Often inbound expats are seen as imposing a cost for the government of the host country.
There are a number of reasons for this , including funding its immigration system to deal with issuing work visas and naturalization procedures. In some cases there are legal expenses of deporting people who overstay their visas.
Then there are a range of other costs including public infrastructure costs, healthcare and education costs.
While dealing with expats can be an initial economic burden, it is clear that at the same time an inflow of expats brings positive effects to the economy, providing a positive impact on GDP.
Expats contribute to a country’s wealth
A recent study on world wealth shows some interesting figures: the leader in the overall wealth ranking is the US with $60.7 trillion in assets owned by individuals (property, cash, equities, business interests) minus liabilities.
It is not coincidental that the US (as the wealthiest country in the world) is also the world leader in the total number of migrants, outnumbering the second wealthiest country on the list, Saudi Arabia, by 37 million people.
The US is on the top 10 list of rankings based on wealth per capita, while China, Japan and India with inflow of expats of less than 0.2% (while following closely following the United States in the overall wealth list) are way down the list in terms of per capita findings.
Expats bring new skills to host countries
Countries with the highest percentages of expats among the total population – more than 70% – Saudi Arabia, Qatar, Kuwait, UAE are not surprisingly among the top 5 destinations, voted by expats as having the best opportunities for personal financial growth.
The oil sector is one example of an industry where expat workers earn more than local workers. Taking the UAE as an example, the average expat Oil and Gas worker earns $USD127K per annum, while the average income for locals in the Oil and Gas sector is just $USD46K.
It is worth mentioning that according to the HSBC report, UAE has the highest percentage of working expats – 92%, with the top industries being finance and engineering.
Continuing down the list of the countries with the highest migration rates, next comes Monaco and Lichtenstein (more than 45% of total population); wealth per capita in Monaco reaches astonishing $2,144,000, Lichtenstein follows with $786,000. The expats contribution to these numbers is undeniable: while the Gulf countries attract mostly global employees, European countries attract more entrepreneurs than employees.
Expats not only bring their knowledge to the new communities, but these 3% of the world population, who live “on the move”, contribute to the prosperity of their host countries by relocating their financial wealth and spending it in Expatland.