Why have some expat destinations become less popular?
Hong Kong, Singapore, London, Shanghai and some Gulf countries like Kuwait, Oman and Saudi Arabia are all places with a long tradition of welcoming expats. However, since the last couple of years, they are becoming less attractive and are being deserted by foreign workers. The sky-high cost of living is the main culprit. In Hong Kong, and to a lesser extent London, political instability is also a strong factor. And in the aforementioned Gulf countries, job nationalization (where priority is given to hiring locals) is making life difficult for expats. Strict sanitary measures and border control in China are also making expats leave Shanghai.
Many expats leaving these destinations are relocating to new hotspots. They are looking for an affordable cost of living, no suffocating sanitary restrictions and good flight connections, and a vibrant local culture that is friendly towards newcomers.
What is the appeal of emerging expat hotspots?
Kuala Lumpur, Malaysia
Malaysia has long been the overlooked neighbor of the wealthier and more glamorous Singapore. However, expats struggling with the cost of living in Singapore are discovering that Malaysia has very affordable housing prices, a great mix of cultures and cuisines (Malay, Indian, Chinese, Middle-Eastern, Indonesian, etc.), a robust and affordable healthcare system, and a friendly English-speaking population.
The country has a 10-year Residence Pass-Talent permit for highly-qualified expats. A recent survey revealed that Kuala Lumpur was the best expat city of 2021, with nearly 80% satisfied with the cost of living there. Apartments in KL range between 443-764 USD per month (International Citizens), while the cheapest apartments cost around 700 USD/month in Singapore (Yahoo Finance). The country also ranks high for work-life balance; it has a professional culture that isn't hectic.
As Malaysia has a local oil and gas industry, energy bills there are also lower than the global average. The country also has a lot of local produce, which makes groceries more affordable. Furthermore, Malaysia has an excellent healthcare system that is affordable with international health insurance. Around 60% of Malaysians speak English well. The cheap, delicious food of Malaysia, as well as its many lush, tropical parks and resorts, definitely contribute to a good social life.
While some expats have complained of average or below average internet connection, cleanliness and safety, political stability, transportation, and promotion opportunities, these have not been dealbreakers for many expats. The three big pros – affordability, great work-life balance and a welcoming culture – have trumped the cons.
Lisbon, Portugal
Portugal is known for having one of the lowest costs of living in Western Europe. It also has many pro-expat policies such as the Golden Visa (permanent residency through the purchase of property), the D7 visa for foreigners who live off passive income from abroad (e.g.: retirees) or for freelancers (who meet a minimum income requirement), and schemes to attract expats to underpopulated regions. It is currently the most popular expat destination in Europe.
Many Americans who cannot afford property in the US are choosing to move to Portugal and fulfill their dream of being homeowners. Renting is also more affordable. In Bloomberg, an American expat, Allison Baxley, said that the coastal home she rents near Lisbon, which has three bedrooms and a pool, costs nearly 50% less than her former – and much smaller – apartment back in New York. She used to spend about 4000 USD on rent but spends only around 2000 USD now.
Many expats choose the capital Lisbon for its pittoresque historical architecture, its warm weather, its rich cultural landscape full of museums and theaters, and its great nightlife. Many also opt for Cascais and Lagos, two coastal towns very close to Lisbon. Like Kuala Lumpur, Lisbon has a relaxed work culture that makes having a work-life balance easy.
Dubai, United Arab Emirates
Unlike Kuala Lumpur and Lisbon, Dubai isn't cheap to live in. But it has many attractive points for expats who are able to afford its cost of living. First of all, it showed a commitment to having open borders and no strict lockdowns during Covid. Secondly, it is an ideal destination for finance professionals, especially those interested in fintech and cryptocurrency. And thirdly, it levies no income tax.
A one-bedroom apartment in Dubai costs an average of 1400 USD per month. Buying property in Dubai is affordable only to the ultra-wealthy. But with a well-paid job, an expat can lead a very good life in Dubai. The Crown Prince has announced a “metaverse strategy” to create 400,000 new jobs in fintech. It is also one of the first countries where cryptocurrency exchanges have been granted licenses to operate. It's thus a great expat destination for finance professionals who earn high salaries.
