The absence of tax system also attracts expats to UAE.
Strongly maintaining its status as a dream destination among foreigners, the UAE has been rated the 10th-best location for expats worldwide, fourth-best for economics and sixth-best country in terms of salaries.
According to HSBC’s Expat Explorer 2018 released on Wednesday, bigger salaries is the top reason for expatriates to move into UAE followed by career growth and quality of life. Nearly 67 per cent of UAE expats have more disposable income, thanks to higher earnings and the tax-free environment.
The survey, based on results of 859 interviews, revealed that around a fifth of expats have seen their salaries at least doubled since they moved to the UAE, with an average annual expat salary of Dh568,993 ($155,039), outranking top international destinations such as Japan or Australia. Those working and earning here in the UAE say their income has increased by 40 per cent on average compared with 25 per cent for expats globally
“We are seeing an interesting dichotomy among UAE expats. 85 per cent say they are able to build up their savings and pay off debt, yet 93 per cent are not fully aware of or have explored their financial options. It’s clear many are missing the opportunity to make their wealth work for them,” said Marwan Hadi, head of retail banking and wealth management at HSBC UAE.
Ziad Daoud, the chief Middle East economist at Bloomberg Economics, believes that UAE government’s plan to offer long-term residency visas to expats and full ownership will attract more expats into the UAE.
“Recent announcements, such as the long-term residency for expats and removing restrictions on foreign ownership, could have a positive impact and lead to attracting expats. However, we would need to wait and see the full extent of these before we can measure their impact,” said Daoud.
Suresh Kumar, president of the Indian Business and Professional Council, attributes economic and political stability and career growth and forward-looking government policies as key factors that attract foreigners to the UAE.
“Dubai offers great connectivity which is highly important for globally mobile expats because many of them have two or three locations. Plus, the absence of tax system also attracts expats to UAE. Even though VAT is introduced here but it’s very low. Governments at the emirate and federal level have been engaging and promoting new technologies. In many ways, the UAE is far ahead of many others,” Kumar said.
Citing an example, he said the recent announcement by Dubai Airports where passengers will just breeze through the smart tunnel without passport gives very good impression to new visitors, highlighting good quality of life, ease of doing business and ease of living here in the Emirates.
“UAE is an attractive country for expats from to personal, professional and family perspectives.”
Kumar stated that 10-years visas and 100 per cent foreign ownership have been linked to attract more foreign direct investment and also high net worth individual investors to the UAE.
According to the HSBC survey, 46 per cent of expats came to progress their career and 38 per cent to improve their quality of life. While 55 per cent came with a hope to increase their earnings. Nearly 49 per cent find a better working culture here in the UAE than back home. However, around the same amount believe that their working environment is stressful and intense; while 40 per cent say that they work longer hours. Despite these sentiments, over 70 per cent of expats would recommend the UAE to someone looking for a new life abroad.
Where expats want to invest
Hadi said traditionally, expats have channelled most of their investments outside the UAE often to their home country. However, the recent announcement by the UAE to afford special residency-visa privileges for expat retirees has certainly paved the way for more to consider their long-term plans in the UAE.
“Already two-thirds [66 per cent] live here for more than five years, and as expat-friendly reforms come forth, we might see more expats settling their roots down here.”
The survey results revealed that buying property (48 per cent) and saving for retirement (53 per cent) are the top two investment priorities for expats in the UAE. Around 17 per cent own a property in the UAE but a typical expat keeps only a fifth of their wealth in the UAE.
Globally, Singapore, New Zealand, Germany and Canada maintained their top four positions, respectively, followed by Bahrain, Australia, Sweden, Switzerland, Taiwan and UAE. The Emirates was preferred destinations over France, Spain, Hong Kong, the UK, the US and Japan, among many others.