New to the UAE: banking, saving, investing and sound financial advice

From opening an account onshore and offshore to borrowing and investing your income, here's how to avoid any pitfalls

Illustration by Alvaro Sanmarti
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Choosing which financial institution to bank with is one of the first decisions people make when moving to a new city like Dubai or Abu Dhabi. Next comes how to handle your finances through borrowing, saving and investing.

In our first instalment of the two-part financial guide for new arrivals to the UAE, we looked at rent, school fees and set-up costs; now we help those making the move to find a bank, look at credit facilities, investing and finding the right financial advice.

Choosing a bank in the UAE

There is an array of banking options in the UAE, both international and local, with personal finance experts recommending using a financial comparison site to check eligibility criteria, interest rates, fees and charges for bank accounts, loans and credit cards.

Ambareen Musa, founder and chief executive of comparison platform, says new arrivals to the UAE should also read up on Islamic banking terms such as profit rates, as all residents - Muslim and non-Muslim alike - have access to both conventional and Islamic banking products.

Ms Musa also recommends comparing remittance services if you intend to send money home, and keeping your home bank account active, although you may need to convert it to a non-resident account to allow inward remittances.

Ask friends and colleagues who they bank with, says Steve Cronin, the founder of, and choose a bigger, local bank or a major international bank to "reduce the risk of banking problems". You may also want to consider having accounts with two different banks in case one freezes your account when you later switch jobs, he says.

If you already have an account with a bank offshore, picking the same bank in the UAE will make transfers faster, says wealth and wellness planner Rasheda Khatun Khan. She also advises signing up with the financial institution your employer banks with - it will help if you later need to borrow money.

Opening a current account in the UAE

Opening that all-important current account is key to get your life financially started in the Emirates. HSBC will set up an account for customers before they arrive “to make their transition as smooth as possible”, says Marwan Hadi, head of retail banking and wealth management for the UAE.

Non-checking accounts - without a chequebook - are set up for new customers whose residency is in progress: a personal banking current account for salaries under Dh15,000 per month, Advance for Dh15,000-Dh49,999 and Premier for higher salaries. Mr Hadi says it is a “10-minute account opening journey” with a debit card delivered within 24 hours. “Full account benefits”, including a chequebook, are added after the bank receives a copy of the customer’s Emirates ID.

Emirates NBD’s Suvo Sarkar, senior executive vice president, head of retail banking and wealth management, says the bank works with “select” employers on a pilot for new-to-UAE payroll customers to open a current account on their first day of employment, even before their residence visa is processed.

CBI’s head of retail banking products, Upendra Balchandani, says a full checking account with a chequebook requires account-holders to be UAE residents but the bank can open a savings account for non-residents with a debit card and internet and mobile banking.

Credit cards and loans in the UAE

Debt is “readily available” for those that want it, says Stuart Ritchie, director of financial planning at AES International, with “a number” of banks and financial institutions “happy to lend”. “It is important that debt is managed and used as part of a well-considered strategy,” he warns.

Customers can apply for a credit card or loan “once they have an Emirates ID in hand”, says HSBC’s Mr Hadi. The first month's salary payment needs to have been banked to apply for a personal loan, but customers looking for a car or home loan can apply before then, he says. Emirates NBD customers can apply for a credit card, personal or car loan as soon as their first salary is banked.

CBI has a “unique” credit card programme allowing new UAE arrivals to apply immediately upon arrival for a credit card, says Mr Balchandani; however, an Emirates ID and visa are still required before a card can be approved. A minimum length of service of six months is required for loan or mortgage applications.

Ms Khatun Khan warns securing a loan to pay the rent is a “common pitfall” for new arrivals who then get into a “cycle of debt”. Rent is a really big outlay, she says, so some borrow to cover it – but the loan takes two years to pay off so next time the rent is due, “you’re short again”.

Offshore banking from the UAE

Follow the “ABC rule of expat banking”, says Sam Instone, chief executive of financial advisory AES International. “If you are from country A and you live in country B, you should bank in country C.” An offshore account protects accrued capital, offers services designed for expatriates, acts as a “perfect platform” for wealth management and gives peace of mind, he says.

