39945770 HSBC Expat Economics 2010

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HSBC Bank InternationalThe Expat Explorer Survey 2010

Report one: Expat Economics


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The Expat Explorer SurveyCommissioned by HSBC Bank International, Expat Explorer is the worlds largest

global survey of expats. Now in its third year, the survey continues to deliver insight

into expat life around the globe. Participation rates for the survey have continued to

increase year-on-year and in 2010 the survey has more respondents than ever, with

4,127 expats answering questions relating to their nances, quality of life, and even

what its like to raise children abroad. The survey continues to explore how expat life

differs from country to country, continent to continent.

2010 even bigger than 2009:

Expat EconomicsExpat Economics is the rst of three reports to be produced from this years survey

and focuses on how the economic situat ion differs for expats from country to

country. The report draws upon research which represents the views of expats

surveyed in over 100 countries. Detailed country rankings are published for all

countries where more than 30 expats c ompleted the survey. In total, there

are 25 countries featured in our rankings in this years survey.

The report looks at expat earnings levels, spending/saving/investing patterns and the

impact of the current global nancial climate to paint an informed picture of expats

economic situation around the world. A league table ranking the countries in termsof key economic elements, income, disposable income and luxuries shows how

different countries compare to one another.

e Over 1,000 more expats sharing their experiences in this years survey

e Expats from a total of 39 industries/professions

e The addition of new countries in the Expat Explorer league tables,

including Bermuda and the Philippines

PAGE 2 I EXPAT EXPLORER SURVEY 2010


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Contents


e Overall League Table 4

e Expat ndings 5

Wealth gap between the East and Mainland Europe continues to widen 5

BRIC Countries appear to be emerging expat hotspots 7

Career prospects / higher salaries lure expats to established centresin the East 8

Expat Finances remain strong 9Expats repatriate a considerable proportion of wealth 10

Expats and the credit crunch 11

e League tables by criteria 12

e Methodology 13

About Expat Explorer 13

About Expat Economics 13

e Country reports 15

United Kingdom 15

United States 17

Hong Kong 19

Singapore 21

United Arab Emirates 23

Australia 25

France 27

Spain 29

Germany 31

China 33

Russia 35

e Further information

Contact 37


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Overall Wealth Hotspot Income Disposable income Luxuries

score rank score rank score rank score rank score rank

Russia Federation 0.53 1 0.58 1 0.43 2 0.72 1 0.44 15

Saudi Arabia 0.50 2 0.49 3 0.36 4 0.62 2 0.51 5

Bahrain 0.49 3 0.44 7 0.26 13 0.62 2 0.59 1

United Arab Emirates 0.48 4 0.45 6 0.31 8 0.59 6 0.53 4

Singapore 0.48 4 0.49 3 0.49 1 0.49 7 0.45 13

Bermuda 0.48 4 0.50 2 0.40 3 0.60 5 0.43 16

Qatar 0.47 7 0.46 5 0.30 10 0.62 2 0.50 8

Philippines 0.39 8 0.33 10 0.33 6 0.32 12 0.51 5

Hong Kong 0.38 9 0.39 8 0.36 4 0.41 9 0.38 20

China 0.36 10 0.35 9 0.27 12 0.42 8 0.38 20

Malaysia 0.36 10 0.29 13 0.24 14 0.34 11 0.51 5

United States 0.35 12 0.30 12 0.31 8 0.28 14 0.46 10

Thailand 0.35 12 0.25 14 0.15 19 0.35 10 0.55 3

Switzerland 0.34 14 0.32 11 0.32 7 0.32 12 0.37 22

Mexico 0.32 15 0.25 14 0.24 14 0.26 16 0.47 9

Australia 0.31 16 0.24 16 0.24 14 0.23 19 0.46 10

South Africa 0.31 16 0.18 20 0.07 22 0.28 14 0.58 2

Canada 0.30 18 0.22 19 0.19 18 0.24 18 0.46 10

India 0.28 19 0.23 17 0.20 17 0.26 16 0.39 19

United Kingdom 0.25 20 0.23 17 0.29 11 0.16 21 0.30 25

Belgium 0.23 21 0.15 21 0.09 20 0.21 20 0.40 18

Spain 0.20 22 0.08 23 0.06 24 0.09 23 0.45 13

France 0.19 23 0.07 24 0.07 22 0.07 24 0.43 16

Germany 0.18 24 0.11 22 0.08 21 0.13 22 0.32 24

Netherlands 0.15 25 0.04 25 0.04 25 0.04 25 0.36 23

Overall league table

The top Quartile The bottom Quartile

Refer to methodology on page 13 for more details.


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Expat fndingsWealth gap between the East and Mainland Europe continues to widen

In the 2009 Expat Economics report it was clear that wealth was moving East,

with centres located throughout the Middle East a nd Asia home to a larger

percentage of high net-worth expat individuals. In 2010, the Middle East, Singapore

and Russia dominate the top quart ile of the Wealth Hotspot leader board, while

expats in mainland Europe and South Africa are acc umulating the least amount

of nancial wealth.

