Finance in the Middle East: The Infographic

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Another month, and another… infographic, it seems.

This time around, it’s on everyone’s favorite topic: tax evasion.

By “tax evasion,” of course, I mean “working in the finance industry in the Middle East.”

We’ve done quite a few interviews with readers who work in Middle Eastern countries and who have recruited successfully in the region, so this combines all their stories with extra research on salaries, deals, and economic activity in the region.

If you’re reading this via email, click here to view the infographic and click here to view the Large version (or just click on the graphic itself).

Finance in the Middle East

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The Textual Version…

I’ve spent so much time staring at this thing and submitting edits to our “presentation department” that I can already anticipate your questions in advance, so let’s step through the categories one by one:

The Salaries… What?

“Wait, what? Since when do Associates make between $150K and $250K for base salaries? Are you sure those numbers are right?”

A few quick points on these numbers and the rest of the salary figures here:

  1. These figures are not based on hearsay on message boards or gossip sites, but a formal survey done by a professional recruiting group – in fact, you can click here to read it for yourself.
  2. Yes, I agree that some of the numbers are probably off; for the Associate figures specifically, my guess is that they may be including partial bonuses or including housing allowance figures that are too high.
  3. The trend lately has been to offer higher base salaries and lower bonuses (and more deferred and/or stock-based compensation) in response to regulation, so the figures here may also reflect that.
  4. If you look at the report, the figures for the VP and Associate pay are nearly the same – so they may have somehow lumped them together. VPs do have higher base pay, which could explain this.
  5. Finally, this report only lists salaries for the UAE. In other countries, salaries would almost certainly be lower.

Let’s take a look at a few of the data points from the report:

non-ib-pe-pay

Nothing in this first chart seems particularly outlandish – maybe the junior private banker pay is too high, though it’s unclear what they’re including for the housing allowance figures here.

ib-pe-pay

The Associate vs. VP pay here stands out as being “off” in some way, so I would assume that the upper end of the range is more for VPs and the lower end (and lower) is more for Associate-level compensation.

Also, I have no idea how you could even have a “5th year Analyst” so we just excluded that part completely.

An Associate who has been working for 9 years is also a little unbelievable, but if you factor in 3 years of work at the Analyst level, plus 3-4 years at the Associate level, plus possible work experience before that, it’s possible.

The Bottom Line

So no, I don’t completely believe all these numbers, and it would have been more helpful to see the breakout of base salary vs. housing allowance as well.

But you have to go with the data available, and we wanted to give some estimates of salaries in the region rather than just saying, “No idea! It takes too much work to get the information anyway.”

Taxes and Housing Allowance?

Let’s start with the easy part: yes, taxes really are that low in most of the Middle East. Go ahead and look it up on Wikipedia or government sources if you’re skeptical.

Note that some of these rates are in the process of changing, or will be changing next year (e.g. the rates are changing slightly in both Egypt and the UK) – so before you leave a comment wondering why the rate is 50% or 25% rather than 45% or 20%, that’s the explanation.

It’s a little misleading here to show only the top tax rates in Western countries, because most of your income as a junior in banking / PE / hedge funds will not be taxed at that rate. But you still end up paying a huge amount in taxes in these countries.

The housing allowance is trickier to explain, because there’s less consistent information on that one. From what previous interviewees have stated, it seems common in some regions (Dubai), but possibly not as common in other places.

Still, you can’t go wrong with any type of free, un-taxed allowance – wouldn’t it be nice to get that in New York or London?

Pakistan?!

Is Pakistan really part of the “Middle East?”

I would consider it more a part of South Asia, but we left it in here simply because you could argue that it’s part of the “Greater Middle East” – and since some investment firms and companies in the “real” Middle East do invest there.

If this upsets you, just ignore this part and all the stats from there – most of the infographic is based on the more “official” Middle Eastern countries, anyway.

