Moving to a new country can feel like a daunting task with so many costs to keep in mind, from sorting a visa, finding a property to rent, getting a driving licence, deciding to buy or rent a car and so on.
If you are a family with children, add nursery or school fees to the overall estimated costs.
Steve Cronin, the founder of DeadSimpleSaving.com, says you will have a “flood of expenses” in your first couple of months and it may take longer than expected to set up a bank account, so ensure you have plenty of cash, both in the UAE and in your home country.
Rasheda Khatun Khan, financial wellness expert and author of Millionaire Mindset – 6 Steps To A Wealthy Life, advises new arrivals to be “conscious spenders” and live “mindfully”.
“Don’t fall into the trap of keeping up with the Joneses,” she says. “A few years later, you are the Joneses.”
This comprehensive guide will offer you a better understanding of the key living expenses in the UAE that will affect your finances.
What is the visa process and how much does it cost?
The work visa process starts with a two-month permit being issued, giving the employer time to organise medical tests, an Emirates ID card and labour card. The processing costs will be paid by your employer.
There are minimum salaries required to be able to sponsor dependents.
Once a UAE resident, the employee can sponsor family members if earning a minimum of Dh4,000 ($1,089) a month, or Dh3,000 and housing, according to the official government website.
The employer must pay for the individual’s residency visa and identity card but if they bring a family, they will need to be sponsored, said Keren Bobker, independent financial adviser and senior partner with Holborn Assets.
“Few employers will pay for dependents, so the cost of visas and identity card [for the family members] will fall on the individual,” she says.
“If they have an Abu Dhabi visa, the employer must provide medical insurance for the employee and their family [spouse and up to three children] but if someone has a Dubai visa, they must arrange medical insurance for all dependents, unless they have their own via employment. Cover is not mandatory in the other five emirates but is still advisable.”
The cost for a residency visa and identity card for a sponsored family member, including medical tests and biometrics, starts at about Dh2,500, Ms Bobker says.
This varies depending on their visa status and whether they are already in the UAE. The cost of medical insurance varies hugely depending on scope of cover (UAE only, regional, international), the level of cover, the age of the individual and their medical history, she says.
One of the conditions for issuing a residence visa is that all family members over the age of 18 must undergo a medical fitness examination.
Generally, employees are issued residency for one or two years and family members for the same length of time.
For children, UAE law allows them to be sponsored by the father only until they reach the age of 25. An expatriate man can sponsor his daughters if they are unmarried, regardless of age.
A foreigner can sponsor his parents for a full year, subject to renewal, with the payment of insurance as a guarantee for both of them.
For the husband to be able to provide a residence visa for his wife in the UAE, he must, among other things, present the marriage contract attested in Arabic or translated into Arabic by a sworn translator, and approved.
“In Dubai, a woman must have a minimum salary of Dh4,000 or Dh3,500 if they have accommodation provided by their employer to sponsor a child. To sponsor a husband, the usual minimum is a salary of Dh10,000 per month,” Ms Bobker says.
“There is a security deposit of Dh2,500 for each child plus fees in the region of Dh1,800. The fees vary depending on whether the child is already in the UAE and their current visa status.”
The rules can be a little stricter in Abu Dhabi, but, these days, it is usually possible for a woman to sponsor a non-working husband provided she is in a professional role, she says.
Official guidance states that she should be an engineer, teacher, doctor, nurse or other medical professional with a monthly income of at least Dh10,000 or Dh8,000 plus housing, but other professionals can make individual applications. A good public relations officer is helpful, Ms Bobker says.
The UAE, the Arab world’s second-largest economy, has made several changes to its visa residency system to attract global talent.
In 2019, amendments were introduced to the golden visa initiative to simplify the eligibility criteria and expand the categories of beneficiaries.
The 10-year visa is granted to investors, entrepreneurs, skilled professionals who earn a monthly salary of more than Dh30,000, exceptional talent, scientists and professionals, outstanding students and graduates, property investors, humanitarian pioneers and front-line heroes.
