Home » Expat Focus Financial Update 16 November 2016

Expat Focus Financial Update 16 November 2016

Where can expats find the best salaries?

One of the main reasons for expats working overseas is to boost their income. The latest Salary Trends Survey has been published by ECA International.

Among their findings is that expats working in the UK will see the lowest salary increase in Europe in 2017 of around 0.3% down to the rise in inflation.Employers in the UK say salaries will rise next year by an average of 2.9%. The UK has now fallen nine places in the firm’s European rankings with expats working in the Asia-Pacific region earning more than any other region.

Salaries will rise by around 1.5% on average around the world after factoring in the impact of inflation.

ECA’s remuneration services manager, Mark Harrison, said: “The fall in the pound’s value since the Brexit referendum will contribute towards higher living costs and see real wage increases drop to just 0.3% in 2017 which compares with 1.9% wage increases seen this year.”

The firm’s data is based on information from 260 multinational firms spread across 72 countries which reveals that the average salary in Europe will grow by 1.3% on average next year, down from the 1.8% rise seen this year.

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Expats working in Russia will enjoy the largest real wage increase with salaries rising by 3% and inflation falling to 5%.

The European country with the lowest salary increase look sets to be Ukraine with a 1% fall.

Expats in Belgium and Norway are the only other countries where employees will earn more next year than they did in 2016 though wages around the globe will rise by 5% on average next year. That’s up slightly from 2016’s increase of 4.8%.

Indeed, employers in Argentina are predicting pay rises of 27% though the country has inflation predicted to be 20.5% next year, while in Canada employers are predicting a real wage rise of 0.9% and in the US firms predict 0.7%.

Real wage increases will also be seen in the Middle East and Africa of 0.5% on average though expats working in Egypt will be 8.2% worse off next year.

Expats in Asia-Pacific will see a 2.6% increase next year which is the highest real wage increase of all regions surveyed. Within the region, expats in Vietnam will see salary rises of 5.4% and in China there will be 7% salary increases – though the real wage increase after inflation will be 4.7%.

The global top 10 for real wage increases puts Argentina in first place, followed by Vietnam, India, China and Indonesia. The top 10 is made up of Cambodia, Thailand, Bangladesh, Saudi Arabia and then Russia.

Americans look for expat opportunities after Trump win

The Canadian immigration website crashed several times in the hours after Donald Trump was declared the presidential election winner. The result prompted many Americans to look for expat opportunities.

In recent weeks many Americans had been joking that they would flee the country if Trump did win and the Canadian immigration site saw several outages as Trump took the lead in several key states.

However, Americans aren’t just looking to Canada for opportunities, with New Zealand’s residency visa website also seeing a spike in traffic from American visitors in the hours before Donald Trump claimed victory.

New Zealand says it has seen a 50% increase in registrations and an 8% increase in website visits.

In addition, Google has also revealed that the number of Americans searching for information on how they can move to Canada has spiked during the election campaign, with a 20% increase on those making real estate enquiries.

UK unveils new visa rules

New rules for the UK’s immigration system will begin from 24 November, the government has announced.

Among the changes are for Tier 1 Entrepreneur and the Tier 2 points-based system – including a time limit of 28 days for responding to a request for more information being reduced to 10 working days.

In addition, the salary threshold for Tier 2 (General) has been increased to £25,000 for experienced workers but there are limited exemptions up to July 2019.

Among those being exempt until that deadline are experienced nurses at which point employers must carry out a test to see if a British citizen can be employed before hiring from overseas.

For ICT applicants, the minimum salary has been increased to £30,000 for all new Tier 2 (Intra Company Transfer) applicants. The skills transfer category is also being closed to all new applicants.

There are more changes planned from next April which may include introducing a skills charge per migrant worker and increasing the salary threshold for experienced workers to £30,000.

US expats still renouncing citizenship

The number of Americans renouncing their US citizenship has reached its second highest ever figure in the third quarter of this year, the US Treasury Department is reporting.

The number has now reached 1,380 with the biggest reason for the trend being the Foreign Account Tax Compliance Act (FATCA) which is aimed at finding US taxpayers with offshore bank accounts and assets. Some US expats are also renouncing their citizenship because of global tax reporting requirements.

There are now, apparently, more than 18 times as many people renouncing their citizenship as there were in 2008.

Renouncing US citizenship is not cheap; the government charges $2,350 for the applicant to hand in their passport. The government has collected more than $12 million in free since 2014.

