Home » Expat Focus Financial Update 15 August 2016

Expat Focus Financial Update 15 August 2016

Expats rate the best countries for weather

Among the many reasons for moving overseas to live and work is to enjoy a better climate; a new survey reveals which are the best countries for expats looking for this.

The survey was conducted by expat network InterNations who asked 14,000 expats who live in 195 countries what they thought about their current weather.It appears that expats prefer to work and live somewhere that has lots of sunshine but not necessarily hot temperatures.

Scoring highly were sunny spots in Europe, Africa and South America, though colder places in some parts of North America and Asia also scored quite high.

The survey also revealed that the British place better weather high on their list of reasons for moving overseas with 45% of them saying it was an important factor. That’s an incredible 16 percentage points higher than the global average.

The Brits were not alone in their desire for better weather with 41% of Swiss expats, 39% of Irish expats and 38% of Belgian expats all placing better weather at the top of their list for taking up new opportunities.

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A spokesman for InterNations said: “The survey reveals that depending on where an expat comes from, they do not always prioritise factors such as job security and safety over soft factors including climate and weather before they move to another country. Sometimes, it’s the other way around.”

The top 10 countries for expats looking for better weather sees Costa Rica taking the top spot, followed by Cyprus, Greece, Malta and then Uganda. The rest are Kenya, Spain, South Africa, Mexico and Portugal.

The worst 10 countries for expats wanting better weather sees Finland in bottom place, despite scoring highly in most expat surveys for quality of life, followed by Sweden, Russia, the United Kingdom and the Netherlands. The rest are Luxembourg, Denmark, Kuwait, Ireland and Belgium.

Bank rate cut hits retired British expats

The move by the Bank of England to reduce interest rates from 0.5% to 0.25% will hit retired British expats living in EU member states hard, say financial experts.

This is in addition to the fall in currency exchange rates after the EU referendum, with many pensioners seeing their savings having poor returns because of the low rates of interest.

Most expat retirees survive on a combination of the state pension, personal pensions and savings and a reduction in income, including currency movements which pushes up their living expenses, making it difficult to make ends meet.

Some British expats in Spain have calculated that their incomes have fallen by €500 every month because of the fall in currency exchange rates.

Meanwhile, a group of expats who live in Lauzun in France have launched a legal challenge for the UK’s Parliament to vote on the right to trigger Article 50 which would begin the process of leaving the European Union.

The group, which is called Fair Deal for Expats, has sought legal advice which states that Parliament must have a say before the process begins rather than the Prime Minister starting the process of leaving.

The group says that if Parliament votes on the move then they will have an opportunity to shape the debate and the circumstances under which they will be able to continue living overseas.

They point out that the issues facing expats have not been fully considered during the referendum debate and they are worried about losing rights to French schooling, healthcare and pensions and have several other issues regarding their status when living in the country.

The group is now one of six that is bringing a joint legal challenge and a hearing will take place in October at the High Court.

Belgium says Brits want citizenship

Meanwhile, Belgium is the latest country to reveal that many of its population of British expats is keen to claim citizenship.

With a population of 24,000 Brits who mainly work in the EU or with NATO in Brussels, growing numbers are finding out how to gain Belgian citizenship. Other Belgian cities say they have also seen an upturn in citizenship requests from British expats.

Germany says it has also seen a big spike in applications and now the country’s Green Party is urging a fast track system to enable British expats to become German citizens more quickly.

US expats still giving up citizenship

The latest figures from the US Treasury Department have revealed that more than 500 taxpayers have given up their passports or green cards in the second quarter of this year.

That’s a big fall from the 1,158 expats who gave up their citizenship in the first quarter.

However, the numbers of US taxpayers giving up their passport continues to rise and reached a record 4,279 people last year, a 25% increase on 2014.

One reason given for the rise in Americans giving up their citizenship is the growing activity of the Internal Revenue Service and Treasury to trace those Americans who have undeclared income and assets held abroad, particularly via the Foreign Account Tax Compliance Act (FACTA) which makes it more difficult for US citizens who live overseas to hide their money.

That’s because foreign financial institutions with US clients must now report the client’s details to the IRS.

Those citizens who give up their passport or green card have their details published in the Treasury’s Federal Register.

Saudi Arabia plans income tax

One of the main reasons for working in Saudi Arabia is to enjoy an income tax free salary package, but this may be coming to an end with the kingdom’s planned introduction of income tax.

The government has seen a huge fall in income from oil sales. Having slashed subsidies on utilities and fuel, it is now looking to reduce its public sector wage bill.

However, the kingdom has started a consultation process with a view to encouraging expats to remain rather than leave for other income tax free locations.

Also, in conjunction with other countries, Saudi Arabia is looking at bringing in a value added tax system from 2018 with food and healthcare being exempt.

