Japan takes the top spot in Asia in a global survey that measures expatriates' net take-home pay, with South Korea coming in second and Hong Kong a surprise number 10.
According to the 2011 survey conducted by global consulting firm ECA International, an expatriate middle manager in Japan takes home on average $98,000 a year after paying taxes. This compares to $80,000 in Hong Kong. As a result, businesses are less likely to relocate employees to Japan, according to Lee Quane, ECA's Regional Director Asia.
"The high cost of employing expatriates in Japan may partly explain why fewer companies assign staff to Tokyo versus Hong Kong and Shanghai," Lee said in the report.
Though Hong Kong is known as Asia's top financial hub that attracts major international companies and highly qualified employees, the survey ranks the city 10th in Asia, behind Taiwan, Laos, Bangladesh and Cambodia.
The bottom three positions went to China, India and Vietnam.
According to Lee, in Laos for example, which comes in at number four, "companies typically provide location allowances in order to attract employees to accept assignments."
Hardship ratings also affect the level of salaries in countries like Laos and Bangladesh, he said.
Though salaries may be lagging in Hong Kong, expatriates get the best benefits, which are usually worth more than the take-home pay, according to the survey.
"In Hong Kong, the limited availability of accommodation for expatriates and international school places is putting pressure on companies who cover these costs," Lee said.
If benefits are factored into an expatriate package, Hong Kong comes in second after Japan and ahead of Singapore.