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Where is the Most Expensive Destination for Expatriates?

Where is the Most Expensive Destination for Expatriates?

Since relocation training forms such a significant part of the work undertaken by us here at Commisceo, it’s essential that we keep up to date with global changes and their impacts on all things ‘expatriate’.

Mercer, is just one of our trusted ‘go to’ experts.  As consultants in the fields of talent, investments and health, their annual Cost of Living surveys are a must read for companies engaged in the relocation of their employees. 

These surveys are essential to the companies with whom we work as the cost of living measures help dictate the cost of the expatriate package. 

Some countries have such a high cost of living that they become untenable target destinations for smaller companies with smaller budgets; quite literally reshaping their international investment and expansion activities.

What does the Cost of Living measure refer to?

Investopedia.com defines Cost of Living as ‘the amount of money needed to sustain a certain level of living, including basic expenses such as housing, food, taxes and health care. Cost of living is often used to compare how expensive it is to live in one city versus another locale’. 

It’s important to note however, that there is no exact method when calculating cost of living indices as the methods used by different providers undoubtedly vary. Therefore, although Mercer may earmark a country as the most expensive target destination for expats, the same country may appear as number two or three on the list of an alternative provider.  Assuming that the company providing the data is well trusted (which Mercer typically is) then the output becomes an important measure for Compensation/ HR / Mobility departments.  

Clearly, it’s an expensive activity sending an expat to a country with a high cost of living as the respective company must pay a ‘cost of living allowance’ to cover the differential in living costs faced by the expats. This allowance is a common feature of most expatriate packages.

So, which country did Mercer feature as being the most expensive destination for expats? 

The results may surprise you. 

Knocking Luanda (the capital city of Angola) off the 2015 lead position is Hong Kong which now tops the list as the expatriate city with the highest cost of living.

This puts Luanda in second position and renders Zurich to third position.  Surprisingly, Singapore, which has always been recognised as one of the most expensive expatriate destinations in the world is now in fourth position with Tokyo ranking in fifth place.

Global changes happen so rapidly that these indices change year on year – the changes may not be momentous in nature but change is always apparent.  With 2016 hot on the heels of 2017, it will be interesting to see whether Hong Kong retains its number one ranking.  At Commisceo Global, our expectation is that it will.

Expatriate Cultural Training 

Are you an expatriate? Boost the success and productivity of your assignment by enrolling on our cultural training programmes.  Whether you take part in an online cultural training programme, or, a customised cultural training webinar, our training programmes will ensure you settle more quickly into your new target home and that you are equipped with the skills need to build trusting relationships and to drive positive outcomes. 


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