Expats shift to BRIC as eurozone flops in finance

Expats shift to BRIC as eurozone flops in finance

6th October 2010, Comments 1 comment

HSBC Expat has released the first of three reports revealing findings of a survey of over 4,000 expats worldwide and their opinions about finance, lifestyle and family in their host country.

UPDATE:  May 2011 marked the official launch of this year's Expat Explorer Survey. Now in its fourth year Expat Explorer, is the largest global survey for expats, where expats worldwide can have their say about their experiences working and living overseas. Voice your opinion here.

It may come as no surprise, but the latest numbers are in: The typical expat is a middle-aged Englishman with a knack for finance and an appetite for wealth, says The 2010 Expat Explorer Survey conducted by HSBC Expat. Location, however, has seen a definite shift.

For its third year in a row, HSBC Expat continued the annual three-part Expat Explorer survey, upping the total of online samples to over 4,000 expats in more than 100 countries who completed questionnaires related to essentials such as business, quality of life and family environments.

“Expats are scattered around the world, and we don’t get a lot of general marketing data. This gives us a way to dive into getting resources on expats,” says Lisa Wood, head of marketing for HSBC Expat in Jersey.

Expat Economics is the first of three reports, revealing the economic climate among expats in 25 countries ranked by measurements in finance and economics. Two future reports, focusing on the challenges and observations on the topics of lifestyle and family, are set to be released by the end of this year.

”When you look at the life of an expat, there is a trade-off between lifestyle, family and finance,” says Wood. “It’s all about balancing out different things.”

As Expatica.com dives into its monthly theme of repatriation, here’s a look at the current expat economic trends both on a European scale and worldwide scale in terms of business and finance.

Big bucks in the BRICs

Demographics maintain the typical expat age, sex and nationality, but the most notable result with expat trends worldwide is a shift in financial interest and opportunity from the eurozone to developing countries with promising economic growth.

 “People are tending to move to BRIC countries, and they’re faring well there economically,” says Wood. “Expats are earning more, the economy is growing, career opportunities are better in BRIC countries; these things follow one another.”

China ranked No. 8 in level of disposable income and No. 9 as a wealth hotspot source. Almost two-thirds of expats surveyed agreed that the economic situations have improved since 2009, and 68 percent say career opportunities or financial gain were their main reason for moving to China.

Russia came on top as a No. 1 place for earning, disposable income and saving opportunity. Over one-third of expats in Russia earn over USD 250,000 – the country overall is a prime location for those looking to progress with their career and financial gain.

The difference lies in cost of living. While 76 percent of surveyed expats in Russia say food and drink are more expensive than in their homeland, over two-thirds of expats in China agree that everyday items are cheaper compared to buying at home.

The majority of expats sampled in China and Russia were from the United Kingdom.

“There’s a shift in global headquarters, but we can observe that people come to BRIC countries to work three to five years with intentions to go back,” says Noeleen Doherty, Senior research fellow at Cranfield University School of Management in Bedford, England.

Expats in the Middle East were shown to have a tendency to invest earnings back in their homeland. Of the expats sampled in Qatar and Saudi Arabia, none had or planned to invest in their host country.

”In BRIC countries they earn more and have a higher disposable income, but if you look at the trends they’re repatriating more wealth back into their home country,” Wood said. “We know from findings in the past they aren’t necessarily the best country to raise a family in.”

Eurozone offers quality

Spain and France: quality over quantity
While financial opportunity seems to be at an all-time low in Europe, the desire for a high quality of life outside a home country keeps expats clinging to countries such as Spain and France.

“In Europe, there seems to be investments in things like property, or things that make expats want to come back,” said Doherty. “When looking for expats with longterm plans, look at their investments.”

Indeed, Spain and France are two countries bottom-listed in the rankings, resting between No. 22 and No.25 as an overall ranking, income, disposable income and wealth hotspot.

However, over 30 percent of expats surveyed in both Spain and France were retired, and almost half were over 55 years old. Unsurprisingly, both countries ranked within the top 15 in the category of Luxury – despite economic falters, expats remain unharmed and continue to run their own business and swim in their backyard pools amongst grandiose property.

Finance trailed as at 8 and 9 percent on the occupation list.

“There’s an element of trade-off here between lifestyle, family and finance,” says Wood. “Spain hasn’t done well because the economy has deteriorated, but the type of expats living there is a factor.”

“We have to look at the packages that motivate people,” says Doherty. “Money is not always the answer.”

UK: unique demographic with a plummeting appeal
Although Europe’s finance struggles among expats can be arguably eclipsed by a 'rich' quality of life, drama sizzles in the United Kingdom. It doesn’t help that UK’s overall ranking stoops to No. 20 without much wiggle room for disposable income (No. 21) and luxury spending (No. 25).

The overall report finds five percent of expats accumulating more debt abroad, yet expats in the UK drown at 11 percent – the highest.

Even more shocking is how UK’s money trouble physically causes movement among expats – a large majority of expats in the UK note the deteriorating economy since 2009, and one in ten are actively looking to move home.

Expats in the UK, unlike the demographic norm, are mostly American (22 percent), Australian (14 percent) or Canadian (10 percent). Almost half work in finance, but at a younger age (half of expats surveyed were between 18 to 34 years of age).

The one plus: Over half of expats in the UK said vacations are more luxurious compared to holiday locales back home.

Central Europe: dead last
Results from Germany added a twist to expat demographics. Instead of the overall characteristics dominating the expat field globally, the typical expat in Germany is a middle-age American female with a background in education, if employed.

There are currently 50 United States Army installations in Germany.

Lagging behind at No. 25 on the overall league table is The Netherlands: Financially, the country hit rock bottom across the board as a hotspot for wealth, income and disposable income, rising only slightly to No. 23 in luxury rankings.

”A few years ago, when it was the place to expatriate, the eurozone was good for business. Expatriation comes in waves – there’s a downturn in EU countries and an upturn in BRIC countries,” says Doherty. “Companies have to be careful with what they offer, maybe there needs to be more spice for the pot.”

Belgium was only slightly higher with an overall ranking of No. 21, and Switzerland hit mid-level at No.14. Luxembourg was not listed in the 25 ranked countries.

Audrey Sykes /  Editor /  Expatica

1 Comment To This Article

  • Anatoli posted:

    on 12th October 2010, 01:45:54 - Reply

    You need some Russian in Russia, even in Moscow, at least the alphabet. Moscow and Saint Petersburg are the most popular with expats but other cities present good opportunities.