UAE is among top financial locations for expatriates

Russia, the UAE, Qatar, Saudi Arabia and Hong Kong are top five financial locations for expatriates and France is the least popular, showed a global survey.

In the ranking table featuring 26 countries, Russia took the first place due to the number of expats saving being more, high annual salaries and the amount of disposable income available, according to the survey titled, Expat Explorer, conducted by HSBC Bank International.

Qatar is placed at the second place, Saudi Arabia third, Hong Kong fourth, the UAE fifth and Singapore at the sixth place.

America ranked 17th on the table, the UK 19th and France was at the last.

Paul Say, Head of Marketing and Communications for HSBC Bank International, said: "We have tried to be as fair and represent the experiences of expats as impartially as possible by using several different measures to create the 'top financial locations'."

"It is not just based on earnings. We used four different factors – ability to save, possession of luxury items, annual income in excess of $200,000 (Dh734,460), and disposable income in excess of $3,000," he told Emirates Business.

The first of three installments of this year's survey, Expat Economics, showed the UAE once again as a top financial location for expats. "The UAE continues to be a top financial location as it is clear that people in Dubai can still continue to enjoy a good lifestyle. They continue to have good disposable income as well as good savings," Say said.

The survey said UAE expats continue to have high disposable incomes and save more, while emerging markets rank above established centres for expat finances.

The UAE comes out as an ideal financial location for expats, with more respondents (87 per cent) reporting an increase in their monthly disposable income after moving to the UAE than those (74 per cent) moving to other countries.

More than half (56 per cent) of the respondents in the UAE reported a disposable income of more than $3,000 per month.

In the Middle East, Qatar and Saudi Arabia were also top locations for expatriates.

"As with our 2008 survey, we are generally seeing that although expats are spending more in their new countries of residence, they are also saving more," Say said.

"There is no doubt that we have seen some interesting trends in terms of how expats are reacting to the credit crunch, but what is also interesting to see is that they remain to be a wealthy group of individuals. More than half of the expats surveyed are actually earning $100,000 and above – no mean feat particularly in the current climate."

The survey also said that globally the current economic crisis has had a significant impact on expats' financial situation.

The survey of 3,100 expatriates from more than 50 countries showed the credit crunch has changed their lives and they have reduced spending across the board, with the UK and the US identified as having the greatest number of expats considering moving back to home.

The main reasons for choosing to return home included limited career prospects (28 per cent), reduced value for money (19 per cent), inability to afford as good a lifestyle (16 per cent) and reduced length of contract (15 per cent).

However, despite the credit crunch, a resounding 85 per cent of expats said they would not return to their native countries.

When asked if the credit crunch had changed their attitude to spending, 63 per cent of expats worldwide said "yes".

The most affected expats are based in Russia, the US and Japan with 73 per cent, 74 per cent and 76 per cent of expats from these countries respectively saying the credit crunch has changed their attitudes to spending and saving. Surprisingly, almost three-quarters (72 per cent) of expats based in Thailand also reported that global recession has had an impact on what they spend despite reporting that Thailand is one of the cheapest places to live compared with other locations.

Two-thirds (63 per cent) of expats living in Qatar said the credit crunch would not change their attitudes at all.

Expats living in Bahrain were also unwilling to let the latest economic doom and gloom affect their lives with 55 per cent saying that their attitude to spending would not change. This indicated that the Middle East has not been hit as hard by the credit crunch as other regions, said the study.

When asked how they have changed their lifestyles, more than half (60 per cent) of expats worldwide said they have cut down on luxuries, 54 per cent said they cut day-to-day expenses and 36 per cent stated they were saving more [for a rainy day]. Only two per cent of expats said they planned to spend more this year than previously.

Interestingly, expats living in Canada and Saudi Arabia were most inclined to spend rather than save – almost one in 10 reported this behaviour.

In the UAE, more than two-thirds of expats said their attitudes to spending had changed as a result of the economic crisis. However, more than three-quarters of expats (82 per cent) living in the UAE also said they had not considered a move home.

Two-thirds of expats in Qatar (63 per cent) said their attitude to spending had not changed as a result of the crisis.

Many expatriates have taken advantage of their current location to increase the amount of money allocated to savings.

More than two-thirds (68 per cent) of expats said they are saving and investing more since they moved away from their home country – this figure rises to 80 per cent when looking at the highest-paid expats. Only 14 per cent of expats said they are saving less than when they were residing in their countries of origin.