Cost of Living

Showing Abu Dhabi and Dubai for the two “representative cities” here isn’t exactly the best way to show that the cost of living is lower in the region, because cities such as Riyadh are far cheaper overall.

Still, it is true that the cost of living in those two places has fallen over the past few years. It’s still expensive to live there, but you still save something over NY or London, especially when the housing allowance is factored in.

Countries?

This doesn’t show every possible country in the Middle East that has a “finance industry” – for example, there are some investment banks in countries such as Jordan, though the industry is still small and very new.

And yes, even Iran has a few banks – but it’s not exactly realistic for most Westerners to work there, so it wasn’t included.

Oh, and if you work in one of these countries that we haven’t covered yet (e.g. Israel or Egypt), we’re always looking to add additional interviews to the site so email us right away to set up an interview.

Deals and Work

Most of these sections are based on previous interviews – the privatization and regulatory factors are more relevant in Saudi Arabia.

Smaller deal teams, more “random” work, and less focus on the nitty-gritty technical details all apply throughout the region though.

Breaking In

The in-person networking trips sponsored by universities that previous interviewees have described are probably the best way to gain a foothold in the region and position yourself for interviews.

Other than that, internal transfers are the next most viable option, especially in countries like Saudi Arabia that are not exactly open to random foreigners showing up and expressing interest in working there.

The situation with headhunters may be starting to change, but as with developed markets, they are not terribly useful unless you fit the exact profile that they’re looking for.

To go into more detail on the “good story” point in the infographic: the most common mistake here is to come up with a vague “story” that doesn’t credibly explain your interest in the region.

If you talk about reading the news or following economic and financial activity in the region, that’s not a particularly strong reason for wanting to work there.

Better reasons:

  • You’ve lived there before, for a study abroad program, for an internship, or something else where you spent significant time in the region.
  • You’ve studied the language(s) for years or have majored in something that’s highly relevant to the region.
  • Your family is from the region, or you still have family living there.
  • You worked on a deal or with a client that had ties to the Middle East, and you gained firsthand exposure from that.

The less specific your reason, the more they’re going to think: “Well, he/she just wants to evade taxes and work easier hours.”

And that’s the #1 thing you want to avoid when recruiting in the Middle East.

For Additional Reading / Sources for This Infographic:

Here are the previous interviews we’ve done on the “Greater Middle East”:

Outside Research

And here are the links for the external research used in this infographic:

Any Questions?

Ask away.

About the Author

is the Founder of Mergers & Inquisitions and Breaking Into Wall Street. In his spare time, he enjoys learning obscure Excel functions, editing resumes, obsessing over TV shows, and traveling so much that he's forced to add additional pages to his passport on a regular basis.

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34 Comments to “Finance in the Middle East: The Infographic”

Comments

  1. Omar says

    Hi Brian,

    This article is excellent, Thanks for the information. I am actually working at a local Investment bank here in Saudi Arabia & sometimes we don’t have much work. (Sitting Idle) at the office. Is there a chance of getting fired if this is the case, as I am the only Analyst at the moment and all others are Senior’s.

    Regards,

    • says

      Thanks! I think the chances of getting fired are pretty low if you’re the only Analyst there – they always need you around to do work if something comes up. It seems like a lot of banks are rather slow these days, especially since it’s the end of the year as well.

    • says

      New Zealand is on the list, but to be honest it’s a smaller industry there and most banks in that region are concentrated in Australia instead. Still looking for a volunteer from there.

  2. Thang says

    Hi Brian, would HK come soon? I am interested in internal transfer or headhunters there. Have a merry Christmas. Thanks!

  3. Craig says

    Hello Brian, Nice compilation. Any idea how much should a investment banker (6 years work experience) be getting in Kuwait?

    Thanks

    • says

      Hmm, not sure about that one but I would assume somewhere in the $150K range for base salary? Bonus is highly variable but could be as much as 100% of that depending on the year. I’m not sure how much of a discount or premium Kuwait is to the UAE, though.