New Zealand enjoys strong job growth

The number of jobs available in New Zealand grew by 3.1% in the second quarter of this year, a leap from the 2.2% recorded in the first quarter, according to the government’s statistics agency.

The drive in job growth was led by accommodation and food services followed by the construction industry and then health services.

Despite the good news on the number of jobs being created, annual wage growth is still very low – wages grew by just 1.5% in the second quarter which matches the level seen over the last three years.

A spokesman for Statistics New Zealand said: “Accommodation and food services saw 14,000 more jobs, that’s up by 11% on June 2015.”

Over the past year, there’s been a 6.8% growth in the number of construction jobs with 10,000 new positions, and there are 9,100 extra health care and social assistance positions. That’s a growth of 4.1% and there are 9,000 extra scientific, professional and support service jobs, a rise of 3.6%.

New Zealand’s Employment Minister, Steven Joyce, said: “Construction is at an all-time high and the trend will continue with wage growth increasing with a healthy margin over inflation.”

He added that the growth in the number of jobs highlighted the government’s commitment to creating an environment for encouraging businesses to invest and create opportunity.

Qatar's population falls with expat exodus

The population in Qatar is beginning to fall faster because of the numbers of expats leaving, according to the Ministry of Development and Planning.

The ministry says the population fell at a faster rate in July than the month before, with numbers dropping by 6% to 2.3 million people. In February, 2.54 million people were living in the country.

However, the ministry says the fall is not just down to expats leaving because they are out of work; many will be holidaying in their home countries and will return.

Expats warned: Don't leave traffic fines unpaid in Dubai

Authorities in Dubai have unveiled a plan to stop expats leaving the country if they have outstanding traffic fines.

The new Federal Traffic Council’s system will link details of any unpaid fine with the departure immigration counters in airports with ATMs located nearby for those who are caught and questioned.

The council says there are ‘many cases’ of expats who leave the country with their traffic fines unpaid and who do not return.

Alongside the boost in income, Dubai is pushing for expats to take more care when they are driving to avoid being fined; it appears that the practice of allowing fines to accrue until the vehicle licence is renewed is coming to an end.

Filipino expats get government help

The dramatic slowdown in Saudi Arabia’s construction sector has left thousands of expats without work and, increasingly, without pay.

Thousands of Filipinos employed by one construction firm in the kingdom have been handed financial help by the government after they went unpaid.

Now the government of the Philippines is offering grants to their expats who are either still living in the kingdom or who have returned to the Philippines to receive pay or their end of service benefits.

The government says its move is to ‘cushion the impact’ that expats have experienced with enforced employment and lack of income.

Indian government launches help for its expats

Meanwhile, as reported in last week’s round-up, the Indian government has continued its food distribution efforts to ensure that 10,000 of its expats do not go hungry.

The government is also aiming to help those expats without any money to pay for the air fare home.

The reason for so many unemployed expats struggling is that the government has stopped payments on major construction schemes with some of the biggest employers making its workers redundant; the Saudi Binladin Group says it has made 70,000 workers redundant from its 200,000-strong payroll.

In addition, 31,000 expats and Saudi workers with Saudi Oger have lodged complaints about non-payment of salaries with the country’s labour ministry.

UAE cost of living is high

Despite a fall in property rents with the slowdown in the UAE’s real estate sector, the overall cost of living there is still continuing to rise, according to a survey.

This rise is putting pressure on expats’ household budgets, with many pointing to the high cost of housing as well as rising utility bills and education costs.

Of those questioned, 64% said the cost of accommodation accounted for most of their income while 46% said increasing utility costs were affecting their lifestyle and 45% said the rising cost of school fees was a major concern.

With inflation rising in Dubai, it rose to 1.75% in the first six months of 2016, and added costs of nearly 4% for housing, electricity and gas as well as water bills means many expats are struggling.

However, 51 private schools in Abu Dhabi have now been given permission to increase fees by around 6% for the next academic year.

The cost of education is the second biggest source of expenditure for 40% of Arabs and for 42% of expats from Asia. For Emiratis it is the second biggest bill for 31% and for 30% of expats from the West.

In other news…

Plans by the UK government to scrap the 15-year rule to enable expats to vote in elections have already hit an obstacle. It’s been revealed that older voting data has been destroyed, which means many expats will not be able to prove that they have an entitlement to vote. The government says it is still committed to bringing in the new law by the 2020.

In a bid to appeal to younger voters, the Council of the Swiss Abroad (CSA) is going to broaden its electorate by granting expats, who are not members of Swiss associations or clubs, the right to vote in elections. Critics say the move would reduce the standing of 700 Swiss clubs dotted around the world though the council says just 4% of Swiss expats are members of Swiss clubs.

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