Indian expats caught out by currency clampdown

Indian expats, particularly those in the GCC, have been caught unawares after their government announced it was withdrawing large denomination banknotes from circulation.

The Indian government says the move to ban 500 (£5.90/$7.60) and 1,000 rupee notes is a bid to fight tax evasion and corruption but it has left many expats high and dry since money changers have refused to accept the currency.

Among those being quoted by Indian news sites is one Hong Kong based forex trader who says his company has around 10 million Indian rupees it no longer knows what to do with.

In addition, in Singapore where there is a large Indian community of expats many of them say they are holding rupees but have been unable to exchange them for other currencies.

The limit Indians can take out of the country has been raised to 25,000 rupees but the currency rate has fallen to reach a new record low.

However, anger is rising in India about the move and authorities have now had to increase the amount of cash that can be withdrawn from ATM’s to 2,500 rupees from 2,000 per day. Withdrawals from banks have been raised to 10,000 rupees a day.

The 500 and 1,000 rupees currency notes account for 80% of the currency in circulation and will disrupt a large part of the country’s cash-driven economy.

Indian expats need to be aware that the deadline for exchanging the notes is 30 December.

Expats in Oman must not be paying employer visa fees

The government in Oman has warned employers that they cannot force their employees to pay the new employers’ visa fees.

The warning comes a week after the country announced the visa fee for expat workers has increased to OMR301 from OMR201.

Now some expat workers and trade unionists are expressing fears about workers, particularly blue-collar expats, who could be forced to pay the new fees by their unscrupulous employers.

The country’s chamber of commerce said it’s difficult for the government to incorporate the illegality of forcing employees to pay their employer’s visa fee but ‘it is an illegal act’.

One leading trade union leader says any employer who does pass on the visa fee to the employee will be committing a violation and they need to appreciate that if they need an expat worker then they have to pay the necessary fees.

One reason for the hike in fees is to boost government coffers and with nearly 1.5 million expats currently working in the country, the government is expected to earn around OMR148 million over the next two years.

The government has also announced a budget deficit for the first eight months of this year of $11.4 billion.

In other news…

US LGBTQIA+ citizens who are thinking of leaving the country to live and work overseas could, according to one TV news network, head to a variety of countries that are more friendly to their sexualities. They include Argentina, Belgium, Canada, Denmark and France.

Expats in Beijing are being encouraged to explore areas around the capital city with organised suburban tourism trips. More than 50 expats from 10 countries took part in an organised day trip to enjoy the sights – the first of many being organised by tourism bosses for expats.

British expats around the world are probably reeling from the news that popular store Marks & Spencer is closing 100 outlets worldwide. Among them is the French flagship store on the Champs-Elysees though there will still be food outlets available in Paris. Along with Brussels and the Netherlands, all the stores will also close in China and there are closures in Hong Kong, Lithuania, Hungary and Poland.

The Canadian government has issued a warning that new rules from 10 November mean that anyone travelling to their country must have with them the appropriate travel documents. The new electronic travel authorisation (eTA) system will now be enforced to prevent people who will be refused entry from travelling there. While Canada still has agreements over visas with many countries, those who do not normally require one for travelling to the country will need their eTA before they can board a flight.

The number of expats working in Kuwait has now reached 2.14 million and account for 60% of the country’s population.

Finnish expats living in Portugal are facing the prospect of paying tax after a new bilateral double taxation treaty was signed. The move will see the Finnish tax authority tax a wider range of incomes including pensions, of all Fins who live in Portugal after moving there to enjoy generous tax incentives. Portugal currently offers a 10-year tax holiday for all expat retirees who meet certain criteria.

The government in Saudi Arabia has announced that workers who run away from their sponsors will never be able to return to the kingdom after being given ‘Huroob’ status. The expat will also be fined and then deported. Last year, around 480,000 expats were deported from Saudi Arabia and 16,000 Saudis and expats fined for transporting or sheltering illegal expats.

Expats working in New Delhi will have realised that the worst smog in 17 years has now lifted but the ramifications are still being felt. Some employers are offering extra health assistance while others are planning to leave the city and some are offering more opportunities to work from home. News outlets reported that lots of expats fled the city when the smog was at its worst.

Expats in Shanghai will be unable to smoke in public places after local authorities banned the practice – the law is scheduled to come in next March. The move follows in the steps taken by Beijing several years ago and now covers public and workplaces such as restaurants and hotels with smoking rooms in Shanghai’s railway station and airports already closed.

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