Home » Expat Focus Financial Update 23 November 2016

Expat Focus Financial Update 23 November 2016

InterNations releases expat world city rankings

A survey of expats around the world has placed Melbourne as the best city for opportunity and work-life balance.

Australia’s second-largest city took top spot in the InterNations survey of expats, with 79% of expats living there rating their work-life balance positively.

They said there were lots of leisure activities available that helped push it to the top.And, despite being classed as a world city and being a popular destination for expat opportunities, London struggled into 27th place from the 35 cities looked at. The capital scored particularly poorly for the ‘personal happiness’ category.

The InterNations survey said that despite having strong career prospects, expats will have a poor quality of life and some of the local population are unfriendly. Expats also face having poor weather and long working hours to make London ‘an undesirable location’ for those wanting to work overseas.

That compares with Houston in the US which came in second place, with expats praising America’s fourth-largest city for its relatively low cost of living. It also scored well for the ease of settling in.

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In third place is Madrid with Spain’s capital city scoring well with expats who said they were made to feel welcome and made friends easily. They also say Madrid has a low cost of living.

Düsseldorf in Germany takes fourth spot with an excellent quality of life score, and Singapore offers a high standard of living with excellent wages, putting it in the fifth spot.

The top 10 is completed with Vienna in Austria, where expats praise the weather and the high standard of living, followed by Munich which has a good work-life balance and quality of life. In eighth place is Sydney in Australia, where expats say there are lots of jobs and it is a great location for commerce.

Mexico City takes ninth place; expats praised the weather and salaries going much further. In 10th place is Canada’s biggest city, Toronto. Expats say it’s an easy place to settle and the city offers friendly attitudes.

The next most popular cities include Barcelona, Basel, Frankfurt, Geneva and Berlin.

Expats were questioned on their attitudes to career prospects, living experiences, weather, working hours and their quality of life in their current locations.

Around 14,000 people in nearly 200 countries took part in the survey for the networking service, which also placed the capital of Saudi Arabia, Riyadh, in last place.

British expats snap up UK property

The falling value of the pound has prompted British expats to invest their foreign earnings into buying property in the UK.

The expats are not put off by Brexit and are putting a vote of confidence into their home country, says one of the few expat mortgage providers, Skipton International.

Since the EU referendum vote, the pound has fallen against most of the leading currencies and Skipton’s director of lending, Nigel Pascoe, said: “There has been an increase in British expats making enquiries and this accelerated when the value of the pound dropped. There have been, on some days, up to four times the number of queries we saw before Brexit.”

He added that growing numbers of British expats are now looking at the devaluation of sterling as offering a good opportunity for buying UK property and helping them bring back their foreign currency savings.

Mr Pascoe said that property for British expats is a good long-term investment since they can service their mortgage with rental payments and enjoy capital growth for the property with rising prices.

More US expats set to hand in their passports

Following the election of President-elect Donald Trump, the number of US expats looking to renounce their citizenship has reached the second fastest rate ever.

According to the US government, there are now thousands of Americans wanting to give up citizenship and the waiting time to do so at the American Embassy in London as risen from one month to six months.

US expats wanting to do so will need to pay $2,350 and renounce their citizenship in person at a US embassy.

Now a list published by the US government reveals that the number of citizens wanting to give up their citizenship has 63 times as many people on it than the list published under Barack Obama’s first term had.

However, critics are saying that the surge in numbers is not simply down to Donald Trump’s election victory but also down to stringent tax rules which ensure all Americans, regardless of where they live, file their annual tax return.

Indeed, while on the campaign trail the President-elect promised to repeal FATCA, though many US expats will have to wait to see whether this will be the case.

Meanwhile, fears are growing that the US visa programme for technology employees could come under scrutiny from the new Administration.

Under the H-1B scheme, the US admits 65,000 workers for the sector along with 20,000 graduate student workers every year and the tech industry has lobbied to expand the numbers under the programme but some of the leading members of the new government have criticised the visa programme for taking away American jobs.

British expats face EU travel tax

The EU Commission has announced plans for a travel tax which could be imposed on British citizens after Brexit.

Under the new system, people in the UK would also need to fill out a form if they wanted to travel to a European Union country.

The Commission says a system of security checks will be made in a bid to prevent terrorists entering the EU and the Etias system will see citizens from outside of the European Union who do not require a full visa to pay a five euro (£4.29) charge and also complete an online form.

The Etias permit will be valid for five years and enable the holder to undertake multiple trips.

Expats face remittance tax

In a package of government reforms, expats in Kuwait are facing a tax on their remittances with further reforms to their subsidies as well as privatisations of various sectors.