Expats in Russia remain the wealthiest in the world, with 36% of expats in Russia

earning over $250,000. This number has actually increased over the past year 30%

of expats based in the country earned over $250,000 in 2009. Both Singapore (32%)

and Bermuda (27%) also have a much higher proportion of expats with an annual

income of over $250,000, signi cantly higher than the overall average of 13%.

Mainland Europe, however, dominates the bottom ve posit ions on the Wealth

Hotspot league table. Almost two-thirds (62%) of expats living in Spain earn below

$60,000, as do almost half of the expats living in France (47%), the Netherlands

(47%) and Germany (45%). This is much higher than the global average of

approximately one quarter (26%) of expats earning below this gure across the

world. In fact, the only other country to join mainland Europe in the bottom quartile

was South Africa, where around one-third (36%) of expats earn less than $60,000.


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l Level 1 countries

l Level 2 countries

l Level 3 countries

l Level 4 countries

l Countries notin economic

league table

W E A L T H H O T S P O T S C O R E

The world map above has been colour coded on the basis of Wealth Hotspot score of the countries in the economic league

table. Wealth Hotspot score is a combined metric of two elements, Income and Disposable income, and as such it intends

to provide a combined measure of earning power and cost of living of expats surveyed by country of residence. A higher

Wealth Hotspot score for a country would suggest that expats here are accumulating more wealth.

The Expat Wealth Hotspot score

Expat fndings

(continued)


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Expat fndings

(continued)

BRIC Countries appear to be emerging expat hotspots

BRIC (Brazil*, Russia, India and China) countries fared well economically over the

past year and, as a result, have emerged as promising expat hotspots. Scores for

expats in these countries were higher than average when looking at a number of

economic factors including earnings, career development, improved economic

outlook and the ability to save.

While close to two-thirds (63%) of all expats surveyed said they are earning more

in their host country than in their country of origin, expats based in BRIC countries

scored much higher (Brazil, 69%; Russia, 82%; India, 70% and China, 75%). In

addition, with the exception of Brazil which fell slightly under the overall average,

expats in BRIC countries were also more likely to see increased career opportunities

within their host country (64% overall compared with; Russia, 82%; India and

China, 70%).

Although all BRIC based expats had a much sunnier economic outlook than the

world average, expats in Brazil were most positive, with over two-thirds (69%)

believing the economic situation had improved over the past year compared to a

22% worldwide average.

Expats also agreed that their disposable income levels were much higher sincerelocating to a BRIC country, which has enabled them to both save and invest more.

Overall Sample(100+countries)

61%

Brazil

66%

Russia

76%

India

66%

China

71%

38% 41%

55%

39% 44%

I am saving more I am investing more

A look at saving and investing habits

* Brazil sample size is 29 and therefore did not make it in to the overall league table.

Where do expats go for better nancial opportunities?

Earning more

63%69%

82%70% 75%

More career opportunities

64% 62%

82%70% 70%

Overall Sample (100+countries) Brazil Russia India China


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Expat fndings

(continued)


While career prospects and higher salaries lure expats to establishedcentres in the East, retirees head to Europe and Thailand

Those expats moving to the Wealth Hotspots are, not surprisingly, highly likely to

be moving for nancial gain and career progression and are very likely to be working

in nance roles. With Asia and the Middle East also weathering the nancial storm

particularly well compared to countries in the Eurozone, it is not a surprise that a

greater number of expats will have sought out these safer hotspots to progress their

careers and be rewarded with higher salaries.

77% percent of expats living in Bermuda work within the nancial services sector,

followed by Saudi Arabia (35%) and Singapore (29%). Similarly, when questioned

about their motivation to move, expats in Saudi Arabia, Qatar and Russia decided to do

so predominantly for career and money prospects (85%, 83% and 76% respectively).

In stark contrast, the majority of those moving to mainland Europe are retirees

(Spain, 38%; France, 33%), with many choosing to move speci cally to retire (25%

and 21% respectively). Thailand also ranks highly for those who choose to move

abroad to retire (21%). These countries, although not scoring well on the Wealth

Hotspot league table, ranked higher when it came to lifestyle; Thailand, France and

Spain topped Expat Explorers 2009 quality of life poll (coming 3rd, 7th and 9th

respectively) and explain the countries retirement draw.

Career/moneyprospects

Broaden my lifeexperience

Tired of the situationin my country of origin

My current employersent me here

To be with mypartner/spouse

To retire abroad

To take care of familyin the host country

Other/Not stated

57%

55%

24%

18%

17%

5%

2%

3%

2%

Country of residence% Mentioning career/money prospects as

the key reason for becoming an expat

Saudi Arabia 85%

TOP 5

Qatar 83%

Russia Federation 76%

Philippines 74%

United Arab Emirates 73%

Netherlands 42%

BOTTOM 5

Australia 42%

South Africa 40%

France 26%

Spain 18%

Why did you choose to become an expat?

