Benefits of being a finance professional abroad
A 2015 study by the human resource consulting firm Robert Half states that 59% of finance leaders assign great value to international work experience when deciding on whom to promote to top positions. This is the case, especially in large multinationals, which greatly value firsthand knowledge of the global market and of international banking, regulatory and accounting standards.
Those leaders also value how professionals with international experience have better foreign language and communication skills, technical expertise, specific product knowledge and work ethic. As financial hubs tend to be cosmopolitan, these employees will have been exposed to a wide set of cultural nuances, business etiquette and languages. They will have greater adaptability skills and greater resilience when facing learning curves.
Competition for top jobs in finance is always tough, and international exposure can demarcate one worker from another with the same degrees or years of experience. If an expat moves back home after 2-5 years in a financial hub like Geneva or Singapore, they will have more power to negotiate for a high salary in their home country.
There are additional benefits that the professional will see in the host country itself, according to Investopedia. Income tax is low or non-existent in many financial hubs like Dubai (zero) and Switzerland (low). You can also be paid in major global currencies like the US dollar or euro in international financial hubs. If you are from a country with a weaker currency, this will benefit your purchasing power and long-term savings. Bonuses for finance professionals are also extremely high in certain financial hubs.
If you were headhunted directly by the foreign company, they will likely also pay for your housing, at least during the transition period. You can receive a living from home allowance, especially if you were posted abroad by a multinational who you were already working for back home. The labor law of your country of expatriation might offer other benefits, like more paid vacation time.
The Great Resignation in the US during the pandemic has created many vacancies in international financial hubs. It is hence an excellent time to relocate.
Where should you move for a finance career?
- Luxembourg
According to the career advice section of Emolument, Luxembourg ranks as the best European destination for financial professionals. While it has lower annual bonuses than other financial hubs, its high base salaries and great work-life balance makes it the most attractive hub overall. Hence, while the lack of an aggressively competitive culture is not conducive to ‘making it big,' the Duchy offers unparalleled stability to mid-career professionals.
It is an especially good destination for accountants and auditors. All of the Big Four accounting firms (PwC, EY, KPMG, Deloitte) are well-established in Luxembourg, according to ACCA's website. These two types of finance professionals receive the second-best average compensation package in all of Europe: €50,500 (Emolument).
Luxembourg has other perks as an expat destination. It has a progressive work environment, with the lowest gender wage gap in Europe – 0.7%, according to Eurostat. It is highly expat-friendly, with 70% of the 630,000 residents being from 160 different foreign countries. According to ACCA's website, the accessibility of nature spots and the proximity to all other major European cities also attracts expats there.
- Switzerland
Switzerland has a long-standing reputation for banking and asset management in its main financial centers of Geneva and Zurich. According to the official website of the city of Geneva, the country manages 27% of the world's private offshore fortune, the highest percentage of any financial hub. Switzerland is also at the forefront of new sectors like fintech and sustainable finance; it even combined the two to launch the Green Fintech Network in 2020.
Three aspects stand out in the Swiss finance industry: very high base salaries, very high bonuses and low taxes. Switzerland offers the best pay to finance professionals in the whole of Europe, regardless of the specific sector. For example, clearing and support positions in banks pay an average of €116,000 in Switzerland, while the UK average is €80,000 (Emolument). Bonuses are also highly competitive: in asset management, the average is €23,000.
Even as Geneva and Zurich remain some of the most expensive cities worldwide, a well-paid finance professional can afford to live there. The local taxation law also facilitates wealth acquisition. Income tax is capped at a maximum of 11.5%, and no tax is levied on foreign real estate, investment and permanent establishments.
- Frankfurt
This German city is a major financial center of continental Europe. Like Luxembourg, it has welcomed many companies which left the UK following Brexit. It is home to nearly 200 banks, most notably the headquarters of the European Central Bank and of the Deutsche Bundesbank. The perks of working in Frankfurt include political and economic stability, the proximity of all resources (the city is relatively small), and affordable rent and cost of living, according to the website Germany Trade & Invest. Work-life balance in the finance industry ranks as average (Emolument), and the city is highly cosmopolitan.
- New York
While London was affected by Brexit, New York has remained the biggest financial center in the world. It is home to Wall Street and two of the largest stock exchanges by market cap, NYSE and Nasdaq. With 600 fintech companies, the city is also home to the biggest fintech industry worldwide. Bonuses are incredibly competitive in the US: in 2021, bonuses on Wall Street hit a record high average of $257,500, despite inflation.
On the downside, if you prioritize work-life balance over big bonuses, New York might not be the best place for a finance career. The New York Times reported in February 2022 that investment bankers there complain of too much pressure at work and excessively long hours. Goldman Sachs, particularly, saw 15.2.% of its workforce leave during the Great Resignation. Its junior investment bankers were saying they were burnt out from a 110-hour workweek.
- United Arab Emirates (UAE/Dubai)
The UAE has consistently ranked as the best expat destination in the Gulf, and it is de facto the financial center of the MEASA (Middle East, Africa, South Asia) region. Moreover, Dubai had relatively fewer border restrictions than other countries during the pandemic, which shows commitment to being open to foreign workers. Indeed, 82% of the population is from abroad.
In July 2022, the Crown Prince of Dubai announced a new “metaverse strategy” to create 400,000 new virtual jobs in the next five years, including in fintech and cryptocurrency. The country was one of the first to grant licenses to crypto exchanges to operate on their territory, says Fortune Magazine. Dubai is hence a great destination for finance professionals interested in fintech.
Wealth acquisition in finance jobs is also easy in Dubai, as the country does not levy income tax on individuals, irrespective of their earning bracket.
- Singapore
This Asian financial giant has gained the most from the exodus of finance professionals out of Hong Kong. While compensation packages are lower in Singapore than in Hong Kong, they still remain high. Many professionals prefer the political and economic stability of Singapore over slightly better compensation. Like Hong Kong, Singapore also uses English, the global lingua franca.
The Global Financial Index ranks Singapore very high in terms of readiness to embrace new technology and markets. Hence, Singapore is currently the leader in Asia for fintech and cryptocurrency. Singapore is also a hub for asset and fund management, with 250 firms solely dedicated to these in the small city-state.
However, on the downside, expats rate Singapore poorly for work-life balance and the cost of living, which is the same situation as in New York. A 2022 study by the American insurance firm Cigna reports that 95% of expats in top positions in Singapore, including in finance, feel burnt-out. The cost of accommodation and workload were cited as major stressors.
- Other destinations
The financial centers of London, Shanghai and Hong Kong are currently facing challenges that other hubs are not, which makes them more difficult to recommend at the moment.
The fate of the UK's financial industry still remains uncertain as the consequences of Brexit are unfolding. The British government is implementing measures to revive the City, but over 7000 finance jobs have already shifted to EU countries (Consultancy.uk). As for Shanghai, the home of the world's third largest stock market, remained closed to most new expats since March 2020, when China's national borders were closed because of the pandemic. Hong Kong shares these struggles: entry into the city is complicated because of mandatory quarantines and red tape, and there has been an exodus of expats since 2014 because of political instability.
Amsterdam and Dublin will likely become top financial centers in the next decade. Dublin is the European city that has welcomed the most jobs which have left the post-Brexit UK, and its business-friendly tax environment has turned it into a tech hub for major companies like Google, Meta and TikTok. It is hence a great place for the fintech industry to develop. Amsterdam is also seeing a fintech boom, according to World Finance. The Dutch capital also attracted many companies previously based in the UK due to its smooth regulations.
