In its broadest sense, an expatriate is any person living in a different country from where he or she is a citizen. In common usage, the term is often used in the context of professionals sent abroad by their companies, as opposed to locally hired staff (who can also be foreigners). The differentiation found in common usage usually comes down to socio-economic factors, so skilled professionals working in another country are described as expatriates, whereas a manual labourer who has moved to another country to earn more money might be labelled an 'immigrant'. There is no set definition and usage does vary depending on context and individual preferences and prejudices.
In the 19th century, Americans, numbering perhaps in the thousands, were drawn to Europe—especially to Munich and Paris—to study the art of painting. Henry James, for instance, was a famous expatriate American writer from the 1870s, who adopted England as his home.
The term 'expatriate' in some countries also has a legal context used for tax purposes. An expatriate living in a country can receive a favorable tax treatment. In this context a person can only be an expatriate if they move to a country other than their own to work with the intent of returning to their home country within a period of no more than 5 fiscal years. This number of years can vary per tax jurisdiction, but 5 years is the most commonly used maximum period.
Trends in expatriation
During the later half of the 20th century expatriation was dominated by professionals sent by their employers to foreign subsidiaries or headquarters. Starting at the end of the 20th century globalization created a global market for skilled professionals and leveled the income of skilled professionals relative to cost of living while the income differences of the unskilled remained large. Cost of intercontinental travel had become sufficiently low, such that employers not finding the skill in a local market could effectively turn to recruitment on a global scale.
This has created a different type of expatriate where commuter and short-term assignments are becoming more common and often used by organizations to supplement traditional expatriation. Private motivation is becoming more relevant than company assignment. Families might often stay behind when work opportunities amount to months instead of years. The cultural impact of this trend is more significant. Traditional corporate expatriates did not integrate and commonly only associated with the elite of the country they were living in. Modern expatriates form a global middle class with shared work experiences in multi-national corporation and working and living the global financial and economical centers. Integration is incomplete but strong cultural influences are transmitted. Middle class expatriates contain many re-migrants from emigration movements one or two generations earlier.
In Dubai the population is predominantly expatriates, from countries such as India, Pakistan, Bangladesh and the Philippines, with only 20% of the population made up of citizens.
The continuing shift in expatriates has often been difficult to measure. According to UN statistics, more than 200 million people will be living outside of their home country in 2010. However, this number also includes economic migrants.
In terms of outbound expatriation, the UK has currently the highest number of expatriates among developed countries with more than three million British living abroad, followed by Germany and Italy. On an annual basis, emigration from the UK has stood at about 400,000 per year for the past 10 years. In terms of expatriates influx, the most popular expatriate destinations are currently Spain, followed by Germany and the UK.
The Expat Directory is currently collating information on expatriate movements to provide a statistical overview of expatriate origin and destination countries. Current statistics show that the majority of expatriates originate from the United States. The questionnaire aims to provide further information or key destinations and the length of time that expatriates spend overseas. The survey will remain open ended with monthly snapshots collated from March 2010.
According to linkexpats, Dubai claims the highest number of expatriates, followed by Abu Dhabi, and Muscat, Oman.
The Global Economic downturn of 2008/9 has seen many United Kingdom Expatriates returning back to the UK. This trend has been predominantly attributed to 'pensioner expatriates' with the poor exchange rate making life less affordable. The process of relocating back to one's home country is known as repatriation and brings with it a specific set of challenges.
Business handling of expatriate employees
In dealing with expatriates, an international company should recognise their value and have experienced staff to deal with them and follow written policies on expatriates' benefits. Salary of internationally assigned personnel customarily consists of standard salary and monetary benefits such as cost of living and/or hardship allowances supported by non-monetary incentives i.e. housing and education. Some companies will completely cover the cost of the education, even at relatively expensive international schools, while other, usually smaller companies, encourage families to find local schooling options.
International corporations often have a company-wide policy and coaching system that includes spouses at an earlier stage in the decision-making process, giving spouses an official voice. Not many companies provide any compensation for loss of income of expatriate spouses, although they often do provide other benefits and assistance. The level of support differs, ranging from offering a job-hunting course for spouses at the new location to full service partner support structures, run by volunteering spouses supported by the organization. An example of an expatriate-led project can be found in the Gracia Arts Project of Barcelona.
There are several advantages and disadvantages of using expatriate employees to staff international company subsidiaries. Advantages include, permitting closer control and coordination of international subsidiaries and providing a broader global perspective. Disadvantages include high transfer costs, the possibility of encountering local government restrictions, and possibly creating a problem of adaptability to foreign environments.
Subtleties of usage
In some countries, such as Switzerland, the term "expat" is not used for all foreigners living and working there, but only to those on "expat" contracts. Typical Swiss expats will be living in housing provided by the employer, with most other expenses such as children's (English) education also paid by the employer. In theory, this is because they are still maintaining a home in their original country. This is in strong contrast with those on "local" contracts who are treated and paid like other locals. The "expats" have a reputation of being flush with money, and raising the prices for others who are not subsidised in this way. Expat contracts are usually time limited, so the expats either move on to another assignment, or are given a local contract without expat subsidies.