Think city, think local

Global megatrends are reshaping where people live and work and where businesses want to be based. Nowhere feels the impact of these trends more than major cities. So, when it comes to property, should we be thinking city not country? And how do we know where’s hot and where’s not?

Everyone has a view on the global property market. Every year, specialists such as Knight Frank and DTZ publish their rankings and predictions. But the fact that these analyses often contradict each other points to a market that’s far from simple. Where experts do agree is that significant social, economic, political, environmental and technological changes filter down into political and economic decision-making. This has an impact on which parts of the world become attractive and investable. Right now, these ‘megatrends’ are mass urbanisation, an ageing population, a rising proportion of middle class and a shift of power from the West to Asia and Africa.

For anyone considering property investment – whether commercial or residential – there are two key factors. Firstly, cities feel the effects of megatrends more dramatically than countries. This suggests that potential investors and developers should be looking in detail at particular cities rather than basing strategies around a country.

The populations of several European countries, including Germany, Greece, Spain and Portugal, are forecast to decline over the coming decades. Most of Europe’s largest cities, however, are predicted to grow. The number of ‘megacities’ (10m+ population) is expected to rise from 28 in 2014 to an estimated 41 by 2030 – 25 of these in Asia.

Research by Savills Investment Management found that property investors are increasingly focusing on cities as more people are drawn to living and working in central areas.


Local knowledge

And the second factor for investors to consider? Given that experts can’t agree, the hotspots highlighted by megatrend data must be balanced by information at the microeconomic level. Put simply, local knowledge becomes more valuable when deciding where and when to invest.

This is evident when an investor tries to make sense of news that Spain is both “one of the leading markets in 2016” and is also heading for price stagnation in 2017 and 2018; or that the United Arab Emirates has both a “softening” residential market and “robust activity”.

On the ground the picture becomes clearer. Take the UAE, for example. David Burns MBE, director of UHY Saxena in Dubai, says the region has always been a tale of two cities – Dubai and Abu Dhabi. In both, the price of oil, speculation and regional instability are the main factors affecting the property market.

“People are investing speculatively here for short-term gain. Prices are relatively low now but are expected to rise with the 2020 World Expo. The general yield in the UAE is 7%, compared to a global average of 2-3%. Reasonable quality, real estate regulations in Dubai and the perception that the UAE is a safe haven in the region attract investment.”

David believes that in his region the thinking should be about individual cities. In Saudi Arabia, for example, there are several major cities with very different dynamics – in the holy cities of Mecca and Medina, foreigners are not allowed to buy property; land-locked capital Riyadh is the natural base for many corporates, and Jeddah is viewed as a relatively laid-back city with easy logistics thanks to its seaports.

In Dublin, Ireland, Alan Farrelly, managing director of UHY Farrelly Dawe White, sees both opportunity and challenge.

“This is a city where large employers like Google, Facebook and LinkedIn are creating jobs. This is attracting young graduates, who are now seeking accommodation in the city. It’s creating real demand,” says Alan. “However, there are still issues around planning and council levies in the city that are delaying projects getting started.”


Hopes and dreams

Sunil Hansraj, joint managing partner of UHY’s member firm, Chandabhoy & Jassoobhoy in Mumbai, agrees that it is cities that count. Mumbai is going through a lean phase with supply exceeding demand – something that seems to contradict many of the property market reports that put Mumbai at the top of world rankings.

“In India, each city performs differently at different times, because development regulations and plans differ – each city has its own municipal corporation, which implements rules and regulations. This has a huge impact on the sector. There are several instances where the real estate market of a city has fared better than the country as a whole.”

Reports looking at global trends can’t take account of the motivations and goals of individual investors. A business needing a base as it expands into a new market will be looking for places that have the talent it needs. In this case, affordable housing, social amenities and logistics may be more important than a fast return on investment – though, in fact, a city’s development often leads to a property boom.

Knight Frank states in its Global Cities 2016 report that in emerging world cities megatrends are producing dramatic impacts that lead to an explosion in new consumer markets. “In developed world cities, where real estate risk is more palatable, the emphasis should be on cities which have the ability to attract talent, tourism and international tenants.”

