Five months before the Covid-19 pandemic began last year, I lost my job and had to file a case against the company for not paying my end-of-service gratuity. Unfortunately, the case was delayed by 15 months because of the pandemic and there was an unexpected decision by the judge.
I have been unable to find another job despite trying my best. My debts are piling up and I have had three court cases filed against me for non-payment – one for my car loan in Ras Al Khaimah, a criminal case in Ajman and a civil case in Dubai.
In total, I have about Dh220,000 of debt, which includes interest and late fees. Because I can’t find a job, I have been unable to make regular payments and that is why I am in this situation.
The criminal case in Ajman was closed because I paid a Dh2,000 fine. For the Dubai case, I agreed to an unrealistic settlement, which included lawyers’ fees. I made three payments towards the settlement amount, but couldn’t afford to pay it any more. The police seized my car and the bank sold it to use against the loan.
With the financial help of friends, I had to send my wife and baby daughter home. Since leaving the UAE, my daughter has become sick and is losing weight. The doctors are worried it is psychological as I am not with them.
Recently, I received a call from the bank’s legal department asking me to pay Dh4,000 within 10 days or they will restart the civil case against me.
I don’t have the money and don’t know what to do any more. I have lived here for 18 years and if I had a job, I could pay these debts and bring my wife and daughter home so we can be together again. What options do I have? Is bankruptcy a possibility or something you would advise against? LH, Dubai
Debt panellist 1: Hazem Balbaa, associate at BSA Ahmad Bin Hezeem & Associates
Given the country’s great interest in protecting creditors’ rights, the UAE recently amended the Insolvency Law. The Insolvency Law only applies to individuals, while the Bankruptcy Law applies to companies and establishments.
The Insolvency Law provides debtors two options to assist them in settling their outstanding debts.
The first option is for the debtor to submit to the court a request to open settlement proceedings to settle the outstanding amounts. The court will study the debtor’s request and has complete discretion to either accept or reject the request.
If the court accepts the request, it will appoint an expert to study the financial status of the debtor and come up with a suitable plan to pay the debts that also has to be approved by the creditors. This route paves the way to a moratorium on actions by creditors applying to seize any of the debtor’s assets.
It is also in their best interest that you do not default on your debts as this could have considerable impact on their financial books.
Philip King,
head of retail banking at Abu Dhabi Islamic Bank
The second option is for the debtor to declare they are insolvent. This route is only available if the debtor stopped paying for a period of time that exceeds 65 consecutive days and the amounts owed are greater than Dh250,000.
This route places a suspension on all legal and judicial enforcement proceedings against the debtor, as well as all criminal proceedings arising from bounced cheques.
It is also worth mentioning that liquidation will result in barring the debtor from entering into obligations and applying for new loans for three years from the date the judgment is issued.
Finally, the court can impose criminal liability on the debtor if it is satisfied that they have been negligent in their spending patterns given their financial capabilities and is intentionally harming creditors.
Debt panellist 2: Philip King, head of retail banking at Abu Dhabi Islamic Bank
This is an unfortunate situation to find yourself in. However, it is important that you remain optimistic and make all possible efforts to improve your financial circumstances.
Before you consider filing for personal bankruptcy or insolvency, I would recommend you reach out to your bank for any possibility of restructuring your debts. During this time, banks are being highly encouraged to be flexible and understanding of customers’ circumstances.
It is also in their best interest that you do not default on your debts as this could have considerable impact on their financial books.
I advise you to communicate with your bank to explain your current situation and your willingness to pay your debts as soon as you find a job. Depending on your agreement, you may be able to renegotiate the terms of your loans with reduced payments and a longer tenure. You may also ask your bank if they can offer you instalment postponements or payment holidays.
In addition, it would be worth checking if you have insurance policies against your remaining loans. Depending on the terms and conditions, the policies could cover involuntary job loss. In such a case, the insurance could support your monthly loan repayments and safeguard you from default for a predetermined period.
Declaring personal bankruptcy or insolvency should be your last resort at it could have long-term negative repercussions that may further delay your journey to a better financial position.
The process is cumbersome and may result in extreme measures such as liquidation of your properties to pay off your debts. It could also be expensive as you would need the support of legal experts to tackle your case.
However, should you decide to go down that route, I advise you reach out to a legal expert who could provide pro-bono support and give you advice on the appropriate next steps.
To establish a sound financial footing, it is important you seek avenues to boost your financial resources. This involves securing a job that will help you address your debt obligations and working out a sound budgeting plan that trims down your expenditures and increases your savings and emergency buffers.
While you continue to search for new job opportunities, you could also look into freelance or part-time work to help manage your situation.
Debt panellist 3: Nathan McFarlane, founder of AskHelpWith.com
This is a nightmare of a situation to find yourself in and – from my personal experience – a very difficult one to deal with.
Your first port of call is to find some level of income and reduce all expenses to a minimum. You may feel like there is no solution and you are on your own but, rest assured, there is always a solution and you are most certainly not alone.
