Antal Russia: Russia-based expats having financial problems

By Andrei Skvarsky.

Western expats have been leaving Russia in droves since the Ukrainian crisis erupted and economic woes began to beset the country, and a survey by a headhunter suggests that those who stay are on the whole less than affluent.

Only 48% of expats interviewed by the Antal Russia recruitment company this month had had salary rises – by an average of 12.5% – in the last 12 months, while the salaries of 49% had remained unchanged and those of 3% had been reduced, the Moscow-based headhunter said in a statement.

Antal said 88% of those questioned in the poll, conducted on August 13-19, were working in international companies, that more than half of them represented one of four industries – business services, retail, production and fast-moving consumer goods, – and that 54% were general managers.

The employers of just 34% of those having their salaries set in foreign currency used central bank rates for conversion into rubles, while for 23% there were fixed rates of between 30 and 60 rubles to the dollar and between 40 and 60 rubles, the statement said. This month the central bank rates have been around 65 rubles per dollar and 75 rubles per euro.

In fact, the currency aspect of expats’ salaries is an obstacle to accurate assessments of their average financial status given the ruble’s 45% drop versus the dollar and 35% fall against the euro over the past year.

Antal Russia chief executive Michael Germershausen points out that many of the expats who are paid ruble-only salaries still have expenses to pay in foreign currency in their home countries. These include spending on families who have stayed behind, pension deductions, loan interest, and taxes.

“For those income has dropped by more than 50% over the last 12 months. Even if the 13% income tax paid in Russia still compares very favourably, for many foreigners that receive ruble salaries only, the point from where it does not make sense to stay from a financial point has been reached or is close,” the Antal statement quoted Germershausen as saying.

Nevertheless, Germershausen “was surprised to see the level of localization of expats”. “More than 30% of respondents have already ruble-based contracts and very often already receive only one sum in rubles from which they pay for all other ‘extras’, which makes their income comparable to local staff’s”, he said.

The Wall Street Journal cited the Russian Federal Migration Service as saying the number of foreigners in Russia from the United States and Western Europe’s biggest countries plunged by 34% between January 2014 and January 2015.

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