Expat Trends

Brooklyn Bridge, New York

Brooklyn Bridge, New York

During the later half of the 20th century, expatriation was dominated by professionals sent by their employers to foreign subsidiaries or headquarters. Starting at the end of the 20th century globalization created a global market for skilled professionals and leveled the income of skilled professionals relative to cost of living while the income differences of the unskilled remained large. The cost of intercontinental travel had become sufficiently low such that employers not finding the skill in a local market could effectively turn to recruitment on a global scale.

This has created a different type of expatriate where commuter and short-term assignments are becoming more common and often used by organizations to supplement traditional expatriation. Private motivation is becoming more relevant than company assignments. Families might often stay behind when work opportunities amount to months instead of years. The cultural impact of this trend is more significant. Traditional corporate expatriates did not integrate and commonly only associated with the elite of the country they were living in. Modern expatriates form a global middle class with shared work experiences in a multi-national corporation and working and living the global financial and economical centers. Integration is incomplete but strong cultural influences are transmitted. Middle class expatriates contain many re-migrants from emigration movements one or two generations earlier.

Where the initiative for expatriation does not come from employers but originates from individuals, management researchers describe this as self-initiated expatriation (SIE). There are also expatriate executives that are appointed by local companies in distant countries rather than being posted there by foreign multinational corporations. Some Asian companies, for example, have recently hired a number of Western managers.[6] These executives can also be viewed as self-initiated expatriates.

In Dubai the population is predominantly expatriates, from countries such as India, Pakistan, Bangladesh and the Philippines, with only 20% of the population made up of citizens. The continuing shift in expatriates has often been difficult to measure. According to UN statistics, more than 200 million people would be living outside of their home country in 2010. However, this number also includes economic migrants.

Expatriates qualify for and enjoy access to a wide range of financial products, investing offshore in products not restricted by the financial services or tax regulations in their home country or the place where they live now.

In terms of influx of expatriates, the most popular expatriate destinations are currently Spain, followed by Germany and Britain.

The Expat Directory[who?] is currently collating information on expatriate movements to provide a statistical overview of expatriate origin and destination countries. Current statistics show that the majority of expatriates originate from the United States. The questionnaire aims to provide further information or key destinations and the length of time that expatriates spend overseas. The survey will remain open ended with monthly snapshots collated from March 2010.

Europeans living abroad

In terms of outbound expatriation, as of 2009, the United Kingdom had the highest number of expatriates among developed OECD countries with more than three million British living abroad, followed by Germany and Italy. On an annual basis, emigration from Britain has stood at about 400,000 per year for the past 10 years. Expatriates from the UK have the advantage of being able to convert their existing pension scheme into a Qualifying Recognised Overseas Pension Scheme (QROPS), often providing tax advantages in other countries with lower tax rates.

U.S. citizens living abroad

During the Vietnam War about 100,000 American men went abroad to avoid the draft, 90% of them going to Canada. There are currently an estimated 6 million Americans living outside the United States. The US is the only industrialized country to tax citizens on income earned abroad, as evident in the listing under International taxation, even when those citizens are taxed by their countries of residence, though US citizens are allowed to exclude their first $91,400. Additionally, a new 2010 US law known as FATCA requires expatriates to report any foreign bank accounts exceeding $50,000, with heavy fines for noncompliance. American expatriates have also frequently been denied service at banks and other institutions in their countries of residence, as the US government requires other nations to abide by its banking and financial laws when dealing with its citizens. As a result, hundreds of US expatriates renounce their US citizenship every year.

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