The role of career/money in becoming an expat


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Expat fndings (continued)


Expat Finances remain strong

Finances amongst expats remain extremely positive, with the majority of those

surveyed saving more since moving abroad and very few accumulating more debt.

Two-thirds (66%) of expats have more disposable income in their new country and

those in the de ned Wealth Hotspots are bene ting most from the increase in their

personal nances 100% of expats in Bahrain agree they have more disposable

income than they did previously, with the numbers a lso extremely high in Bermuda

(96%), Qatar (92%) and Saudi Arabia (92%).

Although saving levels amongst expats as a whole have dropped since 2009, 61% of

expats are still saving more whilst working abroad and one in ve (20%) are able to

pay off more debt than when they lived in their country of origin. Only 5% of expats

surveyed overall are now accumulating more debt.

Qatar boasts the highest number of expats being able to save more than in their

country of origin (92%) followed by Saudi Arabia (89%), Bahrain (88%) and Russia

(76%). However, higher salaries have resulted in these countries having to spend

more too. Expats in Bermuda (83%), Qatar (63%) and Russia (55%) are all spending

more in their host country compared to their country of origin.

Expats in the UK are the most likely to be accumulating more debt (11%), followedby Australia (9%), despite the fact that many expats in these countries are also

able to save more than in their country of origin (53% and 51% respectively). Spain

(29%) and France (36%) have a much smaller percentage of expats saving more

than in their country of origin, but again this is likely to be due to the larger number

of retirees amongst this population.

Saving more

61%

Spending more

43%

Investing more

38%

Paying offmore debt

20%

Accumulatingmore debt

5%5%

None of these

13%

How are expats allocating their wealth?


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Expats repatriate a considerable proportion of wealth

Although expats tend to use a large variety of vehicles to save and invest, a large

proportion of wealth in longer term investments is repatriated, the most common

being property (30%), equity (22%) and bonds (11%), whilst general savings, banks/

building society savings and investment into company shares are predominantly

carried out within their host country. The use of offshore centres for saving and

investing appears to be under-utilised, with the most popular investment vehicles

for expats being managed funds (16%) and foreign exchange (12%).

Expats in the Middle East are the most likely to repatriate their property wealth, with

very few investing in property in their host country (49% of expats in Qatar invest in their

country of origin compared to 0% investing in their host country and in Saudi Arabia

60% invest in their country of origin whilst 0% invest in their host country).

Other country Offshore centre Host country Country of origin

Savings(unspeci ed)

46%

27%

36%

8%

Bank/buildingsocietysavingsaccount

33%

17%

26%

7%

Property

30%

11%

Equity

13%

13%

22%

9%

Managedfunds

13%

16%

19%

6%

Bank/buildingsocietyxed term

investment

12%10%

12%12%

3%

Foreignexchange

10%

12%

8%8%

4%

Shares incompany

13%3%

10%10%

6%

Bonds

6%7%

11%11%

3%

26%

How do expats allocate t heir money towards savings and investments?


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Expats and the credit crunch

Almost half (47%) of the expats surveyed believed that the economy in their current

country has become worse since the start of 2009. Re ecting the turmoil experienced

in the Eurozone, a larger number of expats based in Spain (93%), Belgium (60%),

France (60%) and the United Kingdom (67%) also agreed with this statement. This was

in contrast to the economies that have escaped the worst of the economic downturn,

where a smaller number of expats living in the emerging nations of Russia (45%), India

(16%) and China (9%) were feeling less negative about their respective host economies.

Expats in these regions were also much more likely to view the economy as

having improved over the last 12 months (Russia, 27%; India, 50%; China, 61%) in

comparison to the overall survey average of around one quarter (22%). Just under

one-third of expats (31%) surveyed said that their economy had remained the same.

Of those expats who revealed that the economic situat ion in their country had

either deteriorated or remained the same, the vast majority (87%) did not believe

that they would be re-locating. This trend was generally higher in Middle East and

Asian countries such as Qatar (94%), Bahrain (97%) and China (92%) than European

countries such as Germany (84%), United Kingdom (78%) and Spain (83%).

This divide suggests that expats in the Middle East and Asia are more likely toremain in their country of residence despite the fact their economic situation has

deteriorated. One explanation for this could be that countries such as Qatar, Bahrain

and the UAE tend to be Wealth Hotspots for expats and are in the top quartile when

it comes to income and disposable income. European countries such as Germany,

Spain, France and the Netherlands are in the bot tom quartile which suggests

that expats may believe they are nancially better off in their current country of

residence, despite the economic situation having worsened.

