Asia-Pacific Updates on expatriates in: China Japan Australia Korea ... international assignments....

Volume 1, Issue 15 October 2011 www.reloc8asia.com

Welcome Dear Friends,

In this edition of our Reloc8 newsletter we are examining a broader subject, simply, any major development that has occurred in the last 12 months in each of our respective regions that has affected the expatriate

community.

We have left it to each of our members to come up with their own issue, be it a natural calamity and its impact, a political upheaval, new immigration regulations, a financial boom or bust, etc. And again we find that events in one country have no impact, or are vastly different from those in another. The Asia Pacific region is huge, diverse and complex. So in relocating here, please make it easier for yourself by remembering we understand

what is happening, and how to deal with it.

As an added extra, we also thought it might be fun to explore a single common misconception we often face in each of our

countries.

So we hope you enjoy this issue.

Best regards, Kenneth Arbour President, Reloc8 Asia Pacific Group

Asia-Pacific Updates Reloc8 — A Regional Relocation Resource

Welcome 1 Major changes this year that had a significant impact on expatriates in:

Australia China Japan Korea Malaysia New Zealand Singapore Taiwan Thailand The Philippines

Popular misconceptions about our countries:

Australia China Japan Korea Malaysia New Zealand Singapore Taiwan Thailand The Philippines

In this Edition

2 2 3 3 4 4 5 5 6 6

7 7 8 8 8 9 9 9 10 10

Australia The Economy and Living Cost for Expats

While Australia has benefited substantially from the growth of the Chinese economy and China’s demand for its coal and iron ore, the benefits of the

“resources boom” have not been evenly spread through the economy.

One of the most significant impacts has been the appreciation of the Australian dollar against some major currencies (approximately 50% against each of the US

Dollar, Euro and British Pound in two years).

For expatriates and their employers, accommodation and other costs are much higher when expressed in “home country” currencies. We have encountered examples of temporary housing allowances, long-term housing budgets, and other allowances set in US dollars – potentially imposing a 50% “haircut” on their employees! This has caused a rocky start to some

international assignments.

For the resource-rich states of Western Australia and Queensland the impacts of the “boom” have been felt in higher accommodation costs – especially in the remote areas where much of the activity is occurring. The indirect impacts on Perth (the capital of Western Australia) have been to increase many other living costs – for example cafes and restaurants have to compete with the inflated wage

levels offered in the resources towns of the north.

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China Expatriates now have to participate in China’s Social Security System (SSS)

China has decided to follow the practice of many middle and high income countries and make it mandatory for foreigners working in China to join the national SSS. This obligation commences on 15 October 2011 and employers

have 30 days in which to sign up their foreign employees as participants.

Employers and foreign employees will both contribute to the SSS. For a foreigner in Beijing for example, with a gross monthly income above the Beijing cap of RMB 12,603 (US$1,978), monthly contributions are:

For employers, there will be significant additional costs to doing business in China. For employees, while there are some benefits, outstanding questions remain regarding access to benefits: a) only 15% of the employer’s contribution to the pension fund is credited to the employee’s personal account, with the bal-ance deposited into a common fund (how much of this is retrievable isn’t clear) b) foreigners can’t remain in China if they are unemployed but will pay for and not enjoy unemployment insurance c) the medical insurance does not currently cover treatment at the international hospitals and clinics. One city, Dalian, has removed its cap. If other cities do the same, the percentages will apply to each foreigner’s

total gross salary. Fortunately for the employee, her/his contributions are tax free.

