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The Dubai differential
3 July 2007
Costs may be rising, but you can still make more money working and living in Dubai than in London.
Life in Dubai is 40% cheaper than London and 12% cheaper than New York. But salaries for senior bankers are often on a par and bonuses are rising to match.
Even in those sectors where pay is higher in London, it may only be just enough to offset the cost differential. For example, fund managers in London earn around US$330k according to Michael Ketley, a headhunter with London-based MRK Consulting. Ketley says those same fund managers can expect US$200k to US$250k working in Dubai.
Factor in tax breaks and Dubai suddenly looks considerably more appealing. Most financial services employees in the Emirate pay no income tax – the entire US$200k salary goes into the individual's pocket. By comparison, a fund manager earning US$330k in London will end up with just US$200k after tax – and will have to stump up for higher living costs.
The downside is that while salaries may leave Dubai bankers better off, bonuses are less likely to measure up. Russell Adam, a consultant with London's Akamai Financial Markets, cautions that investment banking bonuses in Dubai are usually low compared to the windfalls paid out in more established financial centres.
However, Dubai may be catching up – the recent salary survey by recruitment firm EM Group suggests vice presidents (VPs) in corporate finance in London and Dubai both received maximum bonus payouts of 350% of salary last year. When tax and living costs are taken into account Dubai-based VPs end up with 70% more to spend. And if that's not a reason to work here, what is?
There are other factors should be taken in consideration, First, how many IB AM firms in Dubai and compare them to NY or London? Second London and NY provide opportunities of developing skills and education than the whole GCC.
I believe that many expt. appealing to the GCC for many reasons, e.g. tough competition, lack of jobs, short term plans, avoiding taxes to meet short term goals in the West. I don't think the day will come when we see heavy weight fund managers move to the Gulf. Can you imagine a fund manager working under the sponsorship scheme? It is funny. Only those work for the Big IB and they have to fill some managerial gaps. After 9/11 money moved back to GCC however, nowadays studies are telling us that money has moved back to the West with more than before 9/11
Anonymous 03 Jul 2007
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