When moving abroad, one of the less obvious but most important considerations is the network of bilateral agreements that exist between countries. These agreements can shape everything from your tax obligations to your work opportunities, and they play a particularly significant role for Eligible Family Members (EFMs) of U.S. government employees as well as for independent expatriates.
Understanding Bilateral Agreements
A bilateral agreement is essentially a contract between two countries that outlines specific rights, responsibilities, or cooperation in certain areas. Unlike broad international treaties, these agreements are tailor-made between two governments to address shared needs.
Common types of bilateral agreements relevant to EFMs and expats include:
- Work agreements: Allowing spouses or dependents of diplomats and government employees to legally work in the host country.
- Social security agreements: Coordinating retirement benefits so you don’t lose contributions when working across borders.
- Tax treaties: Preventing double taxation on income earned while abroad.
Each agreement is unique—what exists between the U.S. and France may not look anything like what exists between the U.S. and Japan.
The Impact on Eligible Family Members (EFMs)
For EFMs, bilateral work agreements are particularly critical. Without them, a spouse or dependent might face restrictions on employment in the host country, even if they are fully qualified and ready to work. Where agreements are in place, EFMs can usually apply for a special work permit or authorization, giving them access to the local job market.
This can have a profound effect on family life abroad. The ability to work not only contributes to household income but also provides continuity in careers, professional development, and social integration.
The Impact on Expats More Broadly
For expats outside of government service, bilateral agreements matter most in terms of taxation and social security. For example:
- A tax treaty may prevent an individual from being taxed twice on the same income.
- A social security agreement ensures contributions made in one country can be recognized in another, protecting retirement eligibility.
Without these agreements, expats can face financial strain, duplicate taxes, or the risk of “losing” years of social security contributions.
Why This Matters
The existence—or absence—of a bilateral agreement can fundamentally shape an expat experience. For EFMs, it may mean the difference between being able to work and having to put a career on hold. For independent expats, it can determine whether their overseas years are financially sustainable and secure.
Because these agreements differ country by country, it’s always wise to research ahead of time before an assignment or move. Consular offices, HR at embassies, and professional tax advisors are usually good places to start.
Final Thoughts
While the concept of a bilateral agreement may sound technical, its impact is deeply personal. These agreements can empower EFMs to thrive in their host country and help expats protect their livelihoods. Understanding them is not just a matter of policy—it’s a key step in making life abroad smoother, fairer, and more rewarding.