Home » Expat Focus Financial Update 18 July 2016

Expat Focus Financial Update 18 July 2016

Expats in UK express fears for future

The fallout from the Brexit vote for the UK to leave the European Union continues, with reports of growing concerns among expat workers living in the United Kingdom.

Their fears grew after Theresa May was questioned during her campaign to be Conservative leader and she refused to guarantee the immigration status for millions of Europeans who currently live in the UK.Since the announcement, the new Prime Minister has announced that they can stay on condition that the 1.2 million British expats living in the European Union are treated in a similar fashion.

However, that position has been criticised by MPs who say that Mrs May is ‘undermining family life in the UK’. They also expressed worries that millions of EU citizens may be subject to a mass deportation.

Among the opportunities for expats of most nationalities is the announcement that France has introduced tax breaks to attract bankers from the City of London to relocate to Paris.

The country’s prime minister, Manuel Valls, said the government was intent on creating a financial capital for the future and said that France had a favourable tax regime for expats as well as for French nationals who were returning home. The tax breaks would be applicable for their first eight years of living and working in France – an increase from the five years currently available.

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In addition, schools in Paris have also announced that expat families could benefit from as many extra classes that need to be created to cater for their children to work in their native language.

Property market in Sydney in the doldrums

Expats working in Sydney are being warned that the housing market is in the doldrums and it’s likely to remain depressed for the next two years.
In addition, property experts are warning that apartment prices will slip by up to 20%, and house prices by 10%, if interest rates are not increased next year.

One newspaper has already recorded that most areas in the city’s suburbs have seen a drop in house sales activity compared to 18 months ago.

The fall in house sales follows a housing boom which has seen a strong growth in sales and prices over the past three years.

Australian expats returning home after the Brexit vote

Meanwhile, another report says that Australian expats returning home after the Brexit vote may lead to a surge in demand and help boost property prices.

While the Brexit vote has hit share prices and led to a weakening of the Australian dollar, experts say it has also made Australians think twice before moving overseas and is helping to boost their population as a result.

Now financial firm Macquarie says that the fall in the value of sterling means it’s a less attractive destination to live and work in for the 100,000 Australian expats currently in the country.

And with the pound’s value continuing to fall, expats who decide to return to Australia will still be able to afford property, the experts add.

Saudi health system relies on expats

A report from Saudi Arabia’s Central Department of Statistics has revealed that expats hold 91% of the healthcare professional jobs in private hospitals; in state-run hospitals, the proportion of expats is 41%.

The report reveals that there are nearly 255,000 expats working in healthcare in private hospitals in Saudi Arabia with most of these hailing from Asian countries.

The number of Saudis working in private hospitals is 9%; of the doctors in private hospitals, just 3% are Saudis and in public hospitals, 29% of doctors come from Saudi Arabia.

In the private sector, the number of Saudi healthcare professionals is 8,835 while the number of expats is 99,600.

Saudi Arabia could raise work permit fees

It is being reported that the Ministry of Labour and Social Development is raising the possibility of increasing work permit fees for expats. The ministry says the move would benefit Saudi citizens who are having to compete for jobs with expats.

The new fees have yet to be agreed and the Ministry is examining how the increase would impact on the Kingdom’s labour market.

A spokesman for the ministry told one newspaper: “We are keeping our options open to address our labour market problems which are different from elsewhere in the world. Everything is open to negotiation.”

Other proposals being discussed include the closing of all shops by 9pm. However, a move to introduce a two-day weekend for Saudi employees, but not expats, who work in the private and public sectors has been shelved after critics said it would be an embarrassment for the country and would run contrary to the international agreements on discrimination the Kingdom has signed up to.

There’s also a proposal to reduce the weekly working hours requirement from 48 to 40 and the ministry is asking employers what the potential impact would be for costs and productivity.

Japanese expats leave Shanghai

According to one Japanese newspaper, the Japanese expat community in Shanghai is shrinking with many being priced out of the city and forced to return home.

Now the owners of apartments who used to rent to Japanese expat workers and their families are selling their properties. Golf clubs, a popular sport hangout among Japanese expats, are also beginning to close down.

Apparently, many Japanese expats living in the centre of Shanghai are finding it difficult to renew their apartment leases and, in many cases, owners are selling to Chinese developers who are then planning to refurbish and sell the properties to local people.

One reason for the demise is that Japanese employers are no longer willing to help meet the fast-growing accommodation costs for their employees, which means that Japanese expats are finding it difficult to live on their salaries and are leaving Shanghai as a result.

Number of low-skilled expats booms in Kuwait

Concerns have been raised about the number of low-skilled expat workers in Kuwait, with many of them being employed by other expats who are usually family or friends, according to one newspaper report.