6%

7%

87%

it hasimproved

22%

YES

it has becomeworse 47%

YES

No, it hasremained the

same 31%

NO

l I am actively looking tomove home due to uncertaineconomic conditions

l I still believe the economy istoo fragile for me to stay so Iam considering a move home

l There has been no impacton my situation and I willbe staying



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Regional League TablesOverall Wealth Hotspot Income Disposable income Luxuries

Country SCORE RANK SCORE RANK SCORE RANK SCORE RANK SCORE RANK

T H E

A M E R I C A S Bermuda 0.48 1 (4) 0.50 (2) 0.40 (3) 0.60 (5) 0.43 (16)

United States 0.35 2 (12) 0.30 (12) 0.31 (8) 0.28 (14) 0.46 (10)

Mexico 0.32 3 (15) 0.25 (14) 0.24 (14) 0.26 (16) 0.47 (9)

Canada 0.30 4 (18) 0.22 (19) 0.19 (18) 0.24 (18) 0.46 (10)

A S I A P A C I F I C

Russia Federation 0.53 1 (1) 0.58 (1) 0.43 (2) 0.72 (1) 0.44 (15)

Singapore 0.48 2 (4) 0.49 (3) 0.49 (1) 0.49 (7) 0.45 (13)

Philippines 0.39 3 (8) 0.33 (10) 0.33 (6) 0.32 (12) 0.51 (5)Hong Kong 0.38 4 (9) 0.39 (8) 0.36 (4) 0.41 (9) 0.38 (20)

China 0.36 5 (10) 0.35 (9) 0.27 (12) 0.42 (8) 0.38 (20)

Malaysia 0.36 5 (10) 0.29 (13) 0.24 (14) 0.34 (11) 0.51 (5)

Thailand 0.35 7 (12) 0.25 (14) 0.15 (19) 0.35 (10) 0.55 (3)

Australia 0.31 8 (16) 0.24 (16) 0.24 (14) 0.23 (19) 0.46 (10)

India 0.28 9 (19) 0.23 (17) 0.20 (17) 0.26 (16) 0.39 (19)

E U R O P E

Switzerland 0.34 1 (14) 0.32 (11) 0.32 (7) 0.32 (12) 0.37 (22)

United Kingdom 0.25 2 (20) 0.23 (17) 0.29 (11) 0.16 (21) 0.30 (25)

Belgium 0.23 3 (21) 0.15 (21) 0.09 (20) 0.21 (20) 0.40 (18)

Spain 0.20 4 (22) 0.08 (23) 0.06 (24) 0.09 (23) 0.45 (13)

France 0.19 5 (23) 0.07 (24) 0.07 (22) 0.07 (24) 0.43 (16))Germany 0.18 6 (24) 0.11 (22) 0.08 (21) 0.13 (22) 0.32 (24)

Netherlands 0.15 7 (25) 0.04 (25) 0.04 (25) 0.04 (25) 0.36 (23)

M I D D L E E A S T

A N D A F R I C A

Saudi Arabia 0.50 1 (2) 0.49 (3) 0.36 (4) 0.62 (2) 0.51 (5)

Bahrain 0.49 2 (3) 0.44 (7) 0.26 (13) 0.62 (2) 0.59 (1)

United Arab Emirates 0.48 3 (4) 0.45 (6) 0.31 (8) 0.59 (6) 0.53 (4)

Qatar 0.47 4 (7) 0.46 (5) 0.30 (10) 0.62 (2) 0.50 (8)

South Africa 0.31 5 (16) 0.18 (20) 0.07 (22) 0.28 (14) 0.58 (2)

Refer to methodology on page 13 for more details.


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MethodologyAbout Expat Explorer

The Expat Explorer survey, now in its third year, is the largest global survey of

expats. Commissioned by HSBC Bank International and conducted by third party

research company GfK, 4,127 expats were questioned through an online survey from

26th April 2010 to the 7th June 2010, with expats from over 100 countries worldwide

taking part making this unique survey the largest of its kind. I ndividuals from four

continents described the opportunities and challenges they experience living away

from home. The survey provides an insight into how expat life differs from country to

country, continent to continent and from an expats country of origin.

Please note the sampling technique used for the 2010 survey does not claim to give

a fully representative sample of expatriates. In addition, it differs substantially from

the sampling technique used in 2009. Therefore, comparisons of results year on year

are not statist ically valid and have been made for illustrative purposes only.

A sample size of 30 or more respondents from each country was required for

inclusion in the league tables, in order to be considered robust and indicat ive of

the views and trends of the speci c population. The league tables are based on a

series of interrelated factors (rather than a single factor or question) to ensure a fair

assessment of how individual countries rate across the full criteria. The responses of

those who responded not applicable or refuse to say have been excluded. Each

criterion is equally weighted to arrive at a score. The overall ranking is based on the

average score for a country across the criteria.

About Expat Economics

The Expat Economics league table ranks countries in terms of three main economic

factors: Income, Disposable Income and a measure of Luxury. All countries with a

sample size of 30 and above are included in the economic league table. Scores from

each factor are equally weighted to arrive at an Overall Expat Economic Score and

Overall Rank.

