Mercer City Ranking for 2023
The annual Mercer City Ranking for 2023 has now been released, giving details of the most and least expensive cities on the planet for international employees. Hong Kong, Zurich and Geneva topped last year’s list, and Hong Kong is once again at the head of the ranking, being judged the most expensive city on Earth. However, this year it is followed by Singapore, which has pushed Zurich from second to third place. Havana, Karachi and Islamabad are at the bottom of the list for 2023.
Switzerland features extensively in the top ten, with four of its cities appearing – Zurich, Basel, Bern and Geneva. New York comes in at number 6, followed by Tel Aviv (8), Copenhagen (9), and Nassau (10). London is at number 17, followed by Dubai at 18. Paris and Berlin feature at 35 and 37.
In the US, all the cities in the Mercer ranking have risen, becoming pricier this year. LA (11) and San Francisco (14) follow behind New York, but Detroit, Houston and Cleveland have also increased significantly when it comes to cost of living.
European cities are also highly ranked: Vienna (25), Amsterdam (28) and Prague (33) follow behind London.
African cities are comparatively low on the list, such as Windhoek, Durban and Tunis. The Central African Republic’s Bangui ranks as most expensive, at number 26.
The Mercer ranking lists 227 cities across the globe, although it looks at 400 cities. It considers factors such as the cost of living and changing economic conditions. There have obviously been plenty of changes post-pandemic, with working from home impacting the office culture of many cities, and inflation and the ‘cost of living crisis’ have an a wider impact on many nations, including the UK. New York is used by Mercer as the baseline for their calculations and currency movements are pegged against the USD.
The survey looks at the cost of basic items in a number of categories: housing, transportation, food, clothing, household goods and entertainment. It has an international ‘basket’ of basic goods. This year, sugar, cooking oil and butter have risen in price (partly due to the war in Ukraine), but the cost of petrol has slowed somewhat in recent months.
The company predicts a slower rate of growth in 2023, due in part to what it describes as ‘aggressive’ national monetary policies imposed in efforts to curb galloping inflation. This is a direct result of the pandemic, and the conflict in Ukraine. It warns that core inflation in some countries has not yet peaked, and that levels of debt remain high in many nations. It also counsels that exchange rate fluctuations are particularly likely to affect the finances of international workers.
However, the ECA International’s Cost of Living Rankings for 2023, which is based on slightly different criteria, has NYC in the top spot, having knocked Hong Kong from its place at the top of its own 2022 listing. ECA’s 2023 rankings are as follows:
- New York, US (2022 ranking: 2)
- Hong Kong, China (1)
- Geneva, Switzerland (3)
- London, UK (4)
- Singapore (13)
- Zurich, Switzerland (7)
- San Francisco, US (11)
- Tel Aviv, Israel (6)
- Seoul, South Korea (10)
- Tokyo, Japan (5)
UK Expats Face ‘Mortgage Drought’
As mortgage interest rates continue to soar, UK expats are facing a ‘mortgage drought,’ the Financial Times reported this month. Lenders have been pulling out of many buy-to-let deals, but in the case of some residential mortgages, are also insisting that these be converted to consumer buy-to-let loans, which typically carry a higher interest rate. If you have a specialist broker with expertise in loans for expats, it’s wise to consult them regarding those products which are still on the table.
Belgium’s Data Protection Agency Takes Action
Belgium’s Data Protection Agency has taken action recently to protect the private financial information of Americans living in the country, preventing it from being shared with US tax authorities. This issue has been rumbling on for several years, affecting a number of ‘accidental Americans’ (people who were born in the States, but whose parents then moved back to their home country). We have reported on this previously, particularly in relation to France. Taxing citizens on birth is almost unique to the USA (the exception is Eritrea), and compliance with US tax law is particularly bureaucratic and onerous. Foreign banks don’t like it, either, and can lock citizens out of the banking system by refusing to let them open accounts – even if they are, to all intents and purposes, Belgian or French.
The President of the Association of Accidental Americans is leading a legal challenge to the Foreign Account Tax Compliance Act (FATCA), and is responsible for the recent Belgian move. Belgium’s DPA investigated and says that American tax requirements currently violate the EU’s General Data Protection Regulations. This finding could act as the basis for a test case against the US authorities, a bridgehead to establish that ‘accidental Americans’ resident in Europe no longer have to comply – which would be good news for the several thousand people whose everyday lives have been impacted by the advent of FATCA.
Hong Kong Tax Exiles
It’s not just Americans abroad who are targeted by the tax authorities, however. The Daily Telegraph recently reported on a 2014 agreement between Britain and China, which stipulates that HMRC can give details of Chinese nationals’ tax affairs to the Chinese government. This well-intentioned move, set up originally to prevent tax avoidance and fraud, is now resulting in the targeting of refugees who are critical of the Chinese regime, particularly in relation to Hong Kong. Campaigners have found that details of their private financial affairs, including their UK addresses, have been shared without their knowledge, and there are concerns that this information is being misused.
The Committee for Freedom in Hong Kong Foundation says that those who seek refuge in the UK should be protected.
The Post-Brexit landscape: Finance Moves to France
Bloomberg reported in May that Paris is setting up as the new financial hub of the EU, with thousands of jobs moving from London to the French capital. It’s becoming a dominant force in fintech, too, with start-ups complaining that the tough regulatory environment with regard to licensing and the limited talent pool in London make Paris a more appealing choice. Nicolas Benady, the CEO of banking firm Swan, told the press in May that “No one wants to hear about Brexit anymore, but its influence on fintech is undeniable. Getting a first license in just one country is a huge task for a young startup, so if they have to choose which market, why would they choose 67 million people over 450 million people?”