There will also be new taxes and extensive privatisation of the healthcare and education sectors.

The government is expecting strong opposition to what are effectively austerity measures when the new Parliament meets later this month.

Among the most controversial is the cancelling of all subsidies available except to those who have a limited income, and expats could face a 5% tax on their money transfers to family.

Kuwait has posted a $15 billion deficit last financial year because of falling oil revenues. According to the International Monetary Fund, an extra $116 billion is needed over the next six years to help balance the books.

Meanwhile, expats hoping to wave off family members or greet them at Kuwait’s International Airport and will be prevented from doing so.

Instead, they will only be allowed to see off loved ones at the main gate, with the airport security department saying this is the best way to deal with congestion in the departure area.

Countries rated for English proficiency

One of the demands for expats is to have a good understanding of English for many of their foreign assignments, and the best countries in the world for English proficiency have now been ranked.

It is the largest rating exercise and is based on the country’s level of English-speaking ability, with European countries remaining in the lead. Singapore has become the first Asian country to enter the top 10.

In the first place, overtaking the traditional dominance of Scandinavian countries, is the Netherlands followed by Denmark and Sweden and then Norway and Finland.

Singapore is in sixth place followed by Luxembourg, Austria, Germany, and Poland in 10th place.

This is the sixth year of the study which ranks the relationship between English and various socio-economic factors.

The survey reveals that the ability to speak English is still a major factor when securing a job and enables professionals to enjoy a better quality of life and career. Women, on average, have much stronger English skills than men.

Mexican expats get diplomatic help

Mexican expats living in the US are being promised help from the government which is gearing up to offer its services to Mexican citizens concerned about some of the election campaign promises made by President-elect Donald Trump.

That’s because he promised to impose trade tariffs, deport undocumented immigrants, renegotiate the NAFTA agreement and also build a wall between the two countries.

Now the Mexican government says its consulates should be prepared for a surge in requests for help from Mexicans but it has urged its expat community in America to ‘stay calm’.

There is now a toll-free number offering a hotline should Mexican expats need to access assistance quickly and a 24-hour contact number for those living in the US who need consular assistance.

In other news…

Expats from around Europe who live in Spain will be pleased to hear that after years of struggling property prices, values are increasing once again. Real estate consulting firm Anticipa says that with some expat properties dropping in value by up to 50% in some areas meant many home owners were looking at years of negative equity and with prices rising they may be pleased to hear they could increase by 5.5% by 2018.

The call from the International Monetary Fund for the United Arab Emirates to introduce income tax has been turned down. Despite the fall in oil and gas prices, the country says it will not introduce income or capital gains taxes for individuals and nor will it bring in corporation tax. It will, however, introduce VAT from 2018, along with six fellow Gulf states.

In the World Bank league table of countries that offer business friendly tax regimes, the UK has jumped to 10th position, a rise of five places. The UAE and Qatar topped the table with Hong Kong, Bahrain, Ireland and Kuwait as well as Denmark, Singapore and Macedonia all coming ahead of the UK in the table.

A salary benchmarking site has asked its users about their work-life balance and found that IT and engineering workers are much happier with their job than most other respondents. Emolument says that more than 70% of software developers and engineers said that their work-life balance was satisfactory or great.

The Supreme Court case to see whether the government has the authority to invoke Article 50 and leave the European Union will see lawyers from the Scottish and Welsh governments also entering the fray when the appeal is heard in December. In an unprecedented move, all 11 Supreme Court judges will sit for the hearing, which will hear evidence from the lawyers concerning the impact on Scotland and Wales after Brexit and establish the legal status of the three Parliaments during the Brexit process.

A report published in Dubai has laid bare the shortage of budget accommodation there, particularly for expats. There is very little in the way of affordable housing and there is a desperate need for cheaper flats to meet demand. Property that does meet the majority of residents’ low budgets tends to be out of the way, says a Dubai property listings site.

There are now more than one million international students studying in the US for the first time, says the Open Doors organisation. The students are gaining international experience to apply in their life and careers with numbers rising by 7% from the previous year and now account for 5% of the total number of students in the US. Around one in three are studying maths, engineering or computer science with most coming from India and China.

Expats in India and Indian expats around the world are still struggling with the government’s surprise move to demonetise the Rs 500 and Rs 1,000 notes in a bid to hit the black market. However, many people, including tourists, have been left without access to cash for their daily needs since the banks have long queues and the ATM machines are often unfilled with new currency. Expats are being told that they have until 31st December to change their currency before the notes become illegal tender.

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