  4. Ravi says

    Hi Brian, Very informative article.

    I’m based in India – would it be a bad to say – I want better life standards, better infrastructure and more savings compared to the life style and savings out of an Indian Job.

    • says

      Those are not good reasons to give for working in another region – better to talk about your interest in the industries there, recent deals, companies you follow, and so on.

  5. says

    Ok, thanks for adding that. When I get comments like these, I don’t really know what to say because everything here is actually based on a lot of research and speaking with people in the region… but to respond to your points:

    1) Yes, agreed that energy and real estate are huge… which is why natural resources were highlighted as one of the key industries. However, in Saudi Arabia there are companies in other industries going public or that have gone public… see the links below. In the UAE, yes, the industry landscape is more limited.

    2) The IPOs are mostly referring to Saudi Arabia and the big push from government there starting a few years ago to take various companies public. See: http://gulfnews.com/business/markets/saudi-arabia-steams-ahead-with-47-ipo-issues-1.655604 http://english.ahram.org.eg/NewsContent/3/12/52494/Business/Economy/Saudi-airlines-unit-picks-HSBC-for-planned-IPO-Sou.aspx

    So yes, IPOs are definitely happening and have been, though maybe not in the UAE.

    3) More responsibility / less micromanagement – these comments were all from readers at bulge bracket banks who moved from London to the Middle East. Perhaps it’s different at regional banks, or in equity research.

    4) Salary information – the quotes above include the housing allowance. And they are based on a survey from a professional group that does surveys in the UAE… as of 2011. If you have different information, I’m happy to speak with you or to post your view of things, but this was a survey of at least a few hundred people working in the region.

    5) Yes, agreed that differences exist in other countries, that is why the salary information is based on a UAE survey. But I agree those numbers should have been noted as coming from the UAE.

    6) Lack of exit opportunities – depends how long you want to stay there. We don’t even really address exit opportunities here, but essentially if you’re there for a long time, yes, it’s harder to move out – if you look at the interviews we’ve done on the Middle East, everyone makes that point as well. If you’re there for not as long, it is possible to move back especially if you’ve already worked elsewhere.

    So, in short:

    1) I’m happy to present any specific views of the numbers or other information that you want to present.

    2) I think some of the differences you describe result from working in ER, as opposed to IB, and working at a regional bank rather than at a bulge bracket bank and being transferred to the region.

    • Zee says

      A couple of point in response to Tariq.
      If you are making $1000 in Pakistan (about RS 100,000) a month after 3-4 years of experience you really need to re-evaluate what you are doing or whether you are doing what is required or not. You will not make 6 figure if JUST DO YOUR JOB. You have to be above and beyond, but that is the case essentially everywhere. Average VP level draws about 200k-250k/month in Pak rupees, bonuses are above that.

      As for UAE, middle management should be around DHS40-50K/month.

      Again depends on the division. Backshop will never hit six figure dirhams a month. Front Office if doesnt hit six figures then there is a problem with the person.

      Exit opportunities are everywhere, you need to work on them. Yes agreed Middle East will hire Western Experience handson, but so with Europe if you have Goldman or Stanley on your resume. Also the trend is folks start in the 1st world and move to middle east to be closer to families and enjoy better living standards, eventually moving back to India, Pakistan etc.
      Rarely Ive seen it work the other way around but having middle eastern experience is good if you wanna move back to Pakistan.

      Micromanagement depends largely on the division as well, backroom supports have alot of micomanagement, so does risk and compliance, but rarely front office. Also it depends on the manager as well. If you do what is required, no body mico manages you. But yea if you slack then I will stand right behind your shoulder.

  6. Themb says

    Infographic Latin America, please?

    Good article though, interesting to learn that most recruiting is often done via London.

  7. Nick says

    Minor detail: the graphic next to France’s income tax rate should be filled to 75%, not the 45% from above and below.