Expats in the Middle East are strong savers, with the UAE ranking fifth (after Saudi Arabia, Russia, Qatar and India) as a country where expats are increasing their savings. The UAE and India were also top countries to save in the 2008 Expat Explorer report.

The UAE respondents said they save more now than prior to their move (82 per cent vs 68 per cent overall) with 49 per cent of expats having invested in managed funds.

Savings accounts were the most popular choice for expats in the UAE, with more than two-thirds (69 per cent) stating they chose to allocate their money this way.

Expats in the UK were the worst savers/investors globally, with more than a quarter of them living in the UK (27 per cent, the highest recorded in the survey) saying that they had reduced their savings and investments when compared to their home country.

Savings accounts are also the most popular way to save for expats across virtually all markets, with the exceptions of Mexico, Malaysia, Japan and South Africa.

Aside from the usual bank accounts, popular methods for saving and investing money among expats include, shares, property and managed funds. Property was a popular option in Bahrain and South Africa (68 per cent and 73 per cent of expats in these countries chose to put their money in bricks and mortar), while 68 per cent of expats in Japan chose managed funds.

The collapse of global markets has left investors in Asia undeterred. However, shares are still proving popular for expats in Hong Kong, Japan and Malaysia.

Expats originating from Germany and Brazil are the most reluctant to invest in property, just 21 per cent and 22 per cent put their money here, compared with 46 per cent global average.

According to the survey, Asia is home to the highest paid expats in the world, with one in four expats (25 per cent) earning more than $200,000 per year.

The highest proportion of expats earning more than $250,000 are in Russia (30 per cent), followed by Hong Kong (27 per cent), Japan (26 per cent), Switzerland (25 per cent) and India (25 per cent) compared with a global average of 16 per cent.

As well as commanding high salaries, expats in Asia further recession-proof themselves by scaling back on the luxuries.

Expats in Japan (ranking first, 54 per cent), Thailand (second, 51 per cent) and Hong Kong (third, 49 per cent) scaled down their spending on luxury items, such as holidays and leisure activities.

Asian countries are among the cheapest for accommodation, with expats in Malaysia, China and India finding accommodation much cheaper than they did living in their countries of origin. In these countries, 50 per cent, 49 per cent and 43 per cent respectively allocate much less of their income towards accommodation, compared with 26 per cent among expats globally.

Individually, the survey identified Russia, Japan, Qatar and the UAE as among the top countries for wealthiest expats, defined as an annual income in excess of $200,000 and a monthly disposable income in excess of $3,000.

The UAE expats also claim to have a marked improvement in possessing "luxury items" – 62 per cent of respondents said they employed at least one member of staff and 55 per cent own more than one car.

Belgium and Australia are home to the least wealthy expats, with almost two-thirds (61 per cent) of expats in Belgium and 63 per cent of expats in Australia stating that their annual salary was $100,000 or less. This compares to an average figure of 35 per cent across all expats surveyed.

Almost three-quarters (74 per cent) of expats surveyed said they have more disposable income than they did living in their country of origin. Almost all expats in Qatar (94 per cent), Russia (97 per cent) Saudi Arabia (98 per cent) and the UAE (87 per cent) have more disposable income than they did living in their home country.

Food and accommodation have seen the largest increase in spending for expats.

More than two-thirds (67 per cent) of expats spend more on accommodation than they did before moving to the UAE.

More money is allocated to holidays by expats in the UAE, (66 per cent), with transport standing out as an expenditure that has dropped. More than half of them in the UAE (51 per cent) said they now spend less money on transport than in their home country.

The UK remains one of the most expensive places for expats to live and the recession has taken its toll. It emerged as an expensive destination in many categories compared with life in their home country. High proportions of expats in the UK claim they now spend more on their accommodation (79 per cent), transport (68 per cent), holidays (62 per cent), utilities (61 per cent) and entertainment (58 per cent).

Expats in the UK spend more of their income on accommodation than expats living anywhere else in the world with 85 per cent of UK-based expats ranking their home as their greatest expenditure.

According to the survey, France was the worst-rated location for an expats' finances. More than half of the respondents in France revealed their income was less than $100,000. One-third of respondents (31 per cent) also said they had less disposable income when compared with their home country, with more than three-quarters (77 per cent) answering they had less than $2,000 disposable income per month.

France was also reported to have fewer expats saving, with only just above a third (39 per cent) saying that they invested more than their country of origin, the lowest recorded figure in the survey.

However, France remains a popular retirement destination. More than a quarter (28 per cent) of expats in France are retirees, compared with the global average of seven per cent.

To view survey, click here. 

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