In September, I was made redundant from my job in the airline industry due to the Covid-19 pandemic. I didn’t receive an end-of-service gratuity as I’d only been with the company for one-and-a-half years, so I left the UAE immediately and returned home as I had nothing to do here.
However, in March 2019, I took out a Dh446,000 loan and was paying Dh10,800 in monthly instalments for it. I now owe Dh320,000 on the loan and because I lost my job, I have already missed two payments.
I have been in contact with my bank, but did not request a payment deferment under the Central Bank of the UAE’s Targeted Economic Support Scheme (Tess) as I am not sure when or if I will be able to get another job.
I also informed my bank that I have left the UAE. The issue, however, is that the bank is threatening to sue me because I have missed two loan repayments. While I have no means of repaying the loan at the moment, my plan is to get another job as soon as possible, which will then allow me to resume my monthly loan instalments.
If I am in another country, can the bank sue me for the remaining amount owed on the loan? And if I got another job in the UAE, would this case prevent me from returning? Finally, is it possible to pay back a debt in the UAE from another country? Please advise me on what I should do. SW, South Africa
R Sivaram, executive vice president, head of retail banking products at Emirates NBD
This is a very challenging time and the additional burden of job loss and financial pressures are indeed stressful.
I am glad that you are being financially responsible and intend to clear your outstanding dues. As a good practice, one should always try to settle all bank debts and close all lines of credit before leaving the UAE.
As a next step, I would advise that you explain your situation to the bank and make it clear that you aim to clear your loan balances. Work towards creating a repayment plan that you can service even while residing outside the UAE.
You could consider rationalising some of your personal expenses that will help you make regular repayments, as well as liquidating any personal assets to help pay off your loan sooner.
Finding employment at the earliest will also work in your favour, irrespective of location, and support your request of restructuring your loan with the bank.
Ambareen Musa, founder and chief executive of Souqalmal.com
It is understandable that you left the UAE with no potential livelihood to look forward to here. However, looking at it from the bank's perspective, it may cast doubts on your intentions as a borrower.
The fact that you did not keep the bank in the loop when you lost your job, or before leaving the country, may work against you, especially now that you have already missed two repayments. Now that the bank is threatening legal action against you, you will need to step up and negotiate a new repayment plan with the bank.
It is common practice for banks to demand full and final settlement of outstanding loans when a borrower is permanently leaving the country. In various instances, borrowers are also able to come to an arrangement with the bank to keep repaying their loan from overseas, based on proof of potential income from other sources.
But this arrangement isn't easy to secure because it isn't easy for banks in the UAE to enforce debt recovery measures when a borrower is based in another country.
This is why a borrower should be prepared for the bank to demand an immediate lump-sum settlement. If a borrower fails to meet the bank's demands, the bank can file legal charges and also request for a travel ban to be placed against them. The borrower can be detained at the airport and arrested even if they are transiting through the UAE.
Now where does that leave you? You will have to be open in all your communication with the bank, explain your financial circumstances and try to find a workable solution to repay your debt.
Since you did not receive an end-of-service gratuity, you could tap into your savings and investments or ask family members to help you with an interest-free loan to partially settle your outstanding debt in the UAE. The bank may even be willing to waive a portion of the interest or lower your settlement amount in return for a lump-sum payment.
However, if you're having trouble negotiating with the bank from overseas, you could look into hiring a legal representative who can negotiate with the bank on your behalf. A legal expert can not only reach out to your bank to negotiate a restructured repayment plan, but they can also look into how the UAE's new Insolvency Law can help you out.
The provisions under this law also cover ex-residents like yourself, who are struggling to meet their debt commitments from overseas. If you do decide to go down the insolvency route, your legal representative can petition the local civil court and commence insolvency proceedings on your behalf.
Steve Cronin, founder of DeadSimpleSaving.com
UAE law entitles you to a gratuity after one year of service, so unless you have very unusual circumstances, you should be able to claim a gratuity. You should check this with HR at your old company and you may also need to speak to a lawyer.
It seems you took out a substantial loan the moment you got your airline job and have spent all the money. This does indeed put you in a serious situation, especially if you choose to return to the UAE.
The bank can hand over your debt to debt collectors in your own country and they can make life very stressful for you. However, the debt collectors will still have to abide by the regulations in your country. If you return to the UAE, you may find yourself arrested or taken to court for the full amount of the loan. Meanwhile, penalties and interest will be building up while you do not make payments.
Your challenge is to persuade the bank to give you a deferment until you are earning again and then allow you to repay in instalments. Given the airline industry has been hit badly by the pandemic, you may struggle to find an aviation job for many months.
You should still try to contact the bank and find a solution, ideally talking to someone as senior as possible who is empowered to make decisions. It is probably too late to ask for a deferment but you can still try. Note that if you provide your current details the bank may hand this information over to debt collectors in your country. The bank may be reluctant to allow instalment payments from another country but you will have to make it clear that this is the only way they can get their money back and try to reach a compromise.
