As international recruiters we have the honour of recruiting staff all over the world, and as such, are often asked to do salary comparisons across countries. Our candidates also do direct conversions online from the salary they are currently earning, into the currency of the country in which they are applying to work.
However, is it really that simple? In short, the answer is NO.
Today we are comparing the purchasing power of money across major cities in the Middle East to make more sense of value for money.
THE PURCHASING PRICE OF MONEY: More Bang for your Buck!
The purchasing power of money refers to the quantity of goods and services that can be bought with a unit of currency.
The first thing that our research led us to, was that Kuwait is the only country that imposes no VAT (Value Added Tax) on their employers and citizens!
VAT (and Taxes Compared)
- – There is no VAT in Kuwait
- – The VAT rate in the UAE is 5%
- – Alcohol is subject to excise tax in the UAE. The excise tax rate on alcohol is typically 100% of the retail price.
- – The VAT rate in Saudi Arabia is 15%.
- – The VAT rate in South Africa is 15%
- – The VAT rate in Western Europe, varies by country, but they typically range from about 17% to 27%.
Now let’s have a closer look:
Kuwait – Dubai (UAE)
- Groceries in Kuwait are generally about 10-20% cheaper than in Dubai.
- Many employee working in Dubai are tired of the “Las Vegas” like feel of living in Dubai and don’t see the non-alcohol city of Kuwait as a negative. Instead, they get to enjoy authentic Middle Eastern culture and experiences
- The purchasing power of the Kuwaiti Dinar (KWD) is generally higher than that of the UAE Dirham (AED). This means that, on average, the KWD can buy more goods and services than the AED when comparing similar items.
- As of recent data, the exchange rate typically places 1 KWD at around 12-13 AED. However, the actual purchasing power can vary based on local prices for goods and services in both Kuwait and the UAE.
- For those wanting the occasion “party time”, flights are short and cheap to other cities in the GCC, for example:
- Kuwait – Dubai Return: A return flight from Kuwait to Dubai typically costs from KWD50
- Kuwait – Bahrain Return: A return flight from Kuwait to Bahrain typically costs KWD 30 to 40, with flight time being around 1 hour only
Kuwait – Riyadh, Saudi Arabia
- Some reports suggest that grocery prices in Kuwait City can be significantly lower than in Riyadh, with figures around 20-25% being cited in various comparisons.
- The purchasing power of the Kuwaiti Dinar (KWD) is generally higher than that of the Saudi Riyal (SAR). Typically, 1 KWD is equivalent to about 12-13 SAR, indicating that the KWD can buy more goods and services than the SAR.
Kuwait – Qatar
Kuwait is still generally considered to be cheaper than Qatar. Groceries, transportation, and some daily expenses in Kuwait may be lower by around 10-15%.
So in terms of Costs, do we have a winner?
A Deeper Dive into the Pros and Cons of Living in Kuwait:
What does Kuwait City have to offer you:
- A developed Hospitality Offering centring around the VIP and Luxury 5***** markets
- Authentic Culture: A rich, authentic Middle Eastern experience, without the “Las Vegas” feel of cities like Dubai.
- Stable Environment: Politically stable with a welcoming culture.
- Strong Expat Community: Tight-knit, supportive social circles.
- Generous Benefits: Comprehensive expat packages include housing
- Low Crime Rate: One of the safest cities in the region.
- Free Healthcare: Public health care with some employers even offering private healthcare options for expats.
- English Spoken Widely: Easy to navigate life and work without language barriers.
Kuwait may be a no-alcohol zone, but that just means there’s a whole lot of fun to be had!
Here’s how the locals keep the good times rolling:
- Café Culture: Sip your favourite brew at vibrant cafés buzzing with conversation that last late into the night. Mocktails, speciality coffees and teas are a growing global trend.
- Dining: Indulge your taste buds in a culinary adventure! From local delights to international flavours, Kuwait’s diverse food scene has something to satisfy every craving.
- Shopping & Entertainment: Get lost in luxurious malls filled with trendy shops, catch the latest blockbuster in cinemas.
- Cultural Events: Dive into Kuwait’s rich arts scene with exciting exhibitions, captivating performances, and lively festivals that celebrate local culture.
- Sports & Fitness: Whether you’re hitting the gym, joining a sports league, or enjoying outdoor activities, there are plenty of ways to stay active and have fun!
- Beach & Water Sports: Feel the thrill of jet skiing or paddle boarding, or just soak up the sun and relax on Kuwait’s beautiful beaches.
- Desert Adventures: Embrace your wild side with exhilarating desert safaris, dune bashing, and stargazing camping trips under the vast Arabian sky.
- Parks & Outdoor Spaces: Chill out in lush parks, perfect for picnics, jogging, and outdoor events. Nature lovers will find plenty to enjoy! Walks along the seafront promenades.
- For those wanting the occasional drink and nightlife, flights to Dubai and Bahrain are short & cheap
So, in conclusion, whilst all Middle Eastern counties have a great deal to offer expats, it is important to consider the purchasing power of money when comparing job offers across currencies.
Article by: Sarah Donnelly