Sunday, December 19, 2010

Expat Living Singapore - The Expat Explorer Survey 2010

According to HSBC The Expat Explorer Survey 2010, Singapore is ranked 4th among 25 hot expat destinations in terms of key economic elements, income, disposable income and luxuries:

Singapore acts as an attractive location for high earners, which is unsurprising as it tops the economic league table on income score with nearly half (45%) of expats earning over $200,000 per annum compared to the worldwide average of just 21%. Expats based in Singapore benefit from lower tax than in their country of origin – only 8% believe they spend more on tax than they did at home. Of those surveyed, 61% also think that they have more disposable income than when living in their country of origin compared to an overall average of 42%.

However, with higher salaries and higher disposable incomes come higher costs; many think they spend considerably more than in their country of origin on accommodation (72% in Singapore vs. 46% overall) and food and drink (60% vs. 47%).

Expats in Singapore also believe they are already seeing signs of an improved economy, with over half (51%) agreeing that the economic situation in Singapore has improved since last year (compared to 22% overall). They are also much less worried about having to monitor spending (8% in Singapore compared to an overall average of 23%) or reduced career opportunities (15% vs. 20%).

[Expat Exlorer Survey 2010, Page 22]
Taxes in Singapore are very attractive. Actually, one of the main reasons behind Singapore's huge percentage of expats with higher disposable incomes is Singapore's tax system. Singapore imposes one of the least rates of personal and corporate income tax, enabling its residents to retain a higher portion of their income. Singapore's personal income tax rate starts at 0% and is capped at 20% (above S$320,000). The corporate income tax rate is approximately 8.5% for profits up to S$300,000 and a flat 17% above S$300,000. The Expat Explorer survey cites that 61% of the 109 expats surveyed in Singapore think that they have more disposable income than they would had they been living in their country of origin[1]. Last year I have paid around 6 percent of my gross income with a salary just below 100K (yes I do not belong to the >200K expats group yet). Around 20% of the same income would go as tax in my country of origin. Also I pay 7% VAT in Singapore which is 18% for most of the goods in my original country.

I agree with the cost of accomodation, it is very expensive and eats up a considerable amount of your income. But for me, the food and drink are cheaper in Singapore. I do not drink alcohol a lot (which is very expensive in Singapore due to taxes) and I eat in cofee shops and food courts a lot where you can find good and cheap food.

Singapore is also getting costlier. According to Expat-Essentials Singapore is costlier for expatries now. ECA International found that Singapore is the eighth-most expensive city in Asia for expats. Singapore was placed No. 9 last year. Globally, Singapore is the 42nd-most pricey a huge jump from from 79th last year. In Asia, Singapore is behind the likes of Japan, Hong Kong, Beijing, Shanghai and Seoul. And things will get costlier according to ECA. Inflation and a strong currency will continue to drive expats’ costs in Singapore ever higher next year.

According to the survey the wealth gap between East and Europe is widenning. This survey shows that the wealth is moving to the East. The Middle East, Singapore and Russia dominate the top quartile of the Wealth Hotspot leader board, while expats in mainland Europe and South Africa are accumulating the least amount of financial 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, significantly higher than the overall average of 13%.

Mainland Europe, however, dominates the bottom five positions 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 figure 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.
[Expat Exlorer Survey 2010, Page 5

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