For a business looking for pure investment opportunities, the consideration is more one of prospects for rental income or capital growth over the term that suits the company’s needs.

Mumbai is an example of a complex market where detail and timing are critical. The city may not be attractive to developers right now, but buyers are benefiting from easy access to long-term loans at attractive interest rates.

“Traditionally, the greatest asset for a middle-class Indian family is their own home. The need and requirement for housing will always be there – but the price needs to be right,” says Sunil Hansraj. “Due to the overall slump, developers are offering discounts if the buyer can pay quickly. Investors cannot always get quick return on the investment, however. The wait can be long and if a sale is urgent, they may have to sell at a lower rate. The real estate sector will always be an avenue of opportunity – it’s all about getting the timing right.”


Expert advice

More than simply helping a client take advantage of the business opportunity, Sunil Hansraj says the accountant’s role is to understand the microeconomics and be able to give the investor the assurance that standards are being adhered to and transparency is being maintained.

 “The accountant can play an important role in determining the health of the industry, over a long period of time,” says Sunil.

Malta rarely registers in global property market reports, but that doesn’t mean its capital Valletta – the smallest national capital in the EU – isn’t an attractive location for investors. Pierre Galea Musù of UHY Pace, Galea Musù & Co in Malta points out that Malta recorded the highest quarterly increase in house prices in the EU (+6.2%) in the third quarter of last year.

 “There is demand, a large percentage of which is definitely from international investors,” he says. “We have a strategic location, possibly the best climate in the world, a favourable health system and our infrastructure is improving – albeit slowly – thanks to EU funds.”

While analysts debate whether falling populations in smaller European cities, for example, or the high productivity of Singapore or Tokyo should be uppermost in decision-making, David

Burns believes that, whatever the city, local knowledge is imperative. “Accountants have an extensive knowledge of the market through their clients. They apply that knowledge to help potential investors use their funds more effectively,” he says. “Preparing feasibility studies and financial forecasts for property investments can provide a holistic overview that is very valuable when it comes to decision-making.”

Pierre Galea Musù agrees. “At local level, the accountant is both advisor and consultant and takes a holistic view on the client’s behalf – helping with discussing re-domiciliation, retirement schemes and tax benefits, to finding trusted realty advisors and ensuring clients get fair deals and good aftersales service.”

Before being able to tap into that local expertise, investors need to have shortlisted the cities of interest to them. Size and predicted growth are not necessarily enough. According to Savills’ research, the hotspots will be the ‘smart cities’ – those that are dealing with the challenges of urbanisation by creating new infrastructure or bringing in favourable regulation. The research cites London’s Crossrail and Grand Paris in Paris as examples of where new transport infrastructure would reduce journey times for people living on the fringes, with a positive effect on property markets. Singapore is also cited as a megacity that combines a high-density population with high liveability thanks to investment in public transport, low impact buildings and a large network of cycle paths and pedestrian walkways.

So, the focus, it seems, needs to be on ‘winning cities’ rather than countries. Investing in just one or two cities across a region could still bring valuable growth, providing buyers do their homework and take advantage of the wealth of local information.

Contact the UHY executive office, for more information about UHY global property capabilities or visit to find out more.

Notes for Editors

Press contacts:
Dominique Maeremans          
Tel: +44 20 7767 2621, or email:


Powerhouse potential – ASEAN...



Bold, ambitious and alive with opportunity – the creation of the ASEAN Economic Community could transform the economies of ASEAN countries. As the new economic powerhouse takes shape, UHY Global looks at the prospects for businesses in and beyond the region.

Growing populations of people with spending power and proximity to key markets already make the ASEAN region look promising, and now the new ASEAN Economic Community (AEC) is expected to help open up this market of 632 million people and a combined GDP of almost USD 3 trillion. Furthermore, free trade agreements with China, Japan, Korea, Australia, New Zealand and India put ASEAN and the AEC in the centre of a global supply chain with strong connections to the major Asian economies.