Individual country rankings for the constituent elements (Income/Disposable Income/

Luxuries) are also available. Scores for Income and Disposable Income are averaged to

produce a Wealth Accumulation Hotspot Score and Rank for each country.

Income Score is derived from proportion of expats surveyed in each country

who earn at least $200k per annum. Disposable Income Score is derived from

proportion of expats surveyed in each country who have a disposable income of

$3000k+ per month compared to their country of origin. Luxury score is derived

from ascertaining the proportion of respondents who have agreed with a number

of following statements:

e Live in a nicer / bigger property

e Have domestic helper / staff (e.g. cleaner/nanny)

e Own more than one property

e Own nicer and more cars

e Own a boat / yacht

e Go on more luxurious holidays

e Better healthcare

e Own a swimming pool


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The criteria to generate the economics league table has been further re ned from

2009 to ensure it is even more robust. The Luxury score is a response level score

meaning that the more items expats from a certain country tick, the bigger their

Luxury score as opposed to just being based on proportions of respondents who

have at least ticked one item.

Respondents answered income-related questions in one of ten currencies that they

use most often, however for ease of analysis and comparison, all foreign currencies

were converted into US dollars. As per the following table, currency conversions

were calculated based on conversion rates available as of 21st April 2010.

Currency

USD 1 USD

SGD 0.14 USD

JPY 93.25 USD

HKD 7.76 USD

GBP 0.65 USD

CNY 6.83 USD

CAD 0.99 USD

AUD 1.08 USD

AED 3.67 USD

Methodology (continued)


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e Overall ranking: 20th out of 25

eIncome: 11th out of 25

e Disposable income: 21st out of 25

e Luxuries: 25th out of 25

e Wealth Hotspot: 17th out of 25

UNITED KINGDOM

[Li e here is]

Very good. Excellentor frst ew years; now

getting tricky with globaleconomic crisis.

- Expat in the UK

Country reports


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The current economic climate has a signi cant impact on UK-based expats

The economic climate over the past year has had a higher than average effect

on UK based expats, with two-thirds (67%) believing that the situation in the UK

deteriorated over the past year, compared to an overall survey average of 47%. As

a result, just over one in ten (11%) of those who said the economy hadnt improved

are actively looking to move home due to the current economic climate.

With nearly half (46%) of UK based expats working in the nancial sector, economic

instability has had a visible effect on their career prospects. Nearly one-third (29%)

of UK based expats said there have been reduced career opportunities and 31%

say they are having to monitor their expenditure more closely something that has

become increasingly important due to the increased c ost of living that UK based

expats are faced with. Over half of UK based expats agreed that the cost of living

was considerably higher than in their country of origin, spending more on most

items except healthcare.

The United Kingdom (UK) also scores lowest of all countries on the luxury scale.

Expats based in the UK scored lower than average on all luxury factors except

holidays, where half (51%) said they were able to go on more luxurious holidays

than in their country of origin, compared to an overall average of 46%.


United Kingdom (continued)

RANK: 11th

DISP. INCOMESCORE

RANK: 21st RANK: 25th RANK: 17th

Sample size 420

Country of origin USA (22%); Australia (14%);Canada (10%); France (10%);India (6%); Other (38%)

Occupation Finance (46%); IT (8%);Marketing (8%), Other (38%)

Age 18-34 (50%); 35-54 (45%);55+ (6%)

Gender Male (57%); Female (43%)

Pro le of UK based expats surveyed in 2010:

RANK: 20th

INCOME SCORE WEALTH HOTSPOTSCORE

LUXURY SCORE

OVERALL SCORE


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Country reports (continued)



eIncome: 8th out of 25

e Disposable income: 14th out of 25



UNITED STATES OF AMERICA

Career enhancingmove; complexadministration;

complex fnances.

- Expat in the USA


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USA-based expats spending more on healthcare

In ationary measures seem to be in check for those in the USA, with only 12%

thinking there had been an increase in the price of everyday items. However,

healthcare is one area that USA-based expats feel the pinch more so than any other

country over two-thirds (68%) think they spend more on healthcare in the USA

than they did in their country of origin.

Over half (55%) of USA based expats think the economic situation has become

worse since last year, which although higher than average (47%), is not a huge

cause for concern amongst the expat community. Only 4% of expats based in the

USA are actively looking to leave and 90% think that their actual circumstances have

not been impacted.

Expats in the USA scored highly for earnings, with 29% earning over $200,000 and

two-thirds (64%) revealing that they now have more disposable income than in their

country of origin, yet only 55% save or invest more than they did before relocating,

lower than the overall gure of 60%. That said, expats based in the USA are st ill

keen investors with nearly 83% having at least one savings account as well as 42%

holding shares in their company (42%).