HSBC's expat offshore banking services are “built around expats’ international lifestyle”, says the bank’s Mr Hadi, and offer currency accounts and foreign exchange services to “make it easier to move money around the world.

“There’s no need to keep more than three to six months of expenses in a UAE bank account,” says Mr Cronin. “Everything else should be moved offshore.” Major international banks provide offshore bank accounts that can be linked to your UAE account, he says, but they may require $50,000 or more. An alternative he suggests is investing in property or stock and bond exchange-traded funds, via an offshore broker.

Credit scoring in the UAE

The Al Etihad Credit Bureau is in force in the UAE, awarding credit scores for all residents. For new arrivals, however, banks tend to fall back on traditional methods for new arrivals.

Mr Hadi says HSBC assess creditworthiness based on the bank’s own score cards and risk criteria (often relating to the customer’s employer) “as there is no credit history available for new customers”. CBI uses credit bureau scores in addition to other risk assessment criteria such as employment type and level of income, Mr Balchandani says.

Be aware that banks will check both your salary but how much disposable income you have, says Ms Khatun Khan, so live within your means. “If you reach 50 per cent of your income to debt ratio, known as your debt burden ratio, banks will not keep loaning you money.”

You will have to build your creditworthiness from scratch in the UAE, Ms Musa of points out. But she also advises planning ahead to retain your credit score at home - for instance, by keeping a credit card active - and sticking to the repayment schedule of any unpaid debt you have left behind.

Saving and investing in the UAE

HSBC’s Expat Explorer Survey finds that people moving abroad have more disposable income than when living in their country of origin, says Mr Hadi, giving new arrivals in the UAE “a great opportunity to grow their wealth”. CBI’s Mr Balchandani says long-term saving or investing is something all individuals, “irrespective of age or income bracket”, should “earmark as high priority”.

The tax band you were paying in your home country should be how much you aim to save in the UAE, says Ms Khatun Khan. But start saving straightaway, she says, even if it is just five per cent. “It’s easier to increase than to start, a year down the line.” Keep your end goals in mind, write them down and “keep them somewhere visible – the fridge, your workstation”.

Living expenses should be no more than 70 per cent of income, she says, and it is good practice to keep a month’s salary as cash for miscellaneous expenses.

Putting your money to work and investing 20-50 per cent of your income should mean that a few years in the UAE make a “big difference” to your finances, says Sebastien Aguilar, a Dubai resident who heads the non-profit investment community, But he advises new expats not to get over-excited and “inflate their lifestyle too much”. “The number one factor influencing how much wealth the average expat will build is his/ her capacity to save,” he says.

Financial advice in the UAE

Securing trustworthy financial advice can be tricky in the UAE. Beware of any advisers that cold call shortly after you arrive, says Mr Cronin of “Financial advisers prey on new arrivals as ‘fresh meat’ - people who haven’t yet heard about the risks of investing in a long-term savings plan or whole-life insurance scheme,” he says.

“Most of these advisers receive huge commissions for selling you a plan, so they will not act in your best interests. As a good rule of thumb, don’t trust anyone receiving commission rather than charging for their time. Never accept total fees of more than two per cent for anything. Always avoid any investment offer that promises you more than 10 per cent return per year - it is most likely a scam.”

Mark Zoril, a US-based financial adviser who says “hundreds” of UAE clients now use his $96-a-year retainer plan, suggests asking for an email detailing how much the adviser receive in compensation if you work with them. “If they are recommending an investment product, you should clearly know how much their compensation will be in the first year and in subsequent years,” he says.

Andrew Hallam, author of Millionaire Expat: How to Build Wealth Living Overseas, says some financial salespeople flog schemes with the highest investment fees in the world. "Over a period of 10 years or longer, expats that fall victim to such products have virtually no chance of beating inflation," he says. If you do buy into a regular investment scheme, make sure you can sell at any time without penalty - and ensure you have that in writing, Mr Hallam adds.

Instead, Mr Aguilar, of, advises working with a fee-only adviser, considering a "robo-advisor" - a platform automating index investing, consequently with low fees - or learning how to invest for yourself.  "The overall cost to invest then drops to the minimum possible," he says.