Insurance Fund Income Ref Cap Paid by Employer Paid by Employee

RMB % Amount

US$ % Amount

US$

Pension 12,603 20% 396 8% 158

Unemployment 12,603 1% 20 0.2% 4

Medical 12,603 10% 198 2%

+3RMB 40

Work Injury 12,603 0.5% 10 0% 0

Maternity 12,603 0.8% 16 0% 0

Total 12,603 32.3% 639 10.2%+3R 202

Volume 1, Issue 15, October 2011 www.reloc8asia.com

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Japan Disasters and the Economy

Certainly the earthquake, tsunami, and the nuclear reactor breakdown have been the major story impacting expatriate relocation to Japan this year. Though the devastation and loss of life was indeed tragic, it is important to note that Tokyo, where most expats in Japan tend to live, was left relatively unscathed, at least physically, by the event. In the weeks and even months that followed the major quake of March 11th, there was, in the immortal words of Jerry Lee Lewis, a whole lot of shaking going on. And it took a while to subside. And this, plus the scope of the catastrophe to the north, has left a more somber mood on the capital, and the country as a whole. The economic impact of the loss of industry in the northeast has been serious. But the Japanese have cut back consumption, made do with less, and generally managed to cope, such that the real impact on day-to-day life, outside of the area leveled by the tsunami, has been minimized. However, many aspects of regular life, such as taking a bath, are still a trial up North. There has also been the continued festering of the nuclear plant in Fukushima, which looks like it may take years to resolve. However, the most serious concern, of a radiation cloud heading toward Tokyo, seems to have largely dissipated. So what does all this mean in terms of its effect on the expat community? There was a significant exodus of foreigners after the quake, but many of them were quick to return. The international schools have lost some students, but the loss hasn't been that great. Similarly real estate prices for expat housing are down, but they were already down 30% or more from the economic collapse of 2008, so it is difficult to say whether the earthquake has made the situation that much worse- though it certainly hasn't helped. In the end, a continued recovery is expected, though it may take another year or two.

Korea

Climate Changes and Housing Maintenance

From the month of May to the end of August, it rained heavily, every day. Many expatriate families living in detached houses experienced leaking. What was worse was that the repair work couldn’t start until it stopped raining. But, it didn’t stop. Some families suffered for almost 4 months, before the repair work could start! Not only was water leaking but mould was forming inside the houses and no practical cure could be done until the beginning of September. Then, when September came and the rain finally stopped, there was a long queue of people waiting for repairs and the workers were too busy to finish all the work at once. This took us a lot of time: to explain to tenants, to argue with landlords and to arrange for workers. We had never realized how precious is sunshine

Typically, in Korea there is a monsoon season, but this generally lasts about a

month in summer and during this time, we would expect rain, but not such a big

volume as this year. If what we are seeing is real climate change with long-term

effects on Korea’s rainfall, our houses will need more protection against rain

than ever and construction companies will have to find some more effective

methods to reinforce the roofs against very heavy rain which may be as much

as 100mm per hour.


Malaysia Political

The oppressive Internal Security Act 1960 (ISA) was first implemented by the British in Malaya in 1948 to combat armed insurgency by the Malayan Communist Party. In a 15 September 2011 announcement by the Prime Minister of Malaysia, Najib Razak, this oppressive law is to be repealed. After bracing mounting pressure from the NGOs and opposition parties for decades for its abolishment, this announcement is seen as a welcome step towards a more liberalised nation in line with the times where a dissenting voice is allowed and even tolerated. Detention without trial is largely viewed by Malaysians today as both unpopular and an infringement of their rights of expression as enshrined in the Federal Constitution. Malaysians today are not only better educated, earning higher incomes than their forefathers but are aware of their rights as citizens to express and to assemble peacefully to support and champion a just cause. This new consciousness was seen in the recent Bersih 2.0 demonstrations in July 2011 which took place peacefully without any untoward incidents. The magnitude of support garnered by the organiser, an NGO, sent a strong ripple to the government that such antiquated laws are hurting the Malaysia unification initiative launched by the Prime Minister when he took over the seat of the Government in 2009.

Repealing and liberalization of such oppressive laws are not only natural,

needed and timely, but it will greatly help to re-position the country as a FDI

(Foreign Direct Investment) and tourist-friendly country boosted by Malaysia’s

rich diversity in her people and culture.

