Lovely as life in the U.S. can be, some Americans can’t ditch their passports fast enough.
We’re not just talking about Tina Turner either. The pop diva capped off her recent nuptials by renouncing her U.S. citizenship in favor of a Swiss passport, and she’s far from alone.
A record number of Americans (nearly 2,400) gave up their citizenship this year in order to test their fortunes elsewhere, according to the Treasury Department.
There’s no such thing as an exit survey for expats, but we can guess why many of them decided to leave: beginning in July, tougher U.S. tax laws will make it much harder for expatriates to shelter income and investment gains from Uncle Sam.
Still, not all expats are moving abroad purely for tax purposes. Like Turner, some simply move for love, others for work or to be closer to family.
HSBC recently released the results of its Expat Explorer survey, in which it asked 7,000 expats from around the world to rank some 37 popular expat destinations on a variety of quality of life and financial factors. They found that 40% of those surveyed moved abroad for better job opportunities, and nearly half plan on becoming permanent citizens.
In order to determine which countries offer expats the best experience overall, HSBC used criteria that fell under three umbrellas: social integration, ease of setting up finances/housing, and quality of life. You can slice the data in different ways, selecting which categories and sub-categories matter the most to you (here's the full ranking). For instance, you can take economic factors out of the rankings and focus just on quality of life and raising children criteria.
We highlighted five countries that ranked highest for the overall expat experience below.
Income Satisfaction: Ranked 2nd out of 37 countries
Disposable Income Satisfaction: Ranked 2nd out of 37 countries
Australia has long been a favorite destination for retirees, so it comes as no surprise that one out of four expats surveyed by HSBC said they moved there after leaving the workforce.
And more than 60% said their quality of life had improved as a result.
“Expats find the weather, food, and culture easy to adapt to and tend to associate the nation with a pleasant climate, nice scenery, and friendly locals,” according to the HSBC report.
However, it’s not all sunshine and scuba diving. Health care is expensive, which is something to think about as retirees will undoubtedly need more medical attention with age. But Australia’s relatively strong economy is encouraging for older expats, the vast majority of whom (86%) said they chose to save for retirement via local financial institutions rather than continuing to fund retirement accounts in their home country.
#4 Cayman Islands
Income Satisfaction: Ranked 2nd out of 37 countries
Disposable Income Satisfaction: Ranked 2nd out of 37 countries (tied with Australia)
It’s no secret that the Cayman Islands have become one of the world’s most beloved tax havens, with its 0% income tax making it an attractive destination for high-net-worth individuals to shelter their riches from Uncle Sam.
That will change soon enough, as new tax regulations set to take effect in July 2014 would require foreign financial institutions to alert the IRS about offshore accounts with $50,000 in holdings.
But there’s a lot more going for the Caymans than its cushy tax code. Expats rated the islands first in both the ease of fitting into the local culture and social life. The beach weather probably doesn’t hurt either.
Income Satisfaction: Ranked 3rd out of 37 countries
Disposable Income Satisfaction: Ranked 11th out of 37 countries
The majority of expats who moved to China cited better job prospects and higher salaries, according to HSBC. More than 40% said they earn more than they did in their home country, which would explain why the country ranked fairly high for disposable income.
It’s also become a popular destination because of its proximity to the Pacific and popular Asian neighbors like Singapore, Hong Kong, and Taiwan. Nearly half of respondents said they have traveled more since moving to China and the country ranked third for the ability of foreigners to make friends.
Income Satisfaction: Ranked 19th out of 37 countries
Disposable Income Satisfaction: Ranked 4th out of 37 countries
Bahrain is attractive for career-minded expats looking for a strong work-life balance, solid health infrastructure and plentiful housing. The country ranked in the top five in all three categories.
But its tough social scene may pose a challenge for some expats. The country is one of the hardest places to learn the local language (Arabic) and make friends, ranking 29th out of 37 countries in both categories.
Income Satisfaction: Ranked 15th out of 37 countries
Disposable Income Satisfaction: Ranked 1st out of 37 countries
Thailand would make anyone feel at home. The Southeast Asian country offers the dual benefit of relatively high income levels and a lower cost of living, ranking first among all countries in expats’ level of disposable income.
According to HSBC’s survey, the country really sells people on quality of life factors like health, work environment, social life, and culture -- Thailand ranked first on all these measures.
Just make sure you keep your Rosetta Stone CD handy. Expats found Thai to be one of the hardest languages to master, ranking the country 33rd.
Which countries did expats care for least?
Despite a relatively strong infrastructure and high-paying job opportunities for foreigners, Saudi Arabia fell to the bottom of the pack in this year's survey. The Middle Eastern country is popular with young, career-minded expats but "life is more challenging for Saudi-based expats," the report says. "This could be attributed to the hot climate with only 7% of expats associating Saudi Arabia with pleasant scenery compared to 42% globally. In addition, more than half of expats have a less active social life compared to only 35% globally."
The bottom five countries were rounded out by Egypt, Omam, Kuwait and the Netherlands. The U.S. also fell pretty low on the list, ranking No. 23 despite a bevy of positive reviews from expats.
"Expats in the USA appear to have a particularly strong affinity for their new home and are among the least likely of those looking to relocate, with many noting an improvement in quality of life, healthcare and education," the study says.
Did you leave the U.S. for greener pastures? E-mail me at email@example.com.