ASEAN, originally created as a political alliance to control the spread of communism in Southeast Asia, now has ten member states – Brunei Darussalam, Cambodia, Indonesia, Laos, Malaysia, Myanmar, the Philippines, Singapore, Thailand and Vietnam. The association has a far greater influence on trade, politics and security issues than its members could hope for individually.

Last year, two important milestones were reached that put ASEAN countries en route to having greater potential impact on global trade. The first was the integration of accountancy services, a development covered in the previous issue of UHY Global. The second was the launch on 31 December 2015 of the AEC, which aims to create a single market and production base – albeit respecting national differences.


Battling BRICS

The arrival of the AEC looks set to see a shift in international economics – not least because the BRICS countries are losing their shine thanks to a slow-down in China, falling commodity prices in Russia, and South Africa, India and Brazil struggling with massive current account deficits, political uncertainty and currency volatility.

Diversity is one of the draws. Markets such as Cambodia, Laos and Myanmar, which manufacture low-value goods for export, have been barely touched by foreign investors. Vietnam has become a hub for textiles and footwear, while Malaysia is strong on both commodities and technology. Indonesia also has a huge commodities base, while Singapore is the region’s financial hub and home to high value industries such as pharmaceuticals and IT. Supporting these industries is a labour force with skills to match.

Steven Chong, partner, UHY Malaysia, who is based in Kuala Lumpur, is excited by the potential of the AEC.

“The AEC is projected to become the fifth largest economy in the world by 2018. Successful integration – or even semi-successful – would mean immediate growth potential for all sorts of businesses fuelled mainly by the increasing purchasing power within the region,” says Steven.

Is it still too early, though, for businesses to put the AEC on their radar for trade and growth? Steven says it comes down to timing and good execution. “Members of the AEC are very different in their stages of market maturity. Depending on the type of product or service that a business is involved with, I believe there’s a suitable market for all, by virtue of the fact that the ASEAN marketplace is so diverse.

“The most obvious opportunity, as I see it, would be in the manufacturing sector,” he adds. “We’re already seeing lots of manufacturing facilities moving to, or setting up, in the Mekong region. While this phenomenon has arisen because it’s a low-cost region for manufacturing, ASEAN’s young population, coupled with urbanisation and an increase in purchasing power, would also fuel opportunities in consumer products and services.”


Strength and resources

While the AEC brings nations together, the bloc should not be thought of as homogenous.

Businesses considering ASEAN need to remember that members are culturally diverse in terms of language, religion, customs and work etiquette. The strategy and allocation of their resources should always reflect the characteristics of the ASEAN nation a business is interested in working in.

For businesses in the region already, the AEC is a passport to working closely together to develop a strong and unified economic bloc. Companies can capitalise on each other’s strengths and resources, while operating in a region that already shows immense potential to generate sustained consumption of products and services well into the next 50 years, with a combined population second only to China and India.

Bob Gill is General Manager for Southeast Asia at ARC Advisory Group, the leading technology research and infrastructure advisory business. He sees the AEC as a work in progress, but one with huge promise.

“Even before the arrival of the AEC, Southeast Asia was becoming an increasingly relevant part of the global economy. By 2020, GDP is forecasted to exceed USD 4 trillion, and by 2030, USD 9 trillion,” he says. “Increasingly, industries are being established and expanded to meet rising levels of affluence, as more people drive cars, choose convenience foods, take modern medicines, and desire brand-name personal care items and everything that goes with the consumer lifestyle.

“While many areas of the world, including China, face shrinking and ageing populations, Southeast Asia is set to see the addition of some 114 million inhabitants between now and 2035. Crucially, this population growth is accompanied by a demographic dividend in the form of an increasing working-age population, which is critical to growth.”

This all means businesses beyond ASEAN should definitely have the region on their radar, and the opportunities, says Bob Gill, are broad.

“Consumer-based industries such as auto, personal and household care items, food and drink, pharmaceuticals and chemicals may benefit from the growing population and a rising middleclass. Infrastructure industries – cement, airports, ports, roads, rail and telecoms – are likely to be in demand as the region develops. Energy companies – oil, gas and power-related – will be needed to meet the increasing energy needs of industries and consumers.”