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New Zealand Rental Increases

For the past year, there has been a serious shortage of good quality rental accommodation throughout NZ. The Rugby World Cup has also had a huge impact and landlords are charging very high pricing. Also, due to the Christchurch earthquake, people have been moving out of Christchurch and relocating to other areas in NZ. Often expats cannot find a suitable property, and rentals are increasing, especially as the New Zealand dollar is becoming stronger. Expatriates, once they find a suitable property, need to make decisions promptly. Careful attention should be paid to the frequency of rent reviews by Landlords, due to escalating rent charges.


Singapore Immigration Regulations

Singapore is tightening requirements for foreigners entering the country on Employment Passes (EP) yet again. Effective from January 2012, key changes include tightening the educational qualifications requirements and raising the qualifying salary for new EP applications. The new criteria will also affect existing EP holders. The EPs that expire before 1 January 2012 will receive a one-time renewal of up to two years, based on the criteria before July this year. The move aims to ensure that employers who need to augment their workforce hire foreigners with the right calibre and expertise to complement an increasingly qualified local workforce. While foreign talent is here to stay, making up one-third of the country’s total workforce, the overall EP Framework changes endorse the government’s emphasis that Singaporeans should remain at the core of a diverse and globally competitive workforce. Changes to Employment Pass (EP) Framework

EP Type Prior to 1 Jul, 2011

From 1 Jul, 2011 From 1 Jan, 2012

Q1 Qualifying salary ≥ $2,500

Qualifying salary ≥ $2,800

Qualifying salary ≥ $3,000 (Tightened edu-cational qualifications re-quirements)

P2 Qualifying salary≥ $3,500



P1 Qualifying salary≥ $7,000

Qualifying salary≥ $8,000


S Pass Qualifying salary≥ $1,800



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Taiwan Economic

The biggest change this year is that the Economic Cooperation Framework Agreement with Mainland China has now taken effect. Taiwan is already a world leader in terms of contract manufacturing of chips, IC sealing and packaging, and the manufacture of CDs, mask ROM chips, electrolytic copper foils, and other products. By building on this foundation, Taiwan signed the Cross-Straits Economic Cooperation Framework Agreement (ECFA) with Mainland China on June 29, 2010, deepening and accelerating Taiwan’s reach into Asia-Pacific integration. This creates unprecedented opportunities for Taiwan’s economy. It will mean in an increase in investment opportunities for Taiwan in China and for China in Taiwan. In conjunction with the ECFA signing, direct flights to Japan’s Haneda Airport were also launched, in addition to the existing cross-strait flights to the several major cities of China. These developments are enhancing Taiwan’s role as a hub for business operations in the Asia-Pacific region. With many public construction projects expected, we foresee a boost to the economy, creation of more jobs, and significant business growth. Along with these developments, we also foresee an increase of global mobility activities in Taiwan.


Thailand Political

The months’ long political stand-off between non-parliamentary groups of red shirts (supporting the former Prime Minister Thaksin Shiawatra who wanted new elections) and yellow shirts (supporting the old conservative establishment and wanted the status quo), had a significant impact on expatriates in Thailand. The yellow shirts had previously occupied government buildings and the airports, and fostered a military coup in 2006. Now the red shirts were occupying the city center demanding immediate political changes. The situation became very tense in March-May 2010, and culminated with the military clearing the occupied area in the inner city. Close to 100 people were killed and thousands were wounded. More than 30 high rise buildings were set on fire. The city skyline was an inferno of smoke and fire. The expatriates were scared. Everybody was scared! Those living in the occupied areas had to leave, and for weeks businesses were shut down. Our office was just outside the occupied area and was occasionally closed. The police and red shirts were from time to time fighting in the street in front of our office. We were living in fear for the safety of our staff and clients. However, it is interesting to see how quickly everything returns to normal after the military intervention. It is difficult to imagine today that a few months ago the occupied area was a no-go zone. All companies should have standard operating procedures for this kind of event. Complementary information can be obtained from the embassies, and expats should familiarize themselves with their travel advice.

