How the pandemic is creating a financial windfall for people willing to relocate

Countries including the UAE have embraced the work-from-anywhere trend and are offering new types of visas to lure workers

The work-from-anywhere trend allows workers to relocate to their preferred location and helps them to save money. Getty Images

Trapped between low wages, a rising cost of living and stretched finances, middle-income earners around the world were struggling to meet household expenses and still have some money left over to save or invest for a rainy day. Then the pandemic struck and turned everything upside down.

While the virus wreaked havoc on the global economy and our personal finances, it also shook up and upended many traditional, long-held norms around employment. Thus, from the chaotic swirl of a global health crisis emerged the work-from-home trend. The pandemic-led arrangement has proved so successful, according to research by Antlassian, it has already started to morph into something much bigger – the work-from-anywhere trend.

It didn't take long for people, unshackled from their office desks and time-sucking daily commutes, to move out of cities in record numbers. The more intrepid of them sought and found the undeniable and tangible financial benefits of relocating to cities and countries that afforded significantly lower cost of living than their own.

These digital nomads have embraced the idea of working from anywhere to reap, among other rewards, the benefits of geographic arbitrage.

Simply put, geographic arbitrage means strategic relocation to places where people can continue to earn in a stronger currency but are now spending it in the weaker currency of their new home. It could be, for instance, a person employed by a company in the UAE, but working from India or Pakistan or Bangladesh. Or someone working for an employer in the US, Australia, or the UK, while living in the UAE, thereby earning in dollars or pounds, and spending in dirhams.

"While work-from-home allows workers to have greater control over how they spend time and reduces their commute, work-from-anywhere additionally allows workers to relocate to their preferred location," says Prithwiraj Choudhury, professor at Harvard Business School and author of the recent Harvard Business Review article Our Work-from-Anywhere Future.

“This allows workers to move to cheaper towns, closer to extended family and mitigate constraints around dual career situations and restrictive immigration policies.”

The work-from-anywhere (WFA) arrangement is a win-win for both workers and employers. Those who move to a cheaper location could benefit from lower tax rates, property taxes and general cost of living. For companies offering WFA policies, it is a way to cut property costs as their employees no longer work from a fixed office in a commercial complex.

Mr Choudhury – a remote work expert who has been studying the phenomenon since well before the Covid-19 outbreak – insists that working from home is not the right model, even if it was a pandemic-induced short-term necessity. The new employment normal, he insists, needs to be work-from-anywhere, or it is more likely to be a failure.

The great escape

When New Yorker Jincey Lumpkin recovered from a month-long health battle with Covid-19 in April last year, she realised it was time for a change. She sold her investment property in Florida and packed her bags for Portugal, where she now lives. Working predominantly for her clients in the US, she’s still sticking to an East Coast schedule. The financial benefits of the relocation proved to be bigger than she anticipated. “If you are living on a foreign salary, Portugal is super affordable,” says Ms Lumpkin, noting she’s spending far less there than she had budgeted for.

For starters, Ms Lumpkin, a writer and beauty industry expert, was able to rent an apartment in Portugal that was €650 ($788.93) under her budget. “Of course, you still have to add 12 to 15 per cent in the conversion from dollars to euros, but once your money is here, and you are operating in local currency, you can really see the savings,” she says.

Ms Lumpkin is acutely aware of her privilege. More so in light of the pandemic's health and financial challenges faced by the global population. “I know how lucky I am to have a job, to have savings and to have the freedom and flexibility to make a bold move like this,” she says.

While she admits the move has been financially rewarding, Ms Lumpkin insists she isn't a fan of the "geographic arbitrage' tag. "It sounds terrible, very Gordon Gekko, thinking about getting a 'financial leg up' while living in a foreign country with your expat dollars sounds like diseased late-stage capitalism," she says, preferring to look at her move more as sharing than exploiting. "Remote work gives me the possibility to share my wealth with new people in new places – and mutually benefit from what we all have to offer," she adds.