The potential for Southeast Asian companies will expand, he believes, thanks to the region becoming much more interlinked and cohesive. Internally, for example, the removal of tariffs and non-tariff barriers should reduce business costs and promote trade.

“Companies can look forward to being part of a region that is becoming prominent on the world stage. Note, for example, the first ever US-ASEAN Summit held in February 2016 and hosted by President Obama.”


Work in progress

There are, however, challenges as well as opportunities. The first is the enormous disparity in terms of levels of development and market sophistication. The second is that some nations are less open to foreign workers, which can have an impact if a company needs to upskill but lacks a management team that can transfer expertise. The third is infrastructure.

In Singapore, infrastructure development has boosted GDP growth, but Indonesia, Cambodia, Laos and Myanmar are finding that their growing economies are outstripping transport networks – and the result can be seen in supply chain bottlenecks.

Analyst and researcher Elodie Sellier, writing for The Diplomat, an online international news magazine for the Asia-Pacific region, also highlights the many remaining barriers to free trade.

“Consumer laws, intellectual property rights, land codes and investment rules have yet to be harmonised at the regional level,” she says, “while the lack of common, integrated banking structures, alongside the absence of an agreement on common and acceptable currencies, are likely to hinder market access for regional small and medium-sized enterprises.”

However, ASEAN is committed to building an investment environment to attract businesses. The ASEAN Comprehensive Investment Agreement (ACIA) includes commitments to liberalise and protect cross-border investments and sets out best practices for how foreign investors and investments are treated.

Michael Aguirre, managing partner, UHY M.L. Aguirre & Co. CPAs in the Philippines, would like to see reforms around non-tariff barriers and a reduction in the amount of red tape companies have to deal with. He also believes that failing to harmonise tax rules and the ease of doing business could lead to intra-ASEAN competition in terms of attracting investments.

“The introduction of structural reforms nationally and taking bold actions regionally will further deepen economic integration,” says Michael. “Now, more than ever, the private sector needs to take a greater interest and play a larger role in shaping ASEAN and the AEC in ways that will benefit not only the people of Southeast Asia but also the emerging economies of the world.

“Sectors such as accounting and advice services, aerospace, engineering, manufacturing and legal services present untapped business opportunities for thousands of companies across the ten member states. Most have been ignored in the past, but AEC’s framework is geared towards achieving the long-term development aspirations of its members and provides a channel for borderless economic activities.”

UHY member firms across the region are in agreement that Southeast Asia is brimming with potential, offering hugely interesting and promising trading opportunities – perhaps even the most important since the global financial crisis. As the AEC takes shape, it’s clear that businesses wanting to grow or expand should have ASEAN on the radar.

For more information on UHY’s member firms throughout the Asia-Pacific region, visit

Notes for Editors

Press contacts:
Dominique Maeremans          
Tel: +44 20 7767 2621, or email:

Companies in UK and Russia enjoy lowest corporation taxes of major global economies...



Headline rates in both countries well below global, G7 and BRICs averages

USA and Japan top table for highest corporation tax rates

Companies in Russia and the UK are enjoying the lowest corporation taxes (accounting for just a fifth of their profits) of the major global economies included in a new study by UHY, a leading international accounting and consultancy network.

According to UHY, Russia’s headline corporation tax rate was 20% on taxable profits of USD 1,000,000 for the financial year ending 2015*, while in the UK the rate was 21%.

Both are far lower than the global average corporation tax rate of 27%. For BRICs economies the average is 27.9% and the G7 average is even higher at 32.3%.

UHY explains that low corporation taxes can help countries create economic advantage and fuel growth by freeing up more capital to encourage company investment and attracting foreign companies to locate there.

UHY points out that in the UK, the headline rate was cut by 3% from 24% the previous year**, and is set to decrease further, from 20% in 2015/16 to 18% by 2020, as the government seeks to bolster the economic recovery and create a more company-friendly environment.

Russia’s corporation tax regime compares very favourably with other BRICs economies. It is five percentage points lower than in China (which charges 25%) and 13 percentage points lower than India and Brazil (where rates are 33.1% and 33.7% respectively).