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The Philippines Immigration Regulations

As much as it has been a ruling since 2005 for foreign nationals to produce authenticated marriage and birth certificates as part of their Philippine visa application requirements, with the installation of a Bureau of Immigrations (BOI) Commissioner in June 2011, the BOI has been strictly enforcing this ruling whereas his predecessors had accepted submission of mere photocopies of aforementioned documents. The process for obtaining authenticated marriage and birth certificates is a rather uncomplicated process if done in the assignee's home country. But if this is carried out in the Philippines, it first requires that the assignee's respective embassy authenticate said document and then it must be authenticated by the Department of Foreign Affairs. HR should encourage their assignees to have their marriage and birth certificates authenticated before they leave their home country to avoid delays in release of their Philippine visas and consequently, their furniture shipments, if any. The Philippine Economic Zone Authority (PEZA) has also begun requiring companies to submit certifications of the number of foreigners and Filipinos currently employed with each visa renewal. Considering that PEZA only grants a one year visa despite the assignee's employment contract stating more, this is another yard in the red tape of the Philippine immigration process. These documents which are now being strictly required only serve to further delay assignees from receiving their respective visas and may foreshadow a tightening of employment visas in the future.


Popular Misconceptions about our Countries

Australia

Whilst on a property search in downtown Sydney, a transferee commented that he was surprised he hadn’t seen any kangaroos yet. We love and are proud of our native furry friends, but they are most definitely wild animals! You will see them out in the wild or in animal parks, but certainly not while waiting for the lights to change at a busy intersection… China

Ancient China, picturesque countryside and submissive women might be

images you carry of China. While you can still enjoy some ancient

buildings if you search hard, futuristic skyscrapers are popping up every

day and the picturesque countryside is being replaced by fast growing ur-

ban centers. 120 Chinese cities have populations over one million and

many dozens have 3 or 4 million people. As for submissive women, per-

haps ask the men, but you will find many assertive and highly competitive

women in high positions today. So, don’t underestimate Chinese women!


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Japan My clients, who hear that Japanese live in tiny homes like rabbit hutches, are often surprised by the large housing, as they are often shown a good selection of, say, 4 bedroom 2,000 sq. ft. homes. In major centers like Tokyo and Kobe/Osaka there are homes like this, but generally they are built specifically for leasing to an expatriate family at a substantially higher rent than a standard Japanese family would be willing or able to pay. Korea

Many people think that Koreans, being Asian, would

prefer to drink tea, but when they see the number of

coffee shops in Seoul (you can see a coffee shop

similar to Starbucks almost every 300 meters in many

streets in Seoul and they are certainly more common

than tea shops), they ask us “Are you only drinking

coffee?” with surprise. In fact, many Koreans are

enjoying coffee regardless of the expense.

Malaysia

Believe it or not, Malaysia has one of the world’s best and cheapest international budget airlines. Low Cost Carriers (LCCs) or budget airlines were never a standard in air travel in Malaysia and the Asian region until 2001 when Air Asia was established. It now has a route network that spans more than 20 countries. AirAsia continues to pave the way for low-cost aviation through their innovative solutions, efficient processes and a passionate approach to business. Together with their associate compa-nies, AirAsia X, Thai AirAsia and Indonesia AirAsia, AirAsia is set to take low-cost flying to an all new high with their belief and tagline, "Now Everyone Can Fly".

Check out how you too can fly to Asia

(and beyond) @ www.AirAsia.com.


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http://www.AirAsia.com

New Zealand It is often said that "there are more people here than sheep" and that many New Zealanders run around in "grass skirts", but in fact: We are one of the world leaders in IT Technology and banking services. Singapore

A common perception amongst expats is that Singapore is expensive.

Everything is expensive. But, it doesn’t have to be. In reality, Singapore

offers variety of options: you can choose to eat very cheaply or you can

pay through your nose for similar food depending on where you go to dine.

