UAE’s Golden Visa proves attractive to Americans
Arabian Business news announced in late November that more than 2,800 high net-worth American expats had renounced their citizenship in the later quarters of 2022. Since 2019, 150,000 of the state’s new golden visas have been issued, and visa advisory firms have noticed a recent rise in the number of American citizens who are looking towards the Emirates. Many are tired of having to pay joint taxes and do not feel supported by their government.
A recent poll suggested that one in four US expats globally are contemplating a renunciation of their citizenship, and the group Democrats Abroad (the official organization for Democratic Party members who live overseas) have recently published a report criticising the US government’s ‘punitive’ approach to American expats. They say that legislation designed to deter tax evasion “renders Americans abroad unable to responsibly save and invest for their future, while American small-business owners abroad are unable to compete in local markets, due to being treated the same as multinational corporations under the [U.S.] tax code.”
However, it’s worth noting that in mid-December, Arabian Business warned that expats could be leaving the UAE soon if they don’t get a pay rise. They cite new research from recruitment consultancy Robert Half, who canvassed expat employees in a recent survey. Over 50% were concerned about the rising rate of inflation in comparison to their salaries, and over half also said that they were worried about increasing living costs. 74% of respondents told Robert Half that they were considering looking for a new role in 2023, and of the reasons given, salary was a significant factor.
Saudi Bank warns against scams
SAMA, the Saudi Central Bank, warned this autumn against interacting with messages that ask you to update your bank data, or which threaten to close your account. It has also cautioned both locals and expats to avoid unlicensed forex companies, such as those advertised by fabricated social media videos which purport to be news bulletins, and fake e-bulletins which claim to be from official Saudi organisations, such as utility companies. Saudi security services are also working to raise awareness of this issue.
Kuwait opens up loans to expats
The Kuwaiti finance authorities note that “Banks have stopped their policy of turning down a large segment of expatriates and Bedoun residents working in the private sector from borrowing.” The revised system is aimed at non-Kuwaitis working in the private sector and has an instalment-based financing limit of up to KD 70,000, without the need for a guarantor. The conditional salary limit has also been revised downwards. However, there are still criteria for loan eligibility, including a clear credit history and employment by a company that is either on the banks’ clients list, or which is listed on the Kuwaiti stock exchange.
Post-Brexit fintech agreement between UK and Singapore
Regulatory barriers to trade are currently being revised between Singapore and the UK, in an effort to develop the mutual fintech sector. Janine Hirt, CEO of the trade body Innovate Finance, says that the aim is to “deliver a strengthened framework for vital regulatory and policy discussions between the two countries.” This is not a wholly new initiative, but builds on a 2016 agreement to develop a co-operative ‘bridge’ between regulators and businesses and a preliminary partnership agreement in 2021. Andrew Griffith from the UK Treasury says: “The UK and Singapore are among the world’s leading jurisdictions for fintech investment — and today’s announcement will only accelerate growth and innovation in our respective sectors.”
Majorca press reports on expat finances
The Majorca Daily Bulletin reported in late November that the fall in the pound in September has in some cases benefited local British expats. It reports that those Brits who invested in property in Mallorca, a popular destination over the past 60 years or so, have now seen a relative increase of 20% in the value of their properties. The paper notes that ‘huge numbers’ of expats across Spain are currently repatriating funds via specialist money transfer services in order to take advantage of exchange rates.
Spain planning ‘solidarity’ tax on large fortunes
Blevins Franks reported this autumn that the Spanish taxation authorities are intending to introduce a ‘solidarity’ tax on the wealthy, namely those with a net wealth of over €3 million. The ‘impuesto de solidaridad a las grandes fortunas’ will be introduced via new legislation and passed through existing urgent legislative procedures, thus taking half the time it would normally take, in time for the 2023 tax year.
This measure is partly a knock-on effect of the Andalucian 100% wealth tax relief measures, which we have reported on previously. The fear is that other autonomous regions might follow suit and increasingly place wealth beyond the reach of the tax authorities. The aim appears to make it a temporary measure for the tax years of 2023 and 2024, thus redistributing wealth among Spanish citizens. At the moment, the plans look like this:
- 7% for net assets between €3 million and €5 million
- 1% for net assets between €5 million and €10 million
- A marginal rate of 3.5% for net assets above €10 million.
It is not yet clear, Blevins Franks says, whether the new tax will be levied on your entire wealth, or just the amount above the €3 million threshold. Double taxation is obviously a concern, so at present it would seem that if, for instance, you are eligible for Andalucian tax relief, you wouldn’t pay any state taxes, but you would have to pay the solidarity tax if your net wealth amounts to the €3 million plus.
The law isn’t in place yet, so if this applies to you and you’re concerned about it, keep an eye on the legislation and its development.
Goldman Sachs moves personnel to Milan
Merchant bankers Goldman Sachs have been moving staff from some trading desks from London to Milan, part of its move to bolster European offices in the wake of Brexit, Bloomberg reported recently. This move is likely to be followed by other banks, who are looking to Paris, Frankfurt and Amsterdam after the UK left the European Union. Issues in London such as financial passporting are still creating difficulties, and banks are worried about regulatory issues. The Wall Street behemoth is also planning to create new offices in Munich. Local hiring is also likely to be a feature.
InterNations survey puts Mexico City in first place for finance
Our report on the full InterNations survey for 2022, calculating expat satisfaction across the board in 50 cities, can be found in our International News Update December 2022, but when it comes to the Financial Index, Mexico City ranks in first place, with three out of four expats rating their financial position in positive terms. 87% stated that their income was sufficient for a comfortable life, with two out of three stating that it was actually more than enough.
Bangkok ranked second in the financial listing, with 86% stating that their income was more than enough for a comfortable life. Valencia – top of the overall ranking – appeared in third place, more for a low cost of living than for high wages. It has the highest proportion of retirees in the survey, too.