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The Perfect Country?

February 9, 2011 in Expat Locations by Paul Allen | No comments

Zürich has long-featured at the top of the list of cities offering the best quality of life in the world. Having finally visited for the first time last week, I can now see why.

Mind you, I wasn’t so enthused when I looked out the plane’s window as we came in to land. The pilot informed us (a little too cheerily, I thought) that it was -3°C, and the sky was an ominous grey.

Still, the city soon made up for it.

I had a few hours to kill before a business meeting, so I took the opportunity to amble around the Old Town, before finding my way through the winding streets to the Kunsthaus art museum.

The museum lacks the grandeur and wealth of treasures that the Louvre, National Gallery or the Prado can boast. But with a collection of works spanning six centuries – including some beautiful pieces by Canaletto, Monet and Van Gogh – it is well worth a trip.

And Zürich has a lot more to offer. The cafes, restaurants, shops, and its beautiful lake make Zürich an enviable place to live. Easy access to Switzerland’s world class ski resorts has a certain attraction too!

The Swiss advantage

And Switzerland’s appeal is not limited to its culture or sporting activities.

In its most recent annual survey, the World Economic Forum crowned Switzerland as the most competitive nation in the world for the second year running.

Switzerland was followed by Sweden, with Singapore third in the rankings. The United States slipped to fourth. The United Kingdom was 12th.

Running like clockwork

Such rankings were underscored on my way home.

The Swiss, of course, are famed for their timekeeping and efficiency. When the trains say they will arrive at a certain time they do, and to the second. They are smooth, clean and comfortable. Getting around Zürich is a cinch.

By contrast, getting back to my home in the UK was anything but smooth and comfortable. London’s Underground system was ground-breaking (literally) when it opened 150 years ago. Now though it is showing its age. There are constant repairs, and too many people jostling to get on.

The subsequent overland leg of my train journey was even worse. Broken signals, delays, overcrowded carriages. Suffice to say, it eventually took me twice as long to get from London’s City airport to home as it had taken me to fly from Switzerland to the UK.

Having lived abroad for many years, I know that nowhere is perfect.

Britain has its faults, for sure – the climate, the overstretched transport infrastructure, the lack of space, its cost of living. Yet coming back to live in the UK has helped me see it with new, more sympathetic eyes, better able to appreciate the wonderful things it does have to offer, and not just the bad bits.

Still, I can see why there is so much interest – especially among those well-paid financial types – in relocating to Switzerland.

Much of the reason may be to do with the favourable tax regimes they can expect to find in the country’s various cantons.

But I’m sure Switzerland’s long-trumpeted quality of life advantages must be as much of a draw.

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European Quality of Life Advantages Called Into Question

October 18, 2010 in Expat Advantages, Expat Locations, France, Living Abroad Pros and Cons by Paul Allen | No comments

So France has the best quality of life in Europe. Or at least that was the finding of a recent study by consumer comparison service uSwitch.com, as I highlighted in a recent posting[1].

I imagine the residents of France may be thinking something different as this week’s round of strikes and protests gets underway.

News reports say the strikes are set to widen to include a range of sectors, including road transport, energy, posts, telecommunications and public service. The industrial action has brought fears of fuel shortages as workers at oil refineries walk out, and rail chaos as train staff join in, threatening to bring the country to a standstill.

The protest has been spurred by moves to raise the minimum retirement age from 60 to 62, and the full retirement age from 65 to 67 years – a change that rather undercuts one of the advantages of French life highlighted by the uSwitch.com survey. The government claims it is needed to prevent the country’s pension deficit from spiralling out of control and threatening the system as a whole.

In total, Nicolas Sarkozy’s government has announced plans to cut spending by €45bn over the next three years in a bid to meet its budget deficit target.

 

Meanwhile Spain, which came second in the uSwitch.com quality of life rankings, has seen unemployment more than double (to about 20%) since 2007. In a bid to curb its budget deficit, the government is raising the top level of income tax and introducing a range of austerity measures for 2011 designed to cut spending by 8%.

Of course, the UK faces its own economic difficulties – as, for that matter, does the United States. But if you’re aiming to escape your home country’s problems and find a better quality of life by moving abroad, it’s important to remember the grass is not always greener on the other side.

[1] http://expatliving101.com/living-in-spain/what-quality-of-life-can-you-expect-abroad/

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Tax Threat to UK’s Global Competitiveness

October 15, 2010 in International Cost of Living, Living in Britain, Working Abroad by Paul Allen | No comments

A new report published by the City of London Corporation[1] suggests the lack of tax predictability in the UK is now “out of control,” and is threatening the country’s position as a leading global financial centre.

