency rules this whole guide leans on.
• Green card financial guide — what changes the day permanent residence arrives.