Banking, Money and Taxes in Abu Dhabi

Expats will find banking in Abu Dhabi simple, and reasonably familiar. That said, as is the case with any foreign destination, there’s a few quirks to take into account and some best practice to become acquainted with to avoid debt and to maximise the tax-free liberties that come with the territory.
 

The dirham is the local currency in Abu Dhabi, and is abbreviated as either AED or Dhs. Denominations include: one thousand, five hundred, two hundred, one hundred, fifty, twenty, ten and five dirham notes. Fils, the coins or cents associated with the currency, come in denominations of one dirham, a fifty and a quarter.
 

Abu Dhabi's banking system is sophisticated, with plenty of local and international options. Both have their pros and cons, and the best choice is subject to each individual situation.

Many foreigners choose a brand that they recognise from their home country, especially if they already have an account opened with that particular institution. Still, don’t discount local options, though service levels aren't exactly exceptional, most banks are more than accustomed to catering to the large foreign community; there is no language barrier to speak of.

Some banks, like HSBC and Barclays, offer offshore accounts so that expats can save their hard-earned wage outside the UAE. These are worth considering, as in the case of death, the government has the right to freeze your account until your estate and debts are settled. Your home country will is not valid in Abu Dhabi.  
 
To open a bank account an Abu Dhabi expat needs a residence permit (or proof that the permit has been applied for), a passport, a No Objection Certificate from the employer, and a minimum amount, which varies according to the bank.

Nearly all banks offer standard accounts and features: current accounts, debit cards, credit cards and car loans. Some banks offer special services for those who fall into certain salary brackets. Muslim expats will want to investigate Sharia-based accounts, which earn no interest and adhere to Islamic law and banking principle.

Banks generally keep hours from 8am to 2pm, and are closed Fridays. Though branches in large malls may stay open later. Internet banking facilities, some better than others, are commonplace, and ATMs are widely available.

Credit cards are accepted nearly everywhere, but if you’re using an international card be aware that you’ll be charged additional fees for each transaction performed outside your home country.

One aspect of banking that expats will have to acquaint themselves with in Abu Dhabi is the post-dated cheque. High fees are attached to electronic transfers, and as a result, post-dated cheques have become the best method for financing large payments, like rent and car payments. Even day-to-day expenses can be financed with normal cheques; though, expats should be aware that bouncing a cheque is a crime in Abu Dhabi, so manage your money carefully.

For those looking to send money elsewhere in the world to those without bank accounts, there are plenty of Western Unions, and similar enterprises, located in and around the city.
 

As most expats know, a huge advantage of working in Abu Dhabi is that there is no taxation on expat income, nor is there VAT or GST.

There is, however, tax attached to drinks and meals in restaurants that serve alcohol. Though, these additions are minimal.

Depending on your nationality you may be liable for tax in your home country, although the amount varies and relates to how long you spend outside of the country, and whether you qualify for non-resident tax status.

Expats should consult a tax advisor to help with the process of filing in their home country, if necessary.