UHY says that for Russia, maintaining a competitive rate is especially vital, as economic sanctions and geo-political tensions have made it increasingly challenging for it to attract foreign investment.

UHY tax professionals studied corporation tax data on taxable profits of USD1,000,000 in 31 countries across its international network, including all members of the G7, as well as key emerging economies.

The USA is at the top of the table of economies with the highest corporation tax in the study, charging a headline rate of 41.1%. However, UHY points out that this is in fact mitigated by a variety of schemes and deductions which result in many companies’ effective tax rate being far lower.

Japan is also in the top three, despite reducing corporation tax by 2.5% in a year as part of Prime Minister Shinzo Abe’s “Abenomics” policy to stimulate growth in the Japanese economy following more than two decades of stagnation.

Interestingly Malta has the fourth highest (tied with Argentina) corporation tax in the study. However, UHY points out that Malta credits any income tax paid by a company to the shareholders when profits are distributed. This credit along with a system of refunds reduces the effective tax rate far below the headline 35% rate.

Comments Bernard Fay, Chairman of UHY: “When economies are under pressure – as many around the world continue to be – keeping the tax burden on companies as light as possible is critical for competitiveness. However, this is not an easy call for cash-strapped governments to make.”

“Enabling companies to retain more of their profits encourages them to re-invest more capital back into their company, helping to drive innovation and deliver operational efficiencies to enhance productivity and cut on-going costs.”

“At more than ten percentage points lower than the G7 average corporation tax rate, the UK now has one of the most competitive regimes in the world. This is benefitting UK-based companies of all sizes.”

“With further cuts planned over the next few years, the UK is looking to help its domestic company base grow, while at the same time making a play for more corporate investment from overseas.”

“Russia has attempted to give a much-needed boost to home-grown companies and foreign companies located there by keeping corporation tax low, in order to offset the impact of economic sanctions and the slump in oil prices.”

UHY says that of the 31 countries in the study, most (74%) have kept corporation tax rates the same over the last two years. Six (19%) lowered rates last year, while just two countries (Israel and India) raised it (see table below).

Bernard Fay says, “Clearly there is not much scope for governments to raise corporation tax rates in the current climate but there is little appetite to lower them either. For those with the highest rates, that could be short-sighted.”

“Tinkering around the edges with a variety of reliefs and exemptions can create far more complicated systems which are then far more open to abuse and error. Simply cutting the headline rate sends a very clear message that an economy is very much on this side of companies. ”

UHY adds that the UAE has the lowest corporate taxes of any country in the study – charging no corporation tax at all – followed by Ireland (12.5%) and several eastern European countries including Romania, the Czech Republic and Croatia.

Comments, Kresimir Budisa from UHY HB EKONOM in Croatia, “Eastern European countries such as Croatia are well positioned to seize competitive advantage from their comparatively much higher taxing western European neighbours such as France, Italy and Germany, where other costs are also much higher than in Croatia.”

“As infrastructure and skills levels have dramatically improved, Eastern Europe has become an increasingly dynamic and rewarding company location, and lower corporate tax rates are tipping the balance even further in our favour.”

Global corporation tax rankings (by highest rate levied)




***In recent tax years, Spain has reduced the corporate tax rate from 30% to 28% in 2015 and to 25% in 2016, with start-ups paying a reduced 15% in their first year of profits.


Notes for Editors

Press contacts:
Dominique Maeremans          
Tel: +44 20 7767 2621, or email:

UHY strengthens presence in Africa...



New member firm in Seychelles joins the UHY network

We welcome Premier Financial Services (Seychelles) Limited, our new member firm in Seychelles, to the global accountancy network UHY, extending our coverage within the African region.

Premier Financial Services (Seychelles) Limited, formed in 2014, provides clients with fiduciary and trust services, company formation, international tax planning and structuring, company secretarial services, accounting/ bookkeeping and other ancillary services to a portfolio of local but mainly international clients. It is duly licensed by the Seychelles Financial Services Authority as: International Corporate Services Provider and International Trustee Services Provider.