The report polled members of the banking, insurance, asset management, hedge fund and private equity communities on six factors: predictability, overall tax burden, attitude of tax authorities, network of tax treaties, complexity and cost of compliance.

Every respondent gave the UK a poor rating on predictability. It is the area where the UK fared worst compared to other countries, but which the report says is the most important factor in judging competitiveness.

The authors said surprise changes such as the introduction of the bank payroll tax and bank levy, and the increase to 50% in the top rate of income tax were creating uncertainty and changing the financial services industry’s perception of the UK. In addition, the new rates and measures meant “the UK is now seen as a high tax jurisdiction not dissimilar to continental countries.”

However, despite fears that changes to the UK’s regime would lead to an exodus of financial institutions and people to more favourable tax jurisdictions, such as Switzerland, Singapore and Hong Kong, that has not materialised in practice, at least thus far. Instead, for the time being London remains a key financial hub, attracting international investment, as well as expatriate and domestic workers.

Holding on to its position in the world as an attractive place to live and do business is the UK’s challenge going forwards. Relying on its weather as a source of appeal certainly won’t do the job!

[1] Taxation of the Financial Services Sector in the UK: Predictability and Competitiveness, prepared by Charles River Associates for the City of London Corporation, October 2010, http://217.154.230.218/NR/rdonlyres/E3CEF4F7-479B-46B4-AB93-29DF5F673B53/0/TaxationofFinancialServices.pdf

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Swiss Watch

July 9, 2010 in Expat Locations by Paul Allen | No comments

Alan Howard, founder of leading hedge fund Brevan Howard Asset Management, has joined the expat ranks.

Recent reports say Howard, who is swapping London for Geneva, is among a number of financial luminaries to have left the UK. And there are fears many more will follow, driven by concerns about rising tax rates, a less attractive business environment, and quality of life issues.

Certainly Geneva has its attractions. Low tax is an obvious one, especially for those wealthy City types. For example, alternative investment managers (i.e. those at hedge and private equity funds) can obtain a special tax status that enables them to discount chunks of their taxable income. Indeed, Switzerland as a whole offers many tax advantages.

Then there are the lifestyle benefits – the proximity of world-class ski resorts, sailing on the country’s many lakes, the beautiful scenery, its excellent environmental record, high quality health and education systems, etc, etc.

And that is backed up by Mercer’s 2010 Quality of Living survey, which put Geneva third in its global rankings, one place behind Zurich[1].

The flipside is that Geneva also ranks as one of the most expensive cities in the world, coming in fifth in Mercer’s recently released Cost of Living survey[2].

With a reported fortune of £875 million that won’t faze Alan Howard. Still, it might give the rest of us pause for thought.

[1] Mercer 2010 Quality of Living survey, 26 May 2010 http://www.mercer.com/qualityofliving

[2] Mercer Worldwide Cost of Living survey 2010 – City rankings, 29 June 2010, http://www.mercer.com/costoflivingpr#City_rankings

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Migration and the UK Coalition

May 14, 2010 in Living in Britain by Paul Allen | No comments

 

It’s not quite the West Wing, but the UK election and subsequent coalition negotiations have turned into a fascinating drama (mind you, I’m a politics graduate, so perhaps I’m biased, and a little sad).

There has even been a bit of humour. At their first joint press conference, Prime Minister David Cameron and his Liberal Democrat deputy Nick Clegg stood side-by-side in the garden at 10 Downing Street to set out their coalition stall. It was followed by a question from a journalist: “Prime minister, do you now regret when once asked what your favourite joke was, you replied ‘Nick Clegg’?” he asked.

Cameron looked suitably embarrassed, but Clegg took it in good heart. Indeed, it even revealed the relaxed camaraderie that seems to be burgeoning between the two leaders. Is this politics growing up at last? A recognition that people from different parties can work together in that stock phrase of the last few days, the National Interest?

There is certainly a lot to do, as the new government’s agenda shows. And from an expat perspective, it reveals some important choices and changes.

A notable one is immigration. It was a big area of difference during the election campaign. But the Conservatives’ proposals have now won out. As a result, the government will introduce an annual cap on the number of economic migrants from outside the European Union that are allowed into the country.

As for what happens to tax levels and spending on core services such as education we will have to wait for the upcoming Budget, which will offer the first detailed breakdown of the government’s programme.

The question then will be can this historic coalition succeed in making the UK a better place to live, both for people thinking of moving to the country and those already there? I can only hope so.

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