The Middle East is flourishing. Middle Eastern countries such as the United Arab Emirates, Saudi Arabia, Qatar, Bahrain, Kuwait and Oman are becoming the home of more businesses with many people going to these areas to work from Europe and the United States.
The main reasons why people who can are choosing to work in the Middle East is the opportunity to earn tax free income. Many go to this area on a temporary basis to earn before moving back home a few years later. Many companies offer free accommodation which means expenses are significantly less than at home. It is not just businesses who want Western workers, but schools and other service based industries, such as hospitals.
Salaries are sometimes lower, but can be equal to Europe. As there is no tax the take-home pay is significantly more than in Europe. If we take the UK as an example, those earning over £37,000 a year pay 40 per cent tax, while those earning over £150,000 pay 50 per cent. If someone is earning the same in the UAE or Kuwait, for example, but tax free then in reality they are keeping much more. Even if earning a little less than in Europe the money employees keep at the end of the month will be higher.
On hziegler.com there is a comparison that shows just how much more can be earned in the Middle East. If we take their figures for the US and compare then to the UAE, we can really see the difference. If earning $60,000 annually in each, someone in the US is paying $15,000 in tax, while someone in the UAE is paying absolutely nothing. If provided, accommodation can also be nothing while in the US is an estimated $10,000 per year. Transport and utility costs are also more in the US meaning the total spent on these factors is just $2,100 in the UAE, but $31,400 in the United States, which means employees only have just over half of their earning left. According to the hziegler.com figures you end up $29,300 better off every year in the UAE as people are able to save the majority of their income. Even if someone spends another $10,000 a year, they still end up $60,000 better off after three years if working in the UAE compared to the US.
Other benefits of living and working in the Middle East are that there is usually six week annual holiday, medical needs are often paid for by companies, and many get paid a yearly service award, which is effectively a yearly bonus.
There are of course some negatives. It is often not possible to take your family, which is difficult for many, and the culture is very different to the West. This is why many work in the Middle East for a few years to save a significant amount of tax free income and then return home with this money left over.
Andrew Marshall (c)
Masahati is a portal for Kuwait Real Estate.
Hziegler Statistics
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