How Europe is making the Middle East attractive again

While the flow of Western bankers has largely been out of the Middle East over the last year, a combination of hiked up income tax in the UK and potentially prohibitive bonus clampdowns in Europe are tempting many to return.

The Gulf is no longer the mecca for Western investment bankers that it was considered to be in 2008, with widespread redundancies in the sector leading many to scuttle home with their tails between their legs.

But light-touch regulation, combined with a tax-free income, is beginning to look very tempting to bankers in the UK and Europe. City financiers are now subject to a 50% top rate of income tax, while the European Union has imposed tough new bonus laws.

"We haven't seen a huge influx of CVs from people in Europe looking to work in the region for the first time," says Peter Greaves, director, head of financial markets at headhunters McArthur Murray in Dubai. "But bankers who lost their jobs in the Gulf during the financial crisis and were forced to go home are looking to come back again. I think those without Middle East experience still view the region as a bit of a risk."

There's also the possibility that some big name bankers will be making the move to the Middle East internally, says Matthew Lewis, director Middle East and Africa at Boyden.

"Individuals within international investment banks are putting pressure on their employer for an internal transfer to a more tax friendly environment, and we're expecting more moves to the region this way," he says. "We're also seeing people who lose their jobs here either staying to look for another position, or looking to Asia rather than a move back to Europe."

There's been some evidence of this in recent months. Citigroup transferred Mike Pendill from New York to Dubai in May to head its global subsidiaries group having previously moved Atiq ur Rehman from London to lead its Middle East division in January. Credit Suisse also transferred Erwin Van Der Voort from London to head up its M&A team in the region, following the departure of Anthony Armstrong.

While we've seen some evidence of investment banks hiring in the region this year, recruiters remain confident that activity is on the up again, which could sway more Western bankers to the Gulf.

"Month on month we're seeing more and more hiring activity this year," says Hasnain Qazi, Middle East business manager at Pathway Resourcing. "Recruitment activity is focused on revenue-generating roles rather than back office functions."