If you have loan insurance through the bank, check the terms and conditions. Often, you have to notify the insurers within a month or two of being made redundant. If the bank is refusing to provide your loan insurance details, even though you have clear evidence of paying it, then you can report them to the Consumer Protection Department of the Central Bank of the UAE.
The Debt Panel is a weekly column to help readers tackle their debts more effectively. If you have a question for the panel, write to pf@thenational.ae
Three trading apps to try
Sharad Nair recommends three investment apps for UAE residents:
- For beginners or people who want to start investing with limited capital, Mr Nair suggests eToro. “The low fees and low minimum balance requirements make the platform more accessible,” he says. “The user interface is straightforward to understand and operate, while its social element may help ease beginners into the idea of investing money by looking to a virtual community.”
- If you’re an experienced investor, and have $10,000 or more to invest, consider Saxo Bank. “Saxo Bank offers a more comprehensive trading platform with advanced features and insight for more experienced users. It offers a more personalised approach to opening and operating an account on their platform,” he says.
- Finally, StashAway could work for those who want a hands-off approach to their investing. “It removes one of the biggest challenges for novice traders: picking the securities in their portfolio,” Mr Nair says. “A goal-based approach or view towards investing can help motivate residents who may usually shy away from investment platforms.”
Ten tax points to be aware of in 2026
1. Domestic VAT refund amendments: request your refund within five years
If a business does not apply for the refund on time, they lose their credit.
2. E-invoicing in the UAE
Businesses should continue preparing for the implementation of e-invoicing in the UAE, with 2026 a preparation and transition period ahead of phased mandatory adoption.
3. More tax audits
Tax authorities are increasingly using data already available across multiple filings to identify audit risks.
4. More beneficial VAT and excise tax penalty regime
Tax disputes are expected to become more frequent and more structured, with clearer administrative objection and appeal processes. The UAE has adopted a new penalty regime for VAT and excise disputes, which now mirrors the penalty regime for corporate tax.
5. Greater emphasis on statutory audit
There is a greater need for the accuracy of financial statements. The International Financial Reporting Standards standards need to be strictly adhered to and, as a result, the quality of the audits will need to increase.
6. Further transfer pricing enforcement
Transfer pricing enforcement, which refers to the practice of establishing prices for internal transactions between related entities, is expected to broaden in scope. The UAE will shortly open the possibility to negotiate advance pricing agreements, or essentially rulings for transfer pricing purposes.
7. Limited time periods for audits
Recent amendments also introduce a default five-year limitation period for tax audits and assessments, subject to specific statutory exceptions. While the standard audit and assessment period is five years, this may be extended to up to 15 years in cases involving fraud or tax evasion.
8. Pillar 2 implementation
Many multinational groups will begin to feel the practical effect of the Domestic Minimum Top-Up Tax (DMTT), the UAE's implementation of the OECD’s global minimum tax under Pillar 2. While the rules apply for financial years starting on or after January 1, 2025, it is 2026 that marks the transition to an operational phase.
9. Reduced compliance obligations for imported goods and services
Businesses that apply the reverse-charge mechanism for VAT purposes in the UAE may benefit from reduced compliance obligations.
10. Substance and CbC reporting focus
Tax authorities are expected to continue strengthening the enforcement of economic substance and Country-by-Country (CbC) reporting frameworks. In the UAE, these regimes are increasingly being used as risk-assessment tools, providing tax authorities with a comprehensive view of multinational groups’ global footprints and enabling them to assess whether profits are aligned with real economic activity.
Contributed by Thomas Vanhee and Hend Rashwan, Aurifer
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What the law says
Micro-retirement is not a recognised concept or employment status under Federal Decree Law No. 33 of 2021 on the Regulation of Labour Relations (as amended) (UAE Labour Law). As such, it reflects a voluntary work-life balance practice, rather than a recognised legal employment category, according to Dilini Loku, senior associate for law firm Gateley Middle East.
“Some companies may offer formal sabbatical policies or career break programmes; however, beyond such arrangements, there is no automatic right or statutory entitlement to extended breaks,” she explains.
“Any leave taken beyond statutory entitlements, such as annual leave, is typically regarded as unpaid leave in accordance with Article 33 of the UAE Labour Law. While employees may legally take unpaid leave, such requests are subject to the employer’s discretion and require approval.”
If an employee resigns to pursue micro-retirement, the employment contract is terminated, and the employer is under no legal obligation to rehire the employee in the future unless specific contractual agreements are in place (such as return-to-work arrangements), which are generally uncommon, Ms Loku adds.
Living in...
This article is part of a guide on where to live in the UAE. Our reporters will profile some of the country’s most desirable districts, provide an estimate of rental prices and introduce you to some of the residents who call each area home.
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Muslim Council of Elders condemns terrorism on religious sites
The Muslim Council of Elders has strongly condemned the criminal attacks on religious sites in Britain.
It firmly rejected “acts of terrorism, which constitute a flagrant violation of the sanctity of houses of worship”.
“Attacking places of worship is a form of terrorism and extremism that threatens peace and stability within societies,” it said.
The council also warned against the rise of hate speech, racism, extremism and Islamophobia. It urged the international community to join efforts to promote tolerance and peaceful coexistence.
