For many professionals, the idea of working abroad is an exciting one—higher salaries, new career opportunities, and the chance to live in a different culture.
But from a financial perspective, is working abroad a good idea in reality?
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The reality is more nuanced than simply earning a bigger paycheck. Factors like cost of living, taxation, savings potential, and investment opportunities all play a crucial role in determining whether an expat truly benefits financially from working overseas.
This article breaks down the financial pros and cons of working abroad, helping you decide whether relocating for work is a smart financial move or an overrated dream.
Is working abroad worth it financially?
One of the biggest motivators for working abroad is the potential for higher salaries.
In industries like technology, finance, engineering, and healthcare, working in a global hub like Switzerland, Singapore, or the United States can offer significantly higher wages compared to similar positions in one’s home country.
But high salaries don’t automatically translate into higher savings or a better quality of life.
High Paying Expat Job, But High Expenses
A common misconception is that earning more abroad always means keeping more. While some expats double or triple their salaries, they often find that their spese di soggiorno rise just as much, if not more.
For example:
- Switzerland is one of the highest-paying countries in the world, with an average software engineer salary of $110,000 per year. However, Zurich and Geneva are among the most expensive cities globally, with rents for a small apartment exceeding $3,000 per month.
- The UAE offers tax-free salaries, but the cost of living in Dubai and Abu Dhabi has surged, with high rents, expensive private healthcare, and premium lifestyle costs that quickly eat into income.
- Hong Kong and Singapore offer competitive wages, but housing costs in both cities are among the highest in the world, making it difficult to save unless expats receive housing allowances from their employers.
Low Cost Expat Living, But Lower Income
On the other end of the spectrum, some expats take lower-paying jobs in countries where the cost of living is much lower, allowing them to save more in real terms.
For example:
- A remote worker earning $40,000 per year in the US might struggle to save much after rent, bills, and taxes. However, if they move to Thailandia o Mexico, where monthly expenses can be $1,200 or less, they may save more than someone earning $80,000 in an expensive city like New York or London.
- Many professionals working abroad in Eastern Europe, Latin America, and Southeast Asia report a higher standard of living despite earning less than they would in their home countries, due to the lower cost of essentials like rent, food, and healthcare.
How do expats pay taxes?
One of the biggest financial pitfalls for expats is taxation. Many people assume that moving and working abroad will automatically reduce their tax burden, but this isn’t always the case.
Depending on your home country and where you work, you may face double taxation, hidden expat taxes, and complex reporting requirements.
Tax Free or Low Tax Countries
Some countries offer tax-free income or significantly lower tax rates, making them highly attractive for expats.
- The UAE, Qatar, and Saudi Arabia – No personal income tax.
- Singapore and Hong Kong – Low tax rates, with Singapore capping personal tax at 22% and Hong Kong at 15%.
- Panama, Portugal (NHR program), and Malaysia (MM2H visa) – Offer tax breaks or exclusions for foreign-earned income.
Expats in these regions take home more of their paycheck, but they should still check whether their home country taxes foreign income.
Countries with the Highest Taxes for Expats
- The United States taxes its citizens on worldwide income, meaning Americans working abroad must still file US taxes and, in some cases, pay taxes to both countries.
- France and Australia have high income tax rates, even for expats working in high-paying jobs.
- European welfare states (e.g., Germany, Sweden, Denmark) offer great benefits but impose heavy taxes—sometimes over 40-50% on high earners.
What is double taxation?
Some countries have double taxation agreements (DTAs) that allow expats to avoid being taxed twice on the same income.
However, those working in countries without DTAs may lose a large portion of their salary to double taxation.
How do expats earn more?
If an expat earns a high salary in a low-tax country while keeping living expenses in check, they can build wealth significantly faster than they would in their home country.
Some of the best ways expats maximize their savings potential include:
Employer Benefits & Expat Packages
- Many multinational companies offer housing allowances, schooling stipends, and relocation bonuses.
- In some countries, companies fully cover private healthcare and pension contributions.
Low-Tax Investment Options
- Some expats invest in tax-free or low-tax financial products, such as offshore accounts or international retirement funds.
- Many foreign countries lack capital gains tax, making them great places for investing.
Currency Exchange Risks
- Earning in a strong currency (e.g. USD, EUR, GBP) and spending in a weaker one (e.g. THB, PHP, MXN) allows expats to save significantly.
- However, those earning in weaker currencies must consider exchange rate fluctuations, which can impact their savings if they later return to a country with a stronger currency.
Expats who carefully manage costs, take advantage of tax benefits, and invest wisely can save far more than they would at home.
When is working abroad a good idea? When is working abroad a bad idea?
Many people assume that expats make more money than workers in their home countries.
This isn’t always true. Depending on where you move, your industry, and your financial situation, working abroad can actually put you in a worse financial position.
Working in Countries with High Cost of Living
Some cities offer high salaries, but the cost of living is so high that expats end up with little to no savings.
If an expat moves for salary alone without considering the cost of living, they may find themselves financially worse off than before.
Mismanaging Expat Taxes
Many expats don’t realize that they might still owe taxes to their home country.
- Americans working abroad must still file US taxes and, in some cases, pay income tax even if they live overseas (unless they qualify for exclusions).
- Some European countries (e.g., France, Spain) have high tax rates for expats, meaning that even with a great salary, a huge portion is deducted for income tax and social security contributions.
- Lack of tax treaties – If an expat moves to a country without a tax treaty with their home country, they may end up paying taxes in both places.
Expats who don’t research tax obligations before moving can find themselves paying more in taxes than they expected, reducing the financial benefits of working abroad.
Misjudging Visa & Work Permit Costs
- Many countries require work visas, which must be renewed every few years at significant cost.
- Some work visas require proof of savings, meaning an expat must maintain a minimum bank balance (e.g., Thailand’s visa rules for remote workers).
- Sponsorship rules – In some countries, companies must sponsor work permits, but if an expat loses their job, their visa may become invalid.
Without long-term visa stability, an expat’s job security is always at risk.
Choosing a Lower Quality of Life
Many expats move abroad expecting better career opportunities, but in some cases, working abroad can actually damage their long-term career prospects.
- In many countries, employers prefer hiring local workers over expats. Even if an expat lands a job, promotions or leadership positions may be limited to locals.
- Many expats struggle to find jobs back home if they return after years abroad.
- Expats may fall behind in professional networking back home, making it harder to compete for jobs in their home country.
Not Considering Culture Shock
- Asia & the Middle East – Some workplaces have strict hierarchies where junior employees rarely challenge authority. Western expats may struggle to adapt to rigid corporate structures.
- Europe – Some countries, like France and Germany, require advanced degrees or formal qualifications, even for experienced professionals.
- Latin America & Southeast Asia – Work environments are often relationship-based, meaning who you know matters as much as what you know.
Safety & Legal Issues
Some countries lack strong legal protections for expats—if an expat faces workplace discrimination, wrongful termination, or legal disputes, they may have limited recourse.
Political instability or crime can make living in certain countries risky for expats (e.g., Venezuela, South Africa).
Working abroad can be an incredible opportunity, but it requires extensive planning and realistic expectations. Expats who fail to research financial, career, and cultural risks often struggle more than they expected.
Instead of blindly chasing a higher salary, future expats should analyze visa requirements, taxes, work culture, and financial realities before making the move. If you are considering working abroad, consulting an expat financial advisor is highly recommended.
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Adam è un autore riconosciuto a livello internazionale in materia finanziaria con oltre 830 milioni di visualizzazioni di risposte su Quora, un libro molto venduto su Amazon e un contributo su Forbes.