The expat workers are arranging speedy visa transactions for their family and friends from their home country, which boosts the number of low-skilled labourers currently living and working in the country.

The findings are revealed in a report by the International Organisation for Migration which conducted interviews with expats, employers and community groups.

The report finds that expats are ‘misusing’ their social networks in a bid to persuade their employers to hire friends and family from their home country, even when they are under qualified for a job.

This means there is a growing ‘mismatch of skills’ between the demands of Kuwait’s labour market and the skillset of incoming expat workers.

The report also recommends that Kuwait create a new expat worker permit system in a bid to boost employment prospects for Kuwaiti nationals.

New RP card required by expats in Qatar

Qatar’s Ministry of Interior is warning expats they need to carry their Residency Permit (RP) card with them at all times, particularly when they are entering and leaving the country. It must also be produced when demanded by relevant authorities. The Ministry says the new RP card is an expat’s ‘identity proof’ and is a valid residency document for Qatar.

For those expats who have lost their RP card, they will be allowed to enter Qatar but with a return visa issued at the port of entry. The lost permit will be recorded as such on the government’s immigration system.

Expats express fears over new health insurance policies

A move by Abu Dhabi to alter its health insurance policies has led to low income expats expressing concerns that the new costs are unaffordable.

They are also worried that the extra costs will be imposed upon them by their employers or sponsors.

The fears have been raised after the Health Authority Abu Dhabi (HAAD) announced the increased health costs, which are aimed mainly at those workers aged over 40 who are currently covered by the country’s Basic Plan.

The premium for sponsors has now increased to Dh800, with these sponsors now able to charge employees who are aged over 40 an additional Dh400, unless they are sponsored by an Emirati or are domestic workers in a household.

UAE expats remitted $1.4 billion in Eid

With more than 80% of the United Arab Emirates’ population consisting of expat workers, currency exchange experts say that $1.36 billion was remitted to home countries when Ramadan ended.

Money transfers grew by 20% compared to last year’s Eid celebrations and experts point to incomes rising over the past year and a rise in currency values for the dirham.

Most of the money was committed to many Asian and Arab countries and one exchange said there had been ‘huge growth’ in transactions; the daily amount being sent via one exchange was three times the usual daily amount.

In addition, the currency exchanges say there’s been a rise in dollar rich British expats working in the UAE buying large amounts of sterling which fell against the dollar sharply after the Brexit vote.

Oman downturn reflected in housing market

One of the side effects of Oman’s economic downturn for expats is that the residential market there is seeing rents falling to meet with demand.

A housing index reveals that in the first quarter of this year demand for rented homes, particularly larger houses, has fallen by nearly 13% compared to the same period last year.

The decline reflects the drop in the number of expats as firms reduce numbers and also housing allowances, says consultancy PKF.

In addition, the number of homes being sold in Oman has been affected and reflects a drop in disposable household incomes, with vendors having to drop prices to attract buyers.

However, the consultancy says that the shopping malls in Oman are doing quite well, particularly the newer shopping centres, with new builds and extensions being announced in the last few weeks.

Expat opportunities in China

One Chinese town is so keen to attract expats for their business expertise and experience that they have begun arranging ‘speed dating’ events for employers and potential expat employees.

The first event took place in Hangzhou, the capital of Zhejiang Province, when more than 100 expats from the US, Germany and Russia attended.

By the end of the event, 19 expats had found jobs in sectors diverse as mining and modelling.

According to the local authority, there are currently around 20,000 expats either working or studying in Hangzhou; a number that looks set to increase.

In other expat news

The dangers of expats expressing an opinion on social media were illustrated this week after the public sacking of Sonny Truyen, who is an Australian living in Singapore. His bosses fired him after a profanity-ridden rant on Facebook bemoaning the lack of Pokemon Go in the city state. Truyen said it was an undesirable place to live in and filled with ‘stupid people’. He warned that Singapore’s average IQ level would drop if he left; irate Singaporeans alerted his real estate bosses who promptly fired him.

Questions have been raised about a survey of expats living and working in Thailand after it revealed they were ‘deliriously happy’ and said the country was a safe place to work and live. Now a growing number of expats there are asking where the survey was conducted as they would like to take part, and are questioning some of the findings. The firm behind the survey say they promoted it across social media for expats’ attention.

Expats from around the world considering a move to London may be interested in data from the Office for National Statistics (ONS) which has revealed that in the period leading up to March 2016 there was no improvement to Londoners’ feelings of anxiety and happiness. Those in the capital say they are gloomy about prospects for the local economy, governance and the world’s economy – though it should be remembered the data covers a period that included a general election and the build-up to the Brexit vote.

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