More gloss appears to be coming off the limited company structure, as the only nation in Europe to make a new Top 10 of overseas contracting hotspots is off-limits to UK PSCs.
In fact, Switzerland is the sole European entry (2nd) in a fresh rundown of the most lucrative destinations for UK contractors, but the under-strain structure is vetoed for Swiss contracts.
“In Switzerland, the contractor must be employed by a SECO-licensed company, not their own ‘Ltd,’” says Access Financial which compiled the Top 10. “There’s no alternative.”
Such a requirement puts the Zurich-led country at odds with Belgium, the Netherlands, Luxembourg and France, among others, as all four permit both PSC and local payroll set up.
‘Europe fares badly’
But none of this quartet make the top 10 most lucrative overseas nations of 2019 for Britons (Paris, France is nearest, positioned11th). It reflects a generally poor showing for Europe.
“Aside from Switzerland, European countries fare badly”, says Access Financial managing director Kevin Austin, referring to where in the world is lucrative for UK contractors.
“The growth of East and South East Asian economies has seen European countries pushed into second place on pay. Together with high taxes and cost of living, they make poor choices for contractors primarily looking to save money.”
If saving money while contracting is the aim, then Mumbai, India, is hard to beat, with annual cost of living being the cheapest out of the 16 nations assessed — less than €10,000 (£8,630).
But old Bombay this year loses its ‘most lucrative overseas contracting city’ crown and is pushed into fourth place by San Francisco, where take-home pay for expats is now unrivalled.
According to the analysis, (annual) disposable income for such invariably Silicon Valley workers is €99,920; once taxes, social security and living costs come off salary (€299,000).
But Mr Austin issued an alert about property prices, saying the proportion of their salary which the US tech hub’s workers devote to paying their housing costs is “growing.”
Second only to San Francisco on pay but sixth in the take-home stakes is New York, which is similar as it too suffers from high living costs due to housing, yet also because of education.
But just as they do for European cities, lifestyle and culture come into bat for the most populous city in the US — only one of two nations worldwide where a tax on foreign income is based on citizenship not residence.
“Property taxes are among the highest in the US and much higher than equivalent taxes in most European countries,” Mr Austin adds. “[Whereas] the Asian destinations of India, China, Singapore, Malaysia and Hong Kong provide that attractive combination of low taxes and cost of living.”
He added that, where more than one in-country work solution is available (so not Switzerland for example), the best way for UK contractors to structure themselves would still come down to their individual circumstances. The Top 10 is summarised in the following table:
|Rank||Country (City)||Annual Disposable Income (EUR)|
|1.||California/USA (San Francisco)||99,920|
|6.||New York/USA (NYC)||70,168|
|8.||Malaysia (Kuala Lumpur)||61,084|
Courtesy – ContractorUK