A green visa provides a five-year residency for skilled employees without the need for a sponsor or employer. The minimum educational level is a bachelor’s degree or equivalent and the salary should not be less than Dh15,000.
The UAE also introduced a one-year digital nomad visa in March 2021 that allows people to live in the Emirates for up to one year while working for employers in their home countries.
Those interested can apply if they can provide proof of employment with a contract valid for one year from their current employer, earn a minimum salary of Dh18,362 per month and provide the salary slip for the last month and bank statements for the preceding three months, says immigration specialist Fragomen. Additionally, they must have a passport with a validity of a minimum of six months and valid health insurance covering their residency in the UAE.
For foreigners interested in working in Abu Dhabi, the minimum salary threshold for a remote work visa is Dh12,850 per month, Fragomen's website says.
Dubai also introduced a retiree visa in 2020, which allows retired residents and citizens from around the world to live in the emirate if they fulfil one of three requirements: earn a monthly income of Dh20,000, have Dh1 million in cash savings or own a property in Dubai worth at least Dh2 million.
A retired expatriate and their spouse can apply for the five-year visa with the possibility of automatic renewal online, provided they continue to meet the criteria. Eligible applicants must be older than 55 and have valid UAE health insurance.
How much is rent?
Rent is the number one expense in the UAE and will take a good chunk out of your salary, even with an accommodation allowance.
Rents typically eat up around 25 per cent or more of the monthly income, according to Vijay Valecha, chief investment officer at Century Financial.
“With the Dubai real estate market now witnessing significant interest from abroad, the local rental markets have seen a spike in annual leases,” he says.
“As per the latest market estimates, for the end of 2023, the broader Dubai residential markets would likely see a rent increase in the range of 25 per cent. While the old settlement areas in Bur Dubai and Deira continue to offer some affordable renting options, the previous facilities, including chiller-free and extra grace months for living, are no longer available.”
A cheaper option for a new expat looking to live in Dubai is a smaller studio, Mr Valecha suggests.
However, when compared with other major expat destinations like Singapore, London and New York, rents in Dubai are still affordable in the absence of any personal income tax or investment tax, he says.
Standard rental contracts require a deposit of around 5 per cent of the rent amount, which is returned at the end of the tenancy, Ms Bobker says.
“A few landlords still want a year’s rent in advance but that is far less common than in the past and it can often be paid quarterly, with a few landlords permitting monthly payments,” she says.
“Expect to pay some rent in advance. Another cost is the estate agent’s fee, which is usually paid by the tenant and can be as much as 5 per cent.
In Dubai, according to property company Asteco’s first-quarter numbers, expect to pay in the range of: Dh65,000 to Dh130,000 a year in Dubai Marina for a one-bed apartment; Dh90,000 to Dh185,000 for a two-bed; Dh40,000 to Dh55,000 and Dh57,500 to Dh70,000, respectively, in the affordable Discovery Gardens; and Dh75,000 to Dh140,000 and Dh110,000 to Dh200,000, respectively, in Downtown Dubai.
A three-bed villa in the Arabian Ranches can be rented for between Dh170,000 and Dh310,000 a year, while a similar property in The Meadows costs between Dh260,000 and Dh360,000.
In Abu Dhabi, a one-bedroom apartment in Saadiyat Beach costs between Dh70,000 and Dh80,000 a year and a two-bed between Dh112,000 and Dh140,000. In the mid-end Khalifa City and Mohammed Bin Zayed City areas, a one-bedroom can be rented for between Dh32,000 and Dh42,000. The rent for a three-bedroom villa in Saadiyat Beach ranges between Dh290,000 and Dh320,00, while a similar villa in Khalifa City can be rented for between Dh105,000 and Dh115,000.
To rent, you need a copy of your passport, residence visa and Emirates ID, says Abdul Moboshir, leasing consultant at Betterhomes.
“The agency fee is 5 per cent if the rent is above Dh100,000 or Dh5,000 plus VAT if the rent is less than Dh100,000,” he says.