Managing partner, Mr Vimal D. Damry, TEP, Premier Financial Services (Seychelles) Limited, says: “Being part of a well recognised and reputable international network is very exciting for us. It underpins our commitment to deliver quality services and enhances the advice we can offer our clients looking to expand in other jurisdictions. Africa has become the destination for emerging markets investors. Whether the client is a fund promoter, private investor or international trader, Premier Financial Services (Seychelles) Limited is well placed to provide clients with the right solutions for the right structure, including legal matters and provisions for Double Taxation Treaties.”
Bernard Fay, chairman of UHY comments: “We are delighted to welcome Premier Financial Services (Seychelles) Limited to the UHY network, extending our African region coverage and strengthening UHY’s regional market expertise and capabilities to support clients’ needs and opportunities.”

The firm is in the process of adopting the UHY branding and will be known as UHY Premier Financial Services Limited.


Liaison office for UHY Premier Financial Services Limited
Contact: Mr Vimal D. Damry, Managing Partner
Tel: +248 430 3777 or +230 5 711 1639 

UHY press contact:
Dominique Maeremans, marketing & business development manager
UHY International
Tel: +44 20 7767 2621

UHY strengthens presence in the Middle East...



We welcome El Sayed El Ayouty & Co, Certified Public Accountants, our new member firm in Bahrain, to the global accountancy network UHY, extending our coverage within the Middle East.

El Sayed El Ayouty & Co, formed in 1989, is based in Manama and with a team of 26, including 2 partners, the firm provides audit, accounting, management and legal consulting services to a portfolio of local and Gulf Cooperation Council (GCC) clients, primarily in the wholesale, manufacturing, real estate, contracting/trading and services sectors.

Managing partner, Mohammed Al Shayeb of El Sayed El Ayouty & Co, says: “Being part of the UHY global network underpins our commitment to deliver quality services and enhances the services and advice we can offer our clients. The global presence of the network combined with the expertise and knowledge shared among UHY’s 7,600 colleagues around the world, not only strengthens our own capabilities, locally and internationally, but also these of our current and potential clients and their operations.”

Bernard Fay, chairman of UHY comments: “We are delighted to welcome El Sayed El Ayouty & Co to the UHY network, extending our Middle Eastern coverage and capabilities in one of the region’s pioneering nations located at the heart of the GCC. Bahrain’s Economic Vision 2030, based on competitiveness, fairness and sustainability, combined with the region’s favorable economic incentives have invigorated economic development and the investment environment. El Sayed El Ayouty & Co’s admittance to the UHY network will further strengthen UHY’s regional market expertise and capabilities to support clients’ needs and opportunities in the GCC region.”

The firm is in the process of adopting the UHY branding and will be known as UHY El Sayed El Ayouty & Co. Certified Public Accountants.


Liaison office for El Sayed El Ayouty & Co
Contact: Mohammed Al Shayeb, Managing Partner
Tel: +973 17531631

UHY press contact:
Dominique Maeremans, marketing & business development manager
UHY International
Tel: +44 20 7767 2621

UHY appoints new member firm in Chile...



We welcome GUIÑAZU & ASOCIADOS SpA, our new member firm in Chile, to the global accountancy network UHY, extending our coverage within South America.

GUIÑAZU & ASOCIADOS SpA is based in Santiago and with a team of 32, including 3 partners, the firm provides audit, accounting, pay-roll, tax and management consulting services to a portfolio of local and international clients primarily in the manufacturing, service, education, engineering, construction and mining sectors,

Audit managing partner of GUIÑAZU & ASOCIADOS SpA, Juan Olivares Hernandez says: “We hope our local expertise and the UHY network’s collaboration will help us to enhance the services and advice we can offer international clients wishing to invest in Chile. The global presence of the network combined with the expertise and knowledge of UHY’s 7,600 colleagues around the world, not only strengthens our own capabilities, locally and internationally, but also these of our current and potential clients and their operations.”