United States o America (continued)

RANK: 8th

DISP. INCOMESCORE

RANK: 14th RANK: 10th RANK: 12th

Sample size 231

Country of origin UK (53%); Australia (6%);Canada (5%); France (5%);Other (31%)

Occupation Finance (27%); IT (10%);Marketing (6%), Science/ Research (6%); Retired (6%),Not stated (9%), Other (36%)

Age 18-34 (27%); 35-54 (50%);55+ (23%)


Pro le of USA based expats surveyed in 2010:

RANK: 12th


LUXURY SCORE

OVERALL SCORE


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e Income: 4th out of 25




HONG KONG

Expat li e is great,especially rom a

fnancial point o view.Also [the] opportunityto see di erent cultures

and li estyles.

- Expat in Hong Kong



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Expats in Hong Kong positive about the economy and bene ting from

favourable tax jurisdiction

Hong Kong based expats have remained relatively positive about their economic

situation with more than half of the respondents (53%) agreeing that it has actually

improved since last year, compared to a worldwide average of 22%. Expats in Hong

Kong are relatively high earners (35% earning over $200,000) and 75% agree that they

earn more since relocating. However, expats score relatively low in terms of luxuries,

featuring only 20th out of 25 for the league table, the lowest of all Asian countries.

Although expats in Hong Kong are spending considerably more than average on

items such as accommodation (60%) and food and drink (66%), only 7% of expats

based in Hong Kong believe they pay higher tax in their country of residence than in

their country of origin (28% on average).

Hong Kong based expats were the most likely to invest in their own companys

shares compared to other nations (51%) as well as investing highly in equity (58%)

and foreign exchange (41%).

*Please note that although Hong Kong is referred to here as a country for the sake

of this report, Hong Kong is a territory of China.


Hong Kong (continued)

RANK: 4th

DISP. INCOMESCORE


Sample size 247

Country of origin UK (49%); Australia (13%); USA(11%); India (5%); Other (22%)

Occupation Finance (61%); Marketing (7%);Other (32%)

Age 18-34 (30%); 35-54 (61%);55+ (9%)


Pro le of Hong Kong based expats surveyedin 2010:

RANK: 9th


LUXURY SCORE

OVERALL SCORE


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e Income: 1st out of 25



e Wealth Hotspot: 3rd out of 25

SINGAPORE

OK or [the] shortterm 24 months to

accumulate wealth.

- Expat in Singapore



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UNITED ARAB EMIRATES

Lots o money, luxuryand better standard o living with more savings

and investments.

- Expat in the UAE


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UAE-based expats enjoy a luxurious lifestyle

Expats in the UAE ranked 4th overall when it came to luxury. Common perks for

expats living in the UAE include more cars (63% in UAE vs. 29% overall), more exotic

holidays (57% vs. 46%), nicer and larger properties (58% vs. 50%) and domestic help

(57% vs 37%). In addition, expats bene t from much lower tax costs, with almost

all (94%) of expats based in the UAE paying lower tax than in their country of origin.

Expats in the UAE, as well as earning higher salaries (the UAE ranks 6th on the Wealth

Hotspot chart) are saving more too, with 79% stating that they saved more since

becoming an expat compared to the worldwide average of 61%.

Despite the perks and improved lifestyle, the past year has been dif cult

economically for expats based in the UAE, with over three quarters (77%) indicating

that the economic situation has deteriorated over the past year. This has directly

impacted a quarter of expats who think there are reduced career opportunities

in the UAE, with one in ten of those who thought the economy hadnt improved,

actively looking to return home. However, the majority of expats in the UAE remain

optimistic; 81% have said that they have not been directly impacted and are

therefore not actively looking to return home.


United Arab Emirates (continued)

RANK: 8th

DISP. INCOMESCORE


Sample size 334

Country of origin UK (50%); India (10%); Australia(7%); Canada (5%); Other 28%)

Occupation Finance (26%); Construction/ Manufacturing/Utilities (12%);Management (9%), Education(6%); Other (47%)

Age 18-34 (20%); 35-54 (64%); 55+(15%)


Pro le of UAE based expats surveyed in 2010:

RANK: 4th


LUXURY SCORE

OVERALL SCORE


25/37







AUSTRALIA

Its been a good move,though hard work initially and fnancially

we are in a lot more debt.

- Expat in Australia



26/37

Expats in Australia are seeing an improvement in the economic situation but are

also showing concerns on the rising costs of living

Although 41% of expats in Australia are seeing an improvement in the economic

situation (compared to 22% overall), one quarter (25%) think there has been an

increase in the price of everyday items, showing that in ationary worries are at the

forefront of expats minds.

Although the majority agree that the price of everyday items is still largely in line with what

they would cost in their country of origin, healthcare (50% Australia vs. 40% overall) and

tax (40% vs. 28%) are two areas that are more expensive in Australia than in their countryof origin. Even with these increased costs, almost two-thirds (63%) of Australians still

agree that they have more disposable income than they did before moving.