“The security deposit is 5 per cent for unfurnished properties and 10 per cent for furnished units.”
If you are considering buying, Property Finder has an online calculator to help you decide whether it is more cost-effective to rent or own your home in the Emirates.
The other major costs include utilities, comprising electricity and water bills as well as telecoms services.
“On average, depending on where you live and the telecoms payment plan, these costs account for at least 6 per cent to 8 per cent plus of the monthly income,” Mr Valecha says.
“At a combined level, rent and utilities would account for 30 per cent or more of the monthly income.”
Three in-demand Dubai communities in 2023 – in pictures
Utility companies require a small deposit. To activate your electricity and water account, you must pay a connection fee – Dh130 for Dubai Electricity and Water Authority (Dewa), for example – and a security deposit of Dh2,000 for an apartment or Dh4,000 for a villa. The deposit is refunded after settlement of the final bill when moving out.
In Abu Dhabi, the Abu Dhabi Distribution Company requests a security deposit of Dh1,000. Expect similar payments in other emirates, Ms Bobker says.
Bills will include a municipality fee spread over the year. This is equivalent to 5 per cent of the rent payable in Dubai and Abu Dhabi and 4 per cent in Sharjah, she adds.
Registering a tenancy contract with Ejari in Dubai costs Dh267.50 and is required before you can register for utilities. The documents required include an original signed tenancy contract, the tenant’s Emirates ID, and passport and visa copies, a copy of the landlord’s passport, and a copy of the title deed provided by the landlord.
In Abu Dhabi, it is the responsibility of the landlord or property management companies to register the tenancy contract with Tawtheeq. The fee to register a leasable property in the Tawtheeq system for the first time is Dh1,000 per property, payable by the landlord. There is also a leasable unit registration fee of AED 5. For a new tenancy contract, the registration fees are Dh100, payable by the landlord.
The registered Tawtheeq contract is required to connect your electricity and water with the Abu Dhabi Distribution Company; other property transactions and utility services also require Tawtheeq registration to proceed.
“Another major cost category for new arrivals relates to the ones required for running a household on a daily basis. This includes the cost incurred for hiring a domestic cook and cleaner for cooking and cleaning purposes, along with grocery bills and other ad hoc chores,” Mr Valecha says.
“The percentage incurred here is very subjective since it depends on the individual family requirements and the number of members in the household. The cost percentage incurred here would be in the range of 15 per cent.”
ServiceMarket.com, an online marketplace for international and local moving services, says that for those needing help getting established in their new home, a handyman costs about Dh99 an hour and a deep clean is priced at Dh470 for a two-bed apartment.
How much are school fees?
School fees tend to be a family’s biggest expense after rent.
Nursery school fees in the UAE typically range from Dh3,000 to Dh8,000 per month, depending on location and reputation, facilities and the child’s age group, says online education guide Edarabia.
School fees in the UAE can vary significantly based on the type of institution, grade level and location. On average, international school fees range from Dh35,000 to Dh120,000 per annum, with premium schools charging higher fees, Edarabia says. This does not include additional fees for admission, transportation, school uniforms and books.
For Dubai, the Knowledge and Human Development Authority has a comprehensive listing with a fact sheet for of all the 224 private schools, which includes international schools, says Rema Menon, director of Counselling Point Training & Development, an academic counselling centre.
“Since it is open source, it is accessible to all and can prove to be an invaluable resource to all new expats,” she adds.
“They can also learn about the ranking of schools in Dubai through the KHDA website.”
A similar listing of school rankings and fees is available on the Abu Dhabi Department of Education and Knowledge website.
All private schools in Sharjah come under the umbrella of Sharjah Private Education Authority, Ms Menon says.
For more details on academic institutions in Ras Al Khaimah, new expats can check the government's website.
“As for universities, we have federal government institutions and private institutions. The fees can vary greatly with location, affiliation and programme and can range from Dh24,000 to the highest being Dh301,240 annually at NYUAD,” she says.
