Can I keep my UAE bank account as a non-resident?
QAfter 16 years in Dubai, we will be returning to the Netherlands and are going through the process of our visa cancellation. We have no outstanding debts at our local bank and would like to keep our account for the time being as we still have a final payment to be made for an apartment on the Palm, later this year. Would you recommend keeping the account? Are we obliged to inform the bank about our visa cancellation or what is the best way forward? TD, Dubai A
If this bank account receives salary payments, which is usually the case where there is a mortgage, the bank should be aware of a change of status as the last payment must be marked “final salary” and the account is often frozen, particularly where there is an outstanding debt. In this case, the mortgage appears to be with a different bank, which is unusual, but either way it is entirely possible for people to retain a bank account on leaving the UAE.
If there is a local mortgage a person needs to have a local bank account, as that is generally a requirement, and even if the mortgage is repaid in full, a bank account is required for the maintenance of the property and the payment of service fees, bills and to receive rental payments.
Most banks will allow customers to keep an account after they are no longer a resident but will change the status to a “non-resident” account. No credit will be permitted and most banks don’t provide a cheque book but non-resident account holders do get online banking and an ATM card so that should be sufficient. TD should advise the bank of a change of status, but this should not present a problem.
I work for a company based in the Dubai International Financial Centre and would like to know if my employer has to pay for my ticket if I leave and return to my home country. Is this just for the employee or also their dependants? The employer paid a home ticket allowance at the start of the year and a pro rata amount will need to be paid back. My employer says that the home leave allowance covers the ticket home? AM, Dubai
DIFC has its own labour laws and while in many ways they are very similar to the standard UAE Labour Law there are distinct differences in a number of areas. The main UAE Labour Law, which covers mainland companies and is largely adopted by free zones, specifies circumstances in which a departing employee may have a flight to their home country paid for by their employer at the end of service, assuming they are not moving to another position, this is not the case under the DIFC Labour Law.
No employer based in the DIFC has any obligation to pay for the cost of flights at the end of service. Indeed, the provision of an annual flight is not mandatory under any of the various labour laws, although it is often given as a contractual benefit as part of a salary package. Whether annual flights are for dependants in addition to the employee entirely depends on the wording in the contract of employment.
In this case, it appears that a ticket was paid for before the entitlement built up but, again, this should be covered in the contract of employment. If this benefit is on an accrual basis and is paid in advance, then the employee would have to repay part of the cost.
I am in the process of buying an apartment in Dubai but have a question about how a few things will work. I plan to live in it for six months before I leave the UAE and then I want to rent it out. If I am the owner do I have to pay a housing fee or is that just for tenants as I have been told different things? If I then rent it out, do I have to account for rental income as I own two apartments and the total income will be more than the VAT threshold? TH, Abu Dhabi
The housing fee is payable by all expatriates in Dubai and that includes property owners, as well as tenants. Tenants pay a fee equivalent to 5 per cent of the annual rent payable and property owners pay an amount of 5 per cent of the market rent for the property that they own, based on the figures shown in the Real Estate Regulatory Agency calculator. In both cases, Dubai Municipality collects the fee via Dewa bills.
When an individual rents out a property that they own this is not seen as a business venture and rental income on a residential property, assuming it is on a standard annual lease, is not subject to VAT anyway, so there is no requirement here to account for the rental income or deal with any VAT issues.
Keren Bobker is an independent financial adviser and senior partner with Holborn Assets in Dubai, with over 25 years’ experience. Contact her at keren@holbornassets.com. Follow her on Twitter at @FinancialUAE. The advice provided in our columns does not constitute legal advice and is provided for information only
If there is a local mortgage a person needs to have a local bank account, as that is generally a requirement