It is 100% true that as a British citizen living permanently in Dubai you can earn your locally sourced income 100% free of income tax. This has to be one of the best benefits of living and working in Dubai – i.e., that it is tax-free. However, your salary has to go a long way in the emirate because the cost of living is so high. From accommodation costs to schooling and health insurance fees, almost everything in Dubai seems to cost more than it did in the UK!
You need to have a residency visa in order to be able to open a bank account locally, and without a local bank account you will not be able to get accommodation, a mobile phone, purchase a car on finance etc. Therefore opening a local account will be a priority.
There are many banks to choose from, and if you ask expats on the ground in Dubai, they say they are all as bad as each other. Whilst you will see international names such as HSBC and Barclays, Citibank and Lloyds, they are Dubai versions of these banks! I.e., they don’t seem to abide by the international standards of service that you might expect from such leading names in the banking industry.
Choose your bank carefully – you may want to use the same one as your employer so that salary payments are made quickly and you will perhaps receive an introduction and even preferential rates of exchange for example.
Alternatively you may want to choose a name you’re familiar with. You are usually expected to maintain a minimum account balance, or face charges. And some accounts expect you to pay in a minimum amount every month as well. Ensure you understand the terms you’re signing up to before you commit to a given account.
You will usually be issued a debit card and chequebook as standard, and whilst it’s not impossible to get a credit card or even a loan in Dubai, tread carefully.
Bouncing a cheque in the UAE is illegal, as is defaulting on any loan/credit agreement. Additionally, you’re often required to give post dated cheques to cover future loan repayments for example, and some expats have run into difficulties in the past because of either poor administration or corrupt banking staff.
Such problems have resulted when payments have been made and cleared but not lodged, and as a result such expats are blacklisted as having defaulted. They can be deported, jailed or refused re-entry if they leave Dubai and attempt to return.
If you want a credit card from your bank you’re sometimes asked to leave a blank cheque with them as security too – something that doesn’t sit comfortably with many expats who use an international credit card from their offshore bank account, or which they have already acquired from their home country.
As you can see, when it comes to money matters in Dubai it’s best to avoid all forms of debt if you can, and consider how and where you bank, save and invest carefully. Most expats repatriate their wealth back home or retain it offshore.
In terms of opening an account locally, some expats have found that they can open an account at HSBC or the National Bank of Abu Dhabi before they have their residency visa in place – but this is not the norm. You will need to take your passport plus a copy of it, another form of ID such as your driving license plus a copy of it, and your salary certification (not always required), in order to open a bank account in Dubai.