While Australia ranks in 16th place on the economics league table, it scores highly

in other aspects, such as quality of life (Australia ranked 2nd in Expat Explorers

2009 quality of life survey) and luxuries. 63% of Australia-based expats are able to

live in a nicer or bigger property since relocating, nearly a quarter have a swimming

pool (24%) and nearly half (49%) own their own property. Those moving to Australia

are predominantly from the UK (70%) and the country makes a popular retirement

destination, with retirees accounting for one in ten expats.


Australia (continued)

RANK: 14th

DISP. INCOMESCORE


Sample size 115

Country of origin UK (70%); South Africa (5%);Other (25%)

Occupation Finance (17%); IT (10%);Retired (10%); Management(8%); Education (6%); Notstated (8%), Other (41%)

Age 18-34 (24%); 35-54 (47%);55+ (29%)


Pro le of Australia based expats surveyed

in 2010:

RANK: 16th


LUXURY SCORE

OVERALL SCORE


27/37


e Overall ranking: 23rd out of 25

e Income: 22nd out of 25




FRANCEI have a better quality

o li e but, due tothe present rate o

exchange regarding theeuro and the pound, it

has caused hassle [with]regards [to] fnance

which I didnthave be ore.

- Expat in France



28/37

France is a popular destination among expat retirees

Although France appears in the bottom quart ile on the Wealth Hotspot league table

(24th) and earnings fall well below average (47% of expats earn below $60,000

compared to an overall average of 26%), one-third ( 33%) of expats in France are

retired and nearly half (48%) are over 55 years old, which accounts for its low

scoring within the Expat Economics report.

The economic situation in France has been seen as relatively unstable by the

majority of expats based there. Three out of every ve expats in France think that

the economic situation has deteriorated since last year and with associated currencyuctuations, it is not surprising to see that over one-third (42%) indicated that they

have seen an increase in the price of everyday items. Expats based in France also

believe tax costs are considerably higher than in their home nation (36% vs 28%

overall). Due to the high number of ret irees, 90% of French expats remain relatively

unscathed by this economic uncertainty and are not looking to move home. They

are also less likely than those in other countries to have to monitor their expenditure

(21% in France vs. 23% overall) or have to worry a bout reduced career opportunities

(9% in France vs. 20% overall).


France (continued)

RANK: 22nd

DISP. INCOMESCORE


Sample size 222

Country of origin UK (53%); USA (25%);Other (22%)

Occupation Retired (33%); Finance (9%);Education (7%); Travel (6%);IT (6%); Unemployed (6%);Other (33%)

Age 18-34 (15%); 35-54 (38%);55+ (48%)


Pro le of France based expats surveyed

in 2010:

RANK: 23rd


LUXURY SCORE

OVERALL SCORE


29/37


e Overall ranking: 22nd out of 25


e Disposable income: 23rd out of 25


e Wealth Hotspot: 23rd out of 25

SPAIN

Since the crisis started in the UK and Spain, li ehas become very di fcult

so will return to UK inSeptember until we can

a ord to return to Spain.

- Expat in Spain



30/37

Feeling the economic heat more than any other nation

The vast majority of expats in Spain (93%) believe the economic situation has

become worse over the past year, but in spite of this, 83% of expats who thought

the economy hadnt improved said they will not be looking to leave the country.

Similar to France, retirees account for the largest expat group (38%), which again

provides an explanation for Spains low score on the Wealth Hotspot league

table (23rd).

Whilst not scoring highly on all luxury criteria, the fact that many expats in Spain are

likely to have a swimming pool, own a nicer or bigger property and are more likelyto run their own business, accounts for the fact they have ranked 13th in the luxury

scales higher than any other European country.

To cope with the economic fallout, 41% of Spain based expats have had to monitor

their expenditure more closely (much higher than the overall average of 23%), while

over a quarter (28%) have seen an increase in the cost of everyday items. Matched

with the fact that nearly one-third (29%) of Spanish expats admit that they have less

disposable income than in their country of origin, it is clear to see how expats in

Spain are feeling the pinch.

Expats in Spain are also the least likely to invest in company shares (14%), preferringinstead to invest in property and savings accounts within their host country

one-third (35%) of expats based in Spain use these investment options.


Spain (continued)

RANK: 24th

DISP. INCOMESCORE

RANK: 23rd RANK: 13th RANK: 23rd

Sample size 130

Country of origin UK (71%); USA (8%);Other (21%)

Occupation Retired (38%); Education (9%);Unemployed (9%); Finance(8%); Media (6%); Other (30%)

Age 18-34 (14%); 35-54 (39%);55+ (49%)


Pro le of Spain based expats surveyed

in 2010:

RANK: 22nd


LUXURY SCORE

OVERALL SCORE


31/37



e Income: 21st out of 25

e Disposable income: 22nd out of 25


e Wealth Hotspot: 22nd out of 25

GERMANY

Sacrifces have beenmade (particularly

fnancially) but I loveliving in another culture

and learning about another part o the world rather than just being a tourist.