Bernard Fay, chairman of UHY comments: “We are delighted to welcome GUIÑAZU & ASOCIADOS SpA to the UHY network, extending our South American coverage and capabilities in one of the region’s most stable and prosperous countries. The Chilean Government’s simple and transparent approach guarantees foreign investors access to the official foreign exchange market. Local tax reforms to encourage investment in R&D also bring additional FDI to new parts of the economy. GUIÑAZU & ASOCIADOS SpA’s admittance to the UHY network will further strengthen UHY’s regional market expertise and capabilities to support clients’ needs in this region.”

The firm is in the process of adopting the UHY branding and will be known as UHY GUIÑAZU & ASOCIADOS SpA.

Liaison office for GUIÑAZU & ASOCIADOS SpA.:
Audit managing partner, Juan Olivares Hernandez
UHY International
Tel: + 56 2 32138700  

UHY press contact:
Dominique Maeremans, marketing & business development manager
UHY International
Tel: +44 20 7767 2621

Taxes on employment start to fall globally but businesses still paying out more than a fifth of employees’ salary in employment taxes...



• Costs of social security and other “taxes” on employees rising fastest in the Netherlands and China

• Significant differences in employment costs across G7 economies

The average extra cost to businesses in social security and other employment “taxes” has fallen by 5% since 2012, but globally still accounts for 20% of an employee’s annual salary, according to a new study by UHY, the international accounting and consultancy network.

UHY says while the global decline in the amount that businesses have to pay in additional employment “taxes” – on top of employees’ wages – is encouraging, it still remains persistently high, and many countries are now seeing double-digit percentage increases.

According to UHY, employers in the Netherlands, China, Israel, and France have had to bear substantial increases in employment costs they pay for each employee in the last three years.

UHY says that such proportionately high levels of employment costs could put job creation and real income growth at risk in many countries world-wide.

The Netherlands saw the greatest increase in employment costs of the countries studied, with employment taxes more than doubling since 2012* from 6.7% to 14.8% of an employee’s salary. The reason for the dramatic jump is the ‘Uniform Definition of Wages’ law , enacted in 2013, under which mandatory contributions for health insurance are now levied on Dutch employers.

China has seen one of the largest increases of any country in the study: the amount of ‘tax’ and social security payments paid by employers has increased by 33% since 2012*. Chinese employers are now paying an average of USD12,518 per year in employment costs for an employee earning USD30,000, equating to 42% of an employee’s salary. This is up from 32% in 2012 or USD9,263 more than employers were paying three years ago.

This is well above the global average of USD6,141 (or 20% of gross annual salary), and the average of BRIC countries of USD10,732 (36% of gross annual salary).

UHY studied data in 29 countries across its international network, calculating the value of payments companies have to make, such as social security contributions, on top of the gross salary they pay to individual employees (see tables below).

UHY adds that China has seen double-digit increases in employer taxes as a proportion of wages across every salary band studied (USD15,000, USD30,000, USD75,000 and USD300,000).**

Employers in China are now paying USD834 more per year on a salary of USD15,000 (an increase 14% since 2012), USD4,188 more per year on a salary of USD 75,000 (up 42%), and USD4,188 more per year on a salary of USD300,000 (also up 42%).

Brazil still has the highest taxes and compulsory insurance costs for employers of any country in the study at 71% of a USD30,000 salary, with no significant changes since 2012, apart from a Government payroll tax exceptions policy. At USD21,408 in payments on top of salary, this is almost 19 times higher than the country with the lowest employment costs in the study – Egypt, where firms pay just 4% extra (USD1,108).

Significant differences in employment costs across G7 economies

By contrast, businesses in the G7 economies saw their social security and other employment costs fall by 18% over the same period, meaning that they now tax in line with the global average at 20% of salary. They now pay an additional USD6,050 – USD482 less than three years ago.

However, while several G7 nations – notably Canada, the US and the UK – have comparatively low employment costs (ranging from 7-9% for low earners) France and Italy’s costs remain high (at 43% and 39% respectively). This is despite Italy seeing one of the biggest falls of more than 25% since 2012.

UHY highlights that employers in France now pay USD12,797 when hiring an employee with a salary of USD30,000, a 16% increase in costs since 2012.

Comments Bernard Fay, Chairman of UHY: “Governments risk undermining much-needed growth if they disincentivise job creation and stifle income levels with sky-high employment-related taxes.”