  8. R says

    Hello Brian,
    I’d like to comment on Saudi Arabia. I’m Saudi, and I just finished my coop at one the international bulge bracket banks located in the Riyadh. Most foreigners do not gain that much money. At the department I worked in only two of them made those specific amount, only because they had extraordinary experiences and they were Ivy League grads. Throughout the past few years, large efforts from the government have started to encourage all the companies (even international military companies) to employ Saudi’s, it didn’t stop at that; they started to obligate a certain percentage of the employees to be Saudi’s. Ever since these efforts(or campaign) have started almost every company only employs Saudi’s for entry level jobs, not only that; they need a really good reason to employ a foreigner for a specific job.

    Most foreigners that work in Saudi Arabia nowadays have extraordinary technical skills. A lot of managements are forcing these foreigners(indirectly) to teach the Saudi’s that work with/besides/underneath these foreigners for a certain amount of time until his/her contract ends. It is cheaper to employ Saudi’s(We get less allowances), and better for the local economy, not to mention great government support for companies with a high percentage of Saudi employees.

    I close friend of mine who worked in SAMBA corporate management. While he was interviewed(before he started) they were impressed, so they promised him to be Head of Corporate Finance after the first two years, so they’ll renew his contract for that position. The current Head of department was Indian, he felt that he wont last long so he only gave my friend secretary tasks. He got another offer from Aljazeera bank (largest market share in brokerage services) and went there. Anyways long story short, when he accepted the other offer SAMBA asked him why he was leaving, he told them and the Indian got fired a short time after.

    From personal experience, I’d advise any Western/European to apply to Dubai. You’ll find a more suitable lifestyle(depending on what your into). Also, don’t focus much on M&A/PE/hedge funds, the market is nearly dead not to mention too much regulations on hedge funds and trading. Focus more on Project Financing, or corporate finance, that’s where the really money is.

    Thanks for the great post.

    • says

      Thanks for adding all that. I agree that that Dubai is a better bet for most foreigners than Saudi Arabia – the points on there mostly come from an interview we did with someone from Europe who transferred to Riyadh. But yes, he definitely went the top school route and that’s a big part of getting hired and paid there.

  9. Sofi says

    I’d love to hear about finance opportunities in Israel. Maybe I’m wrong, but I think working in finance in the Middle East (i.e., Saudi Arabia) might be a little trickier for Jewish females outside of Israel, LOL.

    • says

      Israel is on the list. I think it is more VC/investment-focused there, though some banks do have a presence and/or partner with local firms.

      I actually don’t know if religion would be an issue in places like Dubai. More of a problem in Saudi Arabia most likely (well, that and being female there in general). But someone can correct me if I’m wrong on any of this.

      • Zee says

        Religion huge problem in Saudi Arabia.
        Dubai is very multi-cultural. It is on track to become the next NYC, only in terms of multi culture.
        However you how it goes When in Rome do as Romans do!
        Just try and not bring too much attention to yourself. I guess. Goodluck with your move.

  10. soodas says

    Great article, thanks Brian! I might have missed this, but what do the exit opportunities look like into B-school? I would assume international experience will be looked at favorably.

    • says

      Yes, it helps. I don’t think most business schools would be familiar with the downsides of working in the Middle East (easier technical work etc.), so as long as you can spin it into a good story working abroad always helps you.

  11. jimmy says

    These are salaries without bonuses?

    what associate is getting 150k to 250k in base salary alone? that’s like a 500k payday all-in. way too high for associates in this market.

  12. Phi says

    Hi Brian,

    Amazing work. I have a quick question. I am a recent graduate and have been trying to apply for jobs in UAE. But the problem is: either they want a lot of experience or they want an Emirati (i.e. local). There doesn’t seem to be much entry level or graduate opportunities. Any advice? Thank you.

    • M&I - Nicole says

      I am not 100% sure but I’d focus on foreign firms in UAE which conducts businesses in EMEA/globally. If you haven’t already set up some informational interviews and flew down to EMEA, I would do so as soon as possible.

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