- Expat in Germany



32/37

An unattractive location for t hose looking for career progression

Scoring 24th out of the 25 countries analysed in the Expat Economic league

table and 22nd in the Wealth Hotspot league table, Germany is perhaps not an

expat location for those seeking career prospects and monetary gain. The highest

proportions of expats are either in education (15%), or a homemaker (12%).

Just over half (53%) of expats based in Germany believe that the economic situation

in the country has become worse since 2009 and although 50% of expats moved

to the country for increased career prospects, over one-quarter (26%) have seen

reduced career opportunities over the past year. As a result, 8% of expats inGermany who thought the economy hadnt improved are actively looking to return to

their country of origin, whilst a further 8% of that group say that with the economy

being so fragile they are also considering a move home.

More positively, even though many expats based in Germany have lower levels

of disposable income than they did in their country of origin (only 23% of expats

in Germany agree to having more or much more disposable income since moving

against an overall average of 42%), only 18% are having to monitor their everyday

spending and only 11% claim to have seen a rise in the price of everyday items. Tax

and public transport are two areas where expats in Germany feel the pinch more

than in their home countries (public transport 42% in Germany vs. 27% overall andtax 52% vs. 28%).


Germany (continued)

RANK: 21st

DISP. INCOMESCORE

RANK: 22nd RANK: 24th RANK: 22nd

Sample size 110

Country of origin USA (34%); UK (29%);Australia (6%); Other (31%)

Occupation Education (15%); Unemployed(12%); Not stated (9%); IT(8%); Retired (8%); Science/ Research (6%); Other (42%)

Age 18-34 (28%); 35-54 (50%);55+ (22%)


Pro le of Germany based expats surveyed

in 2010:

RANK: 24th


LUXURY SCORE

OVERALL SCORE


33/37







CHINA

Better work-li e balance, higher income,

more stable economicsituation, more amily

and couple time, aglobal perspective and

experiences shared as a amily.

- Expat in China



34/37

In ation is on the rise, even though the cost of living remains in check

Expats in China are con dent in the countrys economy and almost two-thirds (61%)

agree that they have seen an improvement in the economic situat ion since last year.

Although in the second quartile on the Wealth Hotspot league table, China still has

a relatively wealthy expat base, with one quarter (26%) earning over $200,000. The

country is a big draw to those looking for increased career opportunities or nancial

gain and over two-thirds (68%) of expats c ited this as their main reason for moving

to China. Indeed, the country has proven to be an expat hotspot for those looking

for higher income and career prospects; three-quarters (75%) of those who move

to China have seen an increase in their income levels and 70% agree there are

increased career opportunities in their new host country. Overall, the country is very

popular for those working in the banking and nance world, which accounts for over

one-third of the expat community (36%).

Although one-third of China-based expats have seen an increase in the cost of

everyday items, the actual cost of living is very low compared to other expat

countries; over two-thirds of expats agreed that most everyday items in China were

cheaper than in their country of origin. However, luxuries did not score very highly for

expats based there; property ownership and owning nicer or more cars than in their

home nation scored particularly low with only 5% owning a nicer car or more cars

and 16% owning their own property.

Expats within China are also able to save more since relocating. 71% save more

and 44% invest more than they did when living in their country of origin. Savings

accounts are the most popular investment vehicle amongst China based expats

(86% have at least one) alongside equit ies (55%) and foreign exchange (38%).


China (continued)

RANK: 12th

DISP. INCOMESCORE


Sample size 101

Country of origin UK (30%); Hong Kong (29%);USA (11%); Canada (7%);Australia (6%); Other (17%)

Occupation Finance (36%); Education(10%); Management (9%);Construction/Manufacturing/ Utilities (9%); Other (36%)

Age 18-34 (15%); 35-54 (74%);55+ (12%)


Pro le of China based expats surveyed

in 2010:

RANK: 10th


LUXURY SCORE

OVERALL SCORE


35/37


e Overall ranking: 1st out of 25

e Income: 2nd out of 25

e Disposable income: 1st out of 25


e Wealth Hotspot: 1st out of 25

RUSSIA

Fantastic broadeningexperience with

huge potentialfnancial benefts.

- Expat in Russia



36/37


37/37

Further in ormationContact:

Karen Butcher

Account Manager

Hill & Knowlton

Phone: +44 (0) 207 413 3181

Email: [email protected]

Nick WoodsSenior Account Executive

Hill & Knowlton

Phone: +44 (0) 207 413 3515

Email: [email protected]

Web: www.offshore.hsbc.com/expatexplorer

Blog: www.expatexplorer.blogspot.com

Twitter: www.twitter.com/expatexplorer


Documents

39945770 HSBC Expat Economics 2010