Expats will find banking in the UAE to be simple, sophisticated and reasonably familiar. That said, as is the case with any foreign destination, there are a few quirks to take into account and practices to avoid debt and maximise the tax-free liberties that come with living in the country.
Money in the UAE
The dirham is the local currency in the United Arab Emirates and is abbreviated as AED. It is sometimes also written as DH or Dhs. One dirham is divided into 100 fils.
The dirham is available in the following denominations:
Notes: 1,000 AED, 500 AED, 200 AED, 100 AED, 50 AED, 20 AED, 10 AED and 5 AED
Coins: 1 AED and 50, 25, 10 and 5 fils
Banking in the UAE
The UAE’s banking system is sophisticated, with plenty of local and international options.
Many foreigners choose a brand that they recognise from their home country, especially if they already have an account opened with that particular institution. Expats shouldn’t immediately discount local options; though service levels are rarely consistent, most banks are accustomed to catering to the large foreign community and there is usually no language barrier to speak of.
Some banks, such as HSBC and Barclays, offer offshore accounts so that expats can save their hard-earned wages outside the UAE. These are worth considering, as in the case of death, the government has the right to freeze an expat's account until their estate and debts are settled; a foreigner's home country will is not valid in Abu Dhabi.
Banks generally keep hours from 8am to 2pm, and are closed on Fridays. Branches in large malls may stay open later. Internet banking facilities, some better than others, are commonplace.
Opening a bank account
Opening a bank account in the UAE is a fairly painless process once expats have their residence visa. Expats will need to show proof of their visa, as well as provide their passport, proof of address and a no-objection letter from their employer in order to open a bank account in the UAE.
Fees and service offerings differ between the various banks. Current accounts, debit and credit cards, savings accounts and car loans are standard fare, with some banks also offering preferential banking, depending on a person’s salary level.
For Muslim expatriates and locals, all UAE banks offer Sharia-based accounts in accordance with Islamic laws and banking principles. These accounts earn no interest and have somewhat complicated arrangements for mortgages and loans.
One aspect of banking in the UAE that expats may find frustrating is the fact that many transactions can only be done in person at the branch, so expats should be sure to choose a bank that is convenient to their lifestyle. High fees for doing electronic transfers mean most people stick to cheques, cash and credit cards for making payments to a third party.
Cheques are still widely accepted in the UAE. Expats can issue a cheque for pretty much anything, but beware that if it bounces the penalty can include jail and a fine. Post-dated cheques are popular and are the primary method used for buying a car and paying annual rent, as debit orders are not common in the UAE.
ATMs and credit cards
ATMs are widely available in the UAE and there is no charge for drawing cash from a different bank’s machine.
Most banks also have cheque and cash deposit machines available 24 hours a day, seven days a week. Internet banking facilities are also available, though in some cases, they can be rather unsophisticated.
Credit cards normally attract high interest charges. Some expats do run into trouble living beyond their means in the UAE, so it’s important to remain disciplined.
Taxes in the UAE
As most expats know, a huge advantage of working in the UAE is that there is no taxation on expat income, nor is there GST. However, as of 2018, there is a five percent VAT.
There is tax attached to drinks and meals in restaurants that serve alcohol, but these additions are minimal.
Some expats may be liable for tax in their home country, although the amount varies and relates to how long one spends outside of the country, and whether they 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.
►See Doing Business in the UAE for info on work and business etiquette in the country.
Are you an expat living in United Arab Emirates?
Expat Arrivals is looking for locals to contribute to this guide, and answer forum questions from others planning their move to United Arab Emirates. Please contact us if you'd like to contribute.
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