Your responsibility is to take action on everything you can do right now. This includes staying in communication with your creditors and ensuring that everything is in writing to show your good intent.
It is important to understand there may not be an overnight solution to your problem and coming to a resolution will take time.
By the sound of your description, your debts are below Dh200,000 if you don't include late charges and interest payments. Therefore criminal issues outside of bounced cheques are likely to be limited.
Talking to your banks to come to an arrangement to avoid further civil case issues would be sensible. For smaller amounts, civil cases are less likely but be aware that all creditors have the ability to file if they see fit.
Have you also considered a job in your home country? Providing there are no outstanding legal cases or travel bans, you can still pay your debts from your home country and then return to the UAE when you are more financially stable.
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
Mercer, the investment consulting arm of US services company Marsh & McLennan, expects its wealth division to at least double its assets under management (AUM) in the Middle East as wealth in the region continues to grow despite economic headwinds, a company official said.
Mercer Wealth, which globally has $160 billion in AUM, plans to boost its AUM in the region to $2-$3bn in the next 2-3 years from the present $1bn, said Yasir AbuShaban, a Dubai-based principal with Mercer Wealth.
“Within the next two to three years, we are looking at reaching $2 to $3 billion as a conservative estimate and we do see an opportunity to do so,” said Mr AbuShaban.
Mercer does not directly make investments, but allocates clients’ money they have discretion to, to professional asset managers. They also provide advice to clients.
“We have buying power. We can negotiate on their (client’s) behalf with asset managers to provide them lower fees than they otherwise would have to get on their own,” he added.
Mercer Wealth’s clients include sovereign wealth funds, family offices, and insurance companies among others.
From its office in Dubai, Mercer also looks after Africa, India and Turkey, where they also see opportunity for growth.
Wealth creation in Middle East and Africa (MEA) grew 8.5 per cent to $8.1 trillion last year from $7.5tn in 2015, higher than last year’s global average of 6 per cent and the second-highest growth in a region after Asia-Pacific which grew 9.9 per cent, according to consultancy Boston Consulting Group (BCG). In the region, where wealth grew just 1.9 per cent in 2015 compared with 2014, a pickup in oil prices has helped in wealth generation.
BCG is forecasting MEA wealth will rise to $12tn by 2021, growing at an annual average of 8 per cent.
Drivers of wealth generation in the region will be split evenly between new wealth creation and growth of performance of existing assets, according to BCG.
Another general trend in the region is clients’ looking for a comprehensive approach to investing, according to Mr AbuShaban.
“Institutional investors or some of the families are seeing a slowdown in the available capital they have to invest and in that sense they are looking at optimizing the way they manage their portfolios and making sure they are not investing haphazardly and different parts of their investment are working together,” said Mr AbuShaban.
Some clients also have a higher appetite for risk, given the low interest-rate environment that does not provide enough yield for some institutional investors. These clients are keen to invest in illiquid assets, such as private equity and infrastructure.
“What we have seen is a desire for higher returns in what has been a low-return environment specifically in various fixed income or bonds,” he said.
“In this environment, we have seen a de facto increase in the risk that clients are taking in things like illiquid investments, private equity investments, infrastructure and private debt, those kind of investments were higher illiquidity results in incrementally higher returns.”
The Abu Dhabi Investment Authority, one of the largest sovereign wealth funds, said in its 2016 report that has gradually increased its exposure in direct private equity and private credit transactions, mainly in Asian markets and especially in China and India. The authority’s private equity department focused on structured equities owing to “their defensive characteristics.”
ETFs explained
Exhchange traded funds are bought and sold like shares, but operate as index-tracking funds, passively following their chosen indices, such as the S&P 500, FTSE 100 and the FTSE All World, plus a vast range of smaller exchanges and commodities, such as gold, silver, copper sugar, coffee and oil.
ETFs have zero upfront fees and annual charges as low as 0.07 per cent a year, which means you get to keep more of your returns, as actively managed funds can charge as much as 1.5 per cent a year.
There are thousands to choose from, with the five biggest providers BlackRock’s iShares range, Vanguard, State Street Global Advisors SPDR ETFs, Deutsche Bank AWM X-trackers and Invesco PowerShares.
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
The Settlers
Director: Louis Theroux
Starring: Daniella Weiss, Ari Abramowitz
Rating: 5/5
Bundesliga fixtures
Saturday, May 16 (kick-offs UAE time)
Borussia Dortmund v Schalke (4.30pm)
RB Leipzig v Freiburg (4.30pm)
Hoffenheim v Hertha Berlin (4.30pm)
Fortuna Dusseldorf v Paderborn (4.30pm)
Augsburg v Wolfsburg (4.30pm)
Eintracht Frankfurt v Borussia Monchengladbach (7.30pm)
Sunday, May 17
Cologne v Mainz (4.30pm),
Union Berlin v Bayern Munich (7pm)
Monday, May 18
Werder Bremen v Bayer Leverkusen (9.30pm)
Arabian Gulf Cup FINAL
Al Nasr 2
(Negredo 1, Tozo 50)
Shabab Al Ahli 1
(Jaber 13)