“High taxes on employment encourage employers to substitute staff for technology.”

“At a time when the global economy is only gradually returning to health and the recovery in many countries is still very fragile, this is more vital than ever.”

“France is a clear case in point. The downsides of mandatory employment costs escalating so rapidly at this stage need to be carefully weighed up against the benefits the government hopes to achieve.”

“Countries such as China are struggling to regain their economic momentum, having seen growth slowing dramatically. But rising wealth in the last couple of decades means there is still strong political pressure to offer social security safety nets. They are starting to face the same challenges seen in developed economies of the need to balance welfare provision, economic growth and fiscal responsibility.”

Increased prevalence of targeted incentives to tackle unemployment

UHY adds that many countries seek to tackle unemployment and minimise its impact on their welfare budgets by incentivising employers to create new jobs. These are often targeted at specific groups such as the unemployed, or those starting their first jobs.

Bernard Fay explains: “Governments recognise the logic of reducing employment taxes, but many fear that across-the-board cuts cannot be afforded, particularly given the costs associated with ageing populations.”

“Increasingly we are seeing targeted measures as a compromise. For example, from 2015 in the UK, employers pay less National Insurance for employees aged under 21. Italy has also recently introduced changes, with new tax and social security exemptions for employers offering first jobs, or permanent jobs to those previously unemployed.”

“However, too many exemptions can lead to an overly complex tax code.”

In Sydney, for example, an AUD5,000 rebate is available for businesses creating new jobs, while other Australian states offer rebates and exemptions for apprentices. Similar incentives for employers of apprentices or those starting their first jobs also exist in France, while in Mexico there are also incentives for employers with staff over retirement age.

Tax, social security and other payments made by businesses on top of gross salaries by USD and payments as % of gross salary 2015 – ranked by percentage change since 2012



*Based on a gross annual salary of USD30,000

**The other salary brackets examined are (USD15,000, USD30,000, USD75,000 and USD300,000) and can be consulted in the supporting report.

***Based on figures for Shanghai as a representative city of Chinese costs

****Including levies

*****Unranked as 2012 data unavailable


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The cost of ‘taxes’ on jobs around the world - front page

The cost of ‘taxes’ on jobs around the world








Notes for Editors

Press contacts:
Dominique Maeremans, UHY International          
Tel: +44 20 7767 2621, Email:

Nick Mattison or Richard Crossan, Mattison Public Relations
Tel: +44 20 7645 3636, Mob: +44 7446 375 555

UHY appoints new member firm in the Palestinian territories...



We welcome Hassouneh Auditing Firm in the Palestinian territories to the global accountancy network UHY, extending our coverage within the EMEA region.

Hassouneh Auditing Firm, formed in 1981, is based in Hebron and is managed and founded by Mohammad Akram Hassouneh who is also chairman of the Palestinian Association of Certified Public Accounting (PACPA) and vice president of public relations for AFAA (Arab Federation Accounting Association). With a team of 14, including 2 partners, the firm focusses on providing accounting, tax, VAT advisory and audit services to a portfolio of clients primarily in industrial, trading and service sectors. The team brings also good knowledge of non-governmental organisations.

Managing partner, Mr. Mohammad Akram Hassouneh says: “Being a member of a well recognised and reputable international network is very exciting for us. We are looking forward to further enrich our own capabilities and opportunities coupled with our longstanding presence in the Palestinian market and our diversified background. The global reach of the network and the knowledge of UHY’s people will not only strengthen our own expertise but also bring new opportunities for our clients and their operations.”
Bernard Fay, chairman of UHY comments: “We are delighted Hassouneh Auditing Firm has joined the UHY network further enhancing the UHY footprint in the region. Congratulations to Mohammad Akram and his team who are keen to collaborate with UHY member firms’ globally.”

The firm is in the process of adopting the UHY branding.


Liaison office for Hassouneh Auditing Firm
Contact: Managing partner, Mohammed Akram Hassouneh on +972-2255750     

UHY press contact:
Dominique Maeremans, marketing & business development manager
UHY International
Tel: +44 20 7767 2621