One reason financial professionals have left Hong Kong was the difficulty of traveling for business during the draconian lockdown. Dubai has given a sense of safety to jet-setters by remaining open throughout most of the pandemic. Like other Gulf countries, Dubai is also currently undergoing economic nationalization (called “Emiratization”), which now makes it harder to get employed there. But this nationalization is less sweeping than in other countries like Oman. A second con of living in Dubai is the extremely hot weather, although most spaces have air conditioning.
Bangalore, India
Also known by the official local name Bengaluru, this city in southern India is a rising tech hub. It's even been dubbed the “Silicon Valley of India.” Similar to how Dubai is a great destination for finance professionals, Bangalore is a great destination for expats who work in tech or are entrepreneurs.
Bangalore is among the top ten cities attracting venture capital investment, according to Dealroom. Between 2016 and 2020, it attracted 23.5 billion USD in investment, more than Singapore or Los Angeles. Tech professionals disenchanted with the high cost of living and lack of safety in Silicon Valley have often chosen to relocate to Bangalore.
As the Indian rupee is weaker than most of the world's currencies, the cost of living in Bangalore is very affordable. A three-bedroom apartment in the city center costs only about 450 USD (around 35,000 rupees) a month. Lower labor rates also make it possible to hire a full-time housekeeper for only around 200 USD and a full-time driver for 300 USD per month, says Kristen Dias, an Australian expat, on Travel Off Path.
Bangalore has poor infrastructure (poorly maintained roads, low-slung buildings, etc.), but it also has much safer streets than most of India, especially for women. Crime rates are relatively low, and the thriving tech industry has also given rise to many hip cafés, bars, bookshops and art venues. Most people in Bangalore can also communicate in English, especially in white-collar professional spheres.
Mexico City, Mexico
Mexico City is also emerging as a global startup hub. Unicornio, a newsletter about Latin American startups, published a list of the 28 best Mexican tech companies to work for in 2021. They include digital banking startups, grocery delivery platforms, housing companies, AI-based customer relationship management platforms and digital freight forwarders, among others. This showcases the variety of thriving startups in the city.
As the oldest capital of the Americas, Mexico City is as big as New York City and is rich in history and culture. It has plenty of museums, archaeological sites and theaters to visit. The website of the Secretary of Tourism lists all of the sites of interest in this megacity. It's easy to find sports events (especially for soccer), buzzing street food spots, hip bars and nightclubs, and scenic urban spots to admire the sunset from.
The cost of living is also very affordable in Mexico City. A one-bedroom apartment outside the city center will cost around 300 USD per month. At the heart of the city, it will cost around 500 USD. Eating out costs an average of 6 USD. Utilities should cost around 45 USD a month.
Some downsides to Mexico City, however, are low English proficiency among the locals and a lack of safety, especially for women. It's recommended to learn some Spanish before moving there. Expats should also be vigilant when taking a taxi alone, withdrawing cash from an ATM, choosing areas to walk through, etc. Polanco, the upscale expat neighborhood of choice, is considered safe to live in.
Rio de Janeiro, Brazil
The famous Brazilian coastal city is also a rising expat hotspot in Latin America. Its port and international airport make it a major commercial hub. There are many jobs for expats in shipping and logistics, TESOL (Teaching English as a Second Language), media and communications, pharmaceuticals, textile and oil there.
There is a good work-life balance in the city, which is aided by the relaxed beach culture and warm, sunny weather all year round. Carla Vianna, an American expat in Rio, writes in the Washington Post that her work-life balance has improved a lot since she relocated from New York. She now has much more time to spend on outdoor activities (in the “lush green mountains” and on the beach), at bars and clubs, and with friends.
The local government and tourism board have created a digital nomad program to boost the economy after Covid. This visa is valid for a year and can be extended for a second year. In July 2021, the City Hall launched a program that offers lower rates to digital nomads who are booking long stays at certified hotels, reported CGTN America. Coworking spaces have also joined this program. Coworking Town Praia de Copacabana has a stunning view of the sea, while EDX Coworking Rio de Janeiro - Centro is an excellent spot in the city center.
Jack Roaming, the website of the Luxembourgish digital nomad Jack Krier, states that while the cost of living isn't low in Rio de Janeiro, it's still affordable compared to Western cities. He estimates that an expat needs about 1500 USD a month. That includes 500-900 USD for rent and about 300 USD for groceries. The cons of living in Rio are the rampant economic inequality and political instability (caused by a far-right government in power). Learning some Portuguese is also recommended before relocating.