For example, the Hainanese Chicken Rice, originally from Hainan, China

and some of the best chicken rice in Singapore today is made by

Hainanese in Singapore. And, it doesn't have to be expensive: While it

costs as much as over S$20.00 in hotel restaurants, a plate of chicken rice

is sold for as little as S$3.00 in hawker

centers.

Taiwan

Many times you may have hear it said: “So you are moving to Taiwan?! That’s awesome, I love Thai food.” Taiwan and Thailand do sound similar, but often the confusion comes from the fact that most people don’t even know where and what Taiwan is. Taiwan is inhabited by Chinese people, more specifically Taiwanese (but not Thai). The official language is Mandarin Chinese. It’s located in East Asia off the eastern coast of China, north of the Philippines, and south of Japan. The capital of Taiwan is Taipei.


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Thailand The Thai smile may not always mean happiness. It is in the Thai culture not to embarrass others, and even the most dramatic event is delivered with a smile. “My child is sick”.. smile. “I made a bad mistake” ..smile. So, don’t get carried away by the Thai smile!

The Philippines While our national Language is Tagalog, our English proficiency is sometimes better than that of our assignees. The Philippines is not an island, but an archipelago, composed of 7,107 islands (depending on the rise and ebb of the tide). There are no beaches in Manila.

Food tastes are very country-specific: many foreigners are now aware of

the Filipino delicacy called "balut" which is a roasted day-old chick duck

still in its egg. And if you think that that's already disgusting... ahem...

exotic, wait till you taste our stewed monitor lizard (tastes just like chicken!)

and vinegar-soy sauce crunchy rice field crickets! But, if you ask us to eat

a rabbit we will refuse since rabbits are pets. Dog on the other hand is a

regional delicacy that goes well with local alcohol… but don’t worry, not

everyone eats dog.


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A regional relocation resource for the entire Asia region. Reloc8 Asia Pacific Group includes Australia, China, Japan, Korea, Malaysia, New Zealand, The Philippines, Singapore, Taiwan and Thailand with associates in India, Hong Kong and Indonesia. Reloc8 has Asia covered, providing a coordinated relocation service solution, for individual or corporate clients.

Reloc8 provides a single contact point to access relocation services throughout the region, ensuring consistent service quality and scope. A standard approach or a case by case solution – Reloc8 has the flexibility to tailor services to meet the needs of the individual and the budget of the organization.

Owner-managed A specialist in destination services Experts in their market Supported by hardworking and experienced team members

The involvement of the owner brings a level of personal commitment to the success of each destination program. It is this level of responsibility and dedication that becomes most valuable when solving problems and achieving results.

In each country, the service providers are specialists in delivering destination programs. Each company is supported by staff that are highly trained and experienced both in the industry and in the destination country. Local conditions vary from country to country and experienced relocation staff understand what is needed to accomplish a successful relocation. This means getting results so that transferees have maximum focus on the new job, in minimum time.

Reloc8

Principal

Contact:

Australia - Nick

Woodhams :

nickw@relocationcentre.

com.au

China - Shelley Warner : [email protected] Japan - Kenneth Arbour :

kenarbour@ tokyoorientations.com Korea - Yonjoo Oh :

[email protected] Malaysia - Triona Chel-liah :TrionaChelliah@path

finder-relocation.com New Zealand - June Ran-son :

[email protected] Philippines - Dornet Ven-turanza : DGV@

annexusinternational.com Singapore - Lee Wong : Lee.Wong@

asianwelcome.com Taiwan - Mich Chu : mich@ eastgate-relocation.com

Thailand – Leo Alex-andersen : pors@pacificorientation.

com


mailto:[email protected]

















Asia-Pacific Updates on expatriates in: China Japan Australia Korea ... international assignments....

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Transcript of Asia-Pacific Updates on expatriates in: China Japan Australia Korea ... international assignments....