Abu Dhabi certainly has its benefits as a place to live, but most expatriates are drawn to the capital for the soul reason of being able to earn a good tax-free salary so they can build a healthy nest egg to take back home. Unfortunately, many new arrivals don’t realise just how easy it is for all that money to slip away. But, if you play your cards right, you can really make your time in Abu Dhabi work for you and your future.
Opening a bank account
Once you have your residence visa, opening a bank account is easy. Many banks allow you to apply online or over the phone, although you’ll need to appear in person to provide your original passport, plus copies of your passport photo and visa pages. You’ll also need to provide a letter of no objection from your sponsor, and you may need a salary certificate, depending on which bank you choose. The charges for various types of accounts differ widely depending on the type of account you want and what your minimum balance is likely to be. Monthly and yearly charges will usually apply as well.
Choosing a bank
There are plenty of banks around with a huge assortment of options. We’ve listed the basics of several standard current accounts here, but each bank offers several different types of accounts, all with unique benefits. You may want to check out those options more carefully before making your final decision.
Financial advisers
While all of the banks listed in the table provide savings plans, if you want to get serious about making the most of your income, it’s worth meeting with a financial adviser. A good one will assess both your assets and your spending and make a recommendation for the best ways for you to go about making your money work for you by setting up off-shore accounts, wills, life insurance, and the like. Some, such as Globaleye, even provide mortgages and can help you get the best exchange rate on money you send overseas.
Spending and saving
A remarkable number of expats come to Abu Dhabi with the best financial intentions only to find themselves, a few years down the road, in debt and with very little to show fiscally for their time spent here. The cost of living in the capital varies depending on the product in question: petrol is about the cheapest here than anywhere in the world, but rents (though on the way down) are still comparable to Manhattan. Big Macs and bottled water cost less here than just about anywhere else, but a fast internet connection won’t be as cheap. The bottom line is that if you continue to spend the same way here as you would at home and save the surplus, you can potentially leave Abu Dhabi with a sizeable fund for the future. It won’t be the necessities that cut into your savings scheme, it’s the luxuries that trip up most expats. Because babysitters and restaurants generally cost much less here than at home, for example, it’s easy to fall into the habit of eating out every night.
A giant villa is obviously more comfortable than a high-rise flat, but between rent and utilities, you’ll probably end up paying a sizeable chunk of your income for it. In other words, if your priority is to live a comfortable lifestyle while you’re here, you can, but if you’re goal is to save money, pay close attention to how much you spend on those indulgences you would be content to live without if you were at home.
Credit cards, cheques, and loans
It’s relatively easy to borrow money in the UAE. Most banks offer competitively priced credit cards, and once you’ve proven that you’re reliable and have a secure income, you may find the company with which you do business is more than happy to thrust additional credit upon you. Many even offer perks such as air miles or frequent flyer points that you can use on major airlines, points that can really add up over time.
There are few circumstances in which you’ll need to write cheques, but just about all the major bank accounts offer a chequing option. If you’d rather not hassle with a cheque book, your bank can provide you with individual cheques on those rare occasions when you need them, but it will cost a small fee. If you happen to bounce a cheque, your bank is likely to consider the incident an oversight and simply charge you a fee to cover the cost. The fact, however, is that if you give someone a promissory note that your account can’t cover, you’re essentially stealing so, in some cases, your bank may take more drastic measures to discourage you from writing bad cheques. Loans are also generally quite easy to get, especially if you’ve arranged to have your salary deposited directly into your bank account each month. Because banks earn their income from charging you interest on credit cards and loans, most banks are willing to take a chance on customers who seem trustworthy. They may also make it very easy for you to borrow more money by ‘topping up’ an existing loan.
Defaulting debt
Unfortunately for expatriates as a group, there have been some unscrupulous expats who have misused this trust by taking out large loans and absconding. In many Western countries like the US, the UK, and Australia, one central agency monitors each person’s individual credit history, but there is currently no such system in place in the UAE. In the past, there was often little the local banks could do to pursue the culprits other than take greater precautions in loaning to other expats still living in the country.
These days, however, major banks will follow debtors to their home countries. Using the internet UAE-based collection agencies can hunt down thieves and use legal means to try to recover loans that have not been paid. In some cases, if the collection agency is unable to track down someone who owes them money from the UAE, they will sell the loan to an agency in the offender’s home country, one with the full force of that government behind it. So if you’re thinking of borrowing money and skipping the country, don’t.