Closer to home, creative writer Mark, who only wants to be identified by his first name, was on vacation in the UAE to spend time with his Dubai-based girlfriend when the pandemic broke out and forced the country into a lockdown. London-based Mark works for Shilpa P, a UK-based small business consultancy service. It wasn’t long before he negotiated with his employer to be allowed to work remotely and decided to stay on in Dubai. “It was also really easy to work remotely in the job that I did, even though I did meet with my boss regularly for work,” says Mark.

The move resulted in significant savings almost immediately. “I absolutely have saved lots of money because out of the lockdown I decided to stay here in my girlfriend’s apartment [paid for by her company], so the biggest cost saving to me has been London rent, London taxis and transport, even the Underground day trip in London can cost me around £12 [US$16.45] and here [in Dubai], it’s one eighth of that and the buses and water taxis are even cheaper,” Mark notes.

While he misses his London routine and network of friends, the benefits of Dubai far outweigh any emotional cost of relocation. “I feel much happier in Dubai, the environment is fantastic, it’s very safe here compared to London and the lifestyle is amazing,” he says, adding he’s hired a car and is making the most of cheap petrol in the emirate.

Apart from financial gains, the overall sense of well-being has helped ignite Mark’s creativity and he says he feels “much more productive as I seem to have more time for myself and for us in the evenings as opposed to London where I’d be commuting or working till much later”.

Mixing business and pleasure

Sensing the economic opportunity of the remote working trend, many countries have rolled out the red carpet to global digital nomads. Dubai, for instance, has launched a remote-working programme that allows professionals to live in the emirate while employed by companies overseas. The new visa scheme aims to lure long-term travellers, remote workers, and their families to relocate to the desert city, while continuing to work virtually for companies around the world. Those interested can find more details of the programme and apply here.

In the longer term, the UAE also offers a 10-year golden visa and five-year retirement visa for people aged over 55. And just this weekend, Sheikh Mohammed bin Rashid, Vice President and Ruler of Dubai, announced on Twitter that the UAE would offer Emirati citizenship to "talented and innovative" people.

Globally, residency schemes have been introduced by Bermuda, Barbados, Estonia, Greece and Georgia, allowing foreigners to work remotely from these countries while enjoying local culture, climate and cuisine.

And as the work-from-abroad tribe grows, so do specially packaged offers from the hospitality industry. Leading hotel operators including Marriott, Hilton, and Airbnb have been quick to capitalise on the movement. Buffeted by the pandemic travel restrictions, some of these hotels are now enticing remote workers with creative and tailor-made deals including special rates, high-speed internet, workspaces, makeshift offices, and a crash course in geographic arbitrage.

A win-win for workers and employers

Increasingly, businesses are warming up to the idea of allowing their employees to work remotely, a Gartner survey found. In many cases, from anywhere in the world. Having debunked the old-school idea that proximity boosts productivity, the switch to remote working has also delivered some tangible gains for employers. "The biggest benefit and the reason companies should take work-from-anywhere seriously is that it will help firms attract and retain global talent," insists Mr Choudhury of Harvard Business School.

With technology making it possible for employees to be in different geographies to collaborate and communicate synchronously, more companies are embracing a decentralised working structure.

Apart from ensuring the well-being of employees, remote working is helping businesses keep their operating costs lower. Research shows companies that have adopted remote working models have saved millions of dollars including rent and utility costs, cleaning and maintenance, food, insurance, and taxes. Other perks include improved employee retention, enhanced productivity, reduction in absenteeism, and access to a much larger pool of talent unencumbered by geography.

WFA is the way forward

The tailwind for work-from-anywhere is also fanned by increasing demand among workers for more elastic employment terms. Given the popularity and financial benefits of telecommuting, it would be hard to put the remote work genie back in the bottle. “The pandemic has forced many workers to do their job remotely for the first time, many of them have moved to a location far away from where the company is located, and I expect many workers to continue demanding for geographic flexibility even after the pandemic is behind us,” forecasts Mr Choudhury.

His assertions are borne out by companies like Google that have already extended employees' return to work as far back as September 2021. Even when the workers return, they will be expected to work in person for only a few days a week. Other tech companies, such as Twitter and Facebook, as well as Dubai-based Careem, have offered the option of working remotely forever, effectively allowing employees to relocate to other parts of the world if that is what they want to do.