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The United Arab Emirates have long been one of the top expat destinations in the world, drawing in highly qualified workers from around the world with the promise of a tax-free salary. Under such circumstances, the already reasonable wages on offer to qualified expats can look positively generous, and enable many workers in the kingdom to put money aside for a rainy day. This is the very same money which would otherwise have been eaten by tax in most other countries.
Moving to the United Arab Emirates can therefore be very beneficial from a financial aspect, allowing hard working individuals to get ahead and “feather their nest” with a generous income and tax-free environment.
So strong has the pull been that today native Emiratis make up just 20% of the country’s population; the remainder consists of a vast range of expat workers, who flock to the desert state for the career opportunities that have historically abounded here.
However if recent research is to be believed, all is not well in this wealthiest of nations. So much so, that fully 50% of all the expats surveyed recently stated they were considering leaving for opportunities elsewhere. If true, this could see over 3 million residents of the UAE exiting its borders; an unprecedented situation which could have serious consequences for the UAE.
And the reason for this potential mass exodus? Apparently, the biggest issue experienced by expats in the UAE is simply the cost of living. When the costs of living in the UAE are broken down, the greatest concern – cited by 56% of respondents – was the cost of housing. It seems that as with so many other developed nations, property prices have become an Achilles heel, making it difficult for all but the wealthiest individuals to prosper.
For those who want to live a decent lifestyle in a nice property- whether rented or bought – they need to be earning a vast sum of money – something that is generally out of the question for the average expat worker here.
As a result, as astonishing 25% of all the expats surveyed in the UAE said they were unable to save anything, with much of their salaries being taken up on everyday living expenses. One has to wonder how it must feel to move away from family and friends for one’s career, only to wind up with no more money than if you had stayed at home.
The fact of the matter is that a key reason why many expats are open and willing to move to this otherwise hot and dusty country is because it can simply make financial sense. A few years working in a tax-free environment can be enough to set one up with a comfortable nest-egg for the future. However if the costs of living are rising so much as to make this dream impossible then it is little wonder that expats are starting to express concerns and consider moving abroad.
Only time will tell whether the Emirati government manage to get this rising property market under control, or whether many of their dedicated expat workers will leave the Kingdom for better-value competitors.
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Expatriate Group & Expatriate Healthcare are trading styles of Strategic Insurance Services Limited who is authorised and regulated by the Financial Conduct Authority (FCA). FCA Firm reference Number is 307133. Strategic Insurance Services Limited is authorised to carry on Regulated Activities in accordance with the permissions granted by the FCA under PART IV of the Financial Services and Markets ACT 2000.