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Nearly 80 per cent of Middle East expats not securing finances – Survey

Countries in the region were ranked among the top 10 popular destinations for expats to relocate

Despite slowing economic growth in the Middle East people continue to immigrate to tap the attractive job markets in the region.

In a survey of mostly the nationals from the United Kingdom, India and Pakistan, HSBC found out that the expatriates based in the region earn more than anywhere else.

The UAE, Qatar, Bahrain and Oman were ranked among the top 10 popular destinations for expats to relocate.

Expatriates in the region enjoy some of the most generous employment packages with most of them are provided with health and medical benefits while 60 per of them receiving accommodation allowances.

Managing finances

However, a new survey reveals that eight out of 10 expats in the region are not securing their finances.

The study by leading wealth management firm Prestige Wealth Solutions (PWS) suggests that nearly 80 per cent of the expats are not taking enough measures to protect their money.

The financial advisory firm says expats should seek unbiased advice soon as they arrive in a new country in order to secure and benefit their finances.

“Expats in the Middle East face financial issues that are often alien to their countries of origin,” says Craig McConnon, Group CEO of PWS, adding that they will be in need for global market knowledge and bespoke advice therefore it is important to talk to a professional financial adviser.

HSBC’s Expat Explorer: Balancing life abroad survey revealed that nearly three-quarters (74%) of expats globally find at least one aspect of managing money abroad a challenge.

The most common financial problem faced by expatriates managing finances in different currencies. Nearly 37 per cent of them identified it as a as a key challenge.

PWS lists five reasons why a financial adviser is relevant to the UK expats, who constitute the majority in the survey:

Regional issues are often highlighted

Life and critical illness cover to protect families from pre-existing UK policies are often invalid in the Middle East and understanding details of the will is vitally important – especially in a country that follows Sharia Law.

Higher disposable income requires professional planning

Often expats have higher salaries than in their home countries, which can naturally lead to higher levels of disposable income. This combined with a general lack of company benefits, in areas such as company pension schemes, reinforce the need to sit down with an independent financial adviser, to explore all the options available.

Alternative tax efficient environments available

Although many expats move to the Middle East from the UK, they are often surprised to learn that they can bank or invest in other offshore jurisdictions such as the Isle of Man, Guernsey or Jersey, to name a few. Often these alternative locations can offer additional benefits, so speaking with an independent financial adviser who can explain in detail pros and cons of all jurisdictions, is strongly advised.

Detached from home country laws

Many expats and particularly longer-term expats can become unfamiliar and detached from legislation in their home countries. It can often be an out of sight and out of mind mentality. Misunderstanding of rules and regulations can potentially lead to costly assumptions being made. A common misunderstanding of many UK expats is confusion over tax residency and domicile status. Meeting an independent financial adviser can help add clarity to such matters.

Expert advice

Often viewed as a service reserved only for the HNWI (high net-worth individual), financial advice is becoming more commonplace to British expats seeking to explore their options while they live and earn in the Middle East.