“It is important for newcomers to know that the UAE offers a wide range of higher educational institutions to choose from. These institutions offer diplomas, degrees, postgraduate diplomas, masters and PhD qualifications from countries ranging from Australia, the US, the UK, India, Pakistan, Iran, Germany, Switzerland, France and Italy. Every year, more institutions and programmes are being added to the plethora of course offerings.”
The Ras Al Khaimah Economic Zone’s Academic Zone offers cost-effective options and students can avail of British, Indian and American-affiliated higher education options, Ms Menon says.
Institutions list their fees, which includes tuition, visas and all the related expenses on their websites.
Some institutions also provide transport and housing. Some offer scholarships based on merit and need. The amount varies with the institution, Ms Menon says.
Renting or buying a car
You can hire a car on a daily, weekly and monthly basis. The price will vary depending on the car you rent.
A small car, such as a Toyota Yaris, will cost between Dh90 and Dh100 on a daily basis and about Dh560 if you hire it for a week, says Al Barakah car rental.
A midsized car, such as a Honda Accord or a Toyota Fortuner, will cost between Dh130 and Dh150 for a day, while for a week it will cost about Dh900.
Luxury cars, such as a BMW Series 5 or an Audi 6, will cost anything between Dh500 and Dh1,000 per day. The price will vary according to the model and the features it offers.
A guide to renting a car in the UAE – in pictures
“Renting is the ideal solution for new expatriates who are in the process of settling in,” says Soham Shah, chief executive of smart mobility app Selfdrive.ae.
Firstly, the down payment required for purchasing a car is often unaffordable for many individuals and acquiring a car loan can be challenging for new expats, he says.
Secondly, as a newcomer to the country, understanding the local rules and regulations, as well as obtaining a driving licence, significantly influence the decision-making process when it comes to buying a car, he adds.
“Moreover, concerns about insurance, rules and maintenance repairs are alleviated when renting, as these aspects are managed by the rental service. By doing so, new expatriates can focus on their purpose in the country rather than dealing with the complexities and responsibilities of car ownership,” Mr Shah says.
The UAE also has a thriving second-hand car market.
For a used Lexus ES350, taking into account depreciation, service costs, fuel, Salik, cleaning and insurance, but not traffic fines or costs related to an accident, CarSwitch.com, a UAE car classifieds platform, calculates the total price of renting to be about Dh60,000; taking an Uber or Careem, Dh45,000, and owning at Dh35,000 to Dh40,000.
“This assumes you buy a car used for one to three years as you have to skip the first couple of years of depreciation, which are the steepest,” says Imad Hammad, founder of CarSwitch.
For those wanting a car that will hang on to its value after they buy it, some models fare better than others.
“Generally the high reliability SUVs [Landcruiser, Patrols] do well. I expect Teslas to start showing up in the list [eight-year warranty, no ongoing cost, very high demand] among a few other models,” Mr Hammad says.
New arrivals to the UAE also have to be mindful of other costs such as getting a driver’s licence, which can cost between Dh4,000 and Dh7,000 on average, he adds. Car registration can come up to about Dh1,500 and insurance costs between Dh2,000 and Dh3,000.
They also need to check if they have parking at their apartment and workplace.
While driving in the UAE, expatriates need to be cautious about traffic fines, Selfdrive’s Mr Shah warns.
These fines encompass traffic violations and parking infractions, and they are applicable whether you own a car or rent one. These expenses are non-negotiable and can place a significant financial burden on drivers, he adds.
Public transport costs
Public transport in the UAE is among the most affordable in the world, according to a list of travel costs in major cities.
Dubai ranked among the top 10 most affordable cities for public transport when compared with the average monthly wage, according to research by e-commerce site Picodi in March.
Dubai was among the cheapest cities and ranked ninth on the global list with a Dh350 ($95) monthly pass covering travel by bus, Metro, monorail, tram and ferry.
Dubai’s monthly travel pass costs Dh350, around 2.3 per cent of the average net wage, the research revealed.
A monthly bus pass in Sharjah costs Dh225, while in Abu Dhabi it is Dh80.