How To Budget For A Move To The UAE: An Expat Guide

It is hard to talk about the United Arab Emirates without using superlatives. In less than four decades this Middle Eastern country has completely transformed itself from a tribal culture that was mainly dependent on fishing, pearl diving, and agriculture to a commercial, entrepreneurial, and industrial success story. The UAE has come a long way from the desert it once was, to the highly modern business hub with world-class infrastructure it is today.

It has become one of the most popular expat destinations for businesspeople, professionals, students, and retirees from around the world. Living in one of the Emirates, even for a short duration of time, is considered a unique and culturally-enhancing experience for adults and children of all nationalities.

The average pay in some of the Emirates is at par with (if not higher than) many European and Asian countries. Moreover, since it is an Islamic nation, the residents of the UAE do not pay taxes on their income or most of the items that they purchase (though there is a Municipality Tax on property). The total disposable income is therefore higher in this nation, which is one of its main attractions. Though the overall cost of living has skyrocketed in the last few years, it is still slightly lower than New York, London, Singapore, Switzerland, and Japan.

Nonetheless, many expatriates notice that they don’t really save much even after spending several months in the UAE. In fact, many of them have to dip into their savings even before landing in the UAE just to make the move.

Relocating, as we all know, can be quite an expensive affair, especially when the whole family is involved. In such cases, most of us consider the travel, accommodation, and food costs. However, there are several more expenses that need to be factored in when planning a budget to move. If you are moving to the Emirates for professional purposes, you may want to ask your employers for a relocation allowance. Read on to learn more about the various expenses you should keep in mind when drawing out your budget.

Shipping belongings 

Shipping is probably one of the first expenses you may incur when you move. The amount you spend will depend completely on the country you are traveling from and what you decide to take with you.

Most people prefer to carry personal items such as clothes, accessories, jewelry, books, documents, DVDs, medication, toiletries, cosmetics, and laptops with them on flight. The bigger and bulkier items like your furniture, electronics, household appliances, crockery, utensils, and art collection can be sent over by sea separately. Some companies include the packing charges in their quotation, which means that you have to pack nothing on your own. Of course, all the items have to be insured, which increases the cost to a great extent.

People pay anywhere between AED 10,000 and AED 25,000 to get their belongings shipped. Some employers in the UAE offer to pay this. Others believe it is best to avoid this expense completely and give their expat employees an additional amount to set up their house instead.

Visas and work permits 

Unless you are a GCC national, you will require an employment visa if you’d like to take up a job in the UAE. Just the visa application fee per person is AED 300 and the deposit is around AED 5,000. The actual cost of the visa is surprisingly low, at less than AED 200 per year. If you want to speed up the process it will cost you AED 100 extra.

However, it is essential for all applicants to undergo certain medical tests which could cost AED 200 to AED 300 in total. In all probability, your employer will be obligated to pay for your residence visa and work permit expenses.

Accommodation 

Dubai alone has more than 235,000 housing units, and more than 70% of the local population rent their homes. Because of the high demand for accommodation, landlords get away with charging exorbitant amounts for their properties. You can end up paying anywhere between AED 2,000 (for a small, studio apartment) and AED 25,000 (for a huge villa), depending on the location you choose.

Don’t forget to keep at least 5% of the rental value of the property aside to pay the real estate agent’s fee. Another 5% of the annual rent will have to be paid as deposit on unfurnished accommodation. If the place you are renting is furnished, the deposit is likely to go up to 10%.

Telephone, internet and television 

Telecommunication and cable services across the UAE are usually provided by one of the two main operators, Etisalat and the Emirates Integrated Telecommunications Company (also known as Du). There is no charge for making calls from one landline to another. Mobile bills in Dubai are also relatively low as compared to Western countries. What you do need to consider when you first move to the Emirates is the installation charge.

The installation fee charged by Etisalat is around AED 180. This is a one-time, non-refundable charge. You can choose a package for all three services, ranging between AED 259 and AED 539 per month.

Charges levied by Du are much higher. There is an initial payment of AED 200 as well as an advance payment or adjustable deposit of AED 200. For every decoder you require, there is a deposit of AED 150. You can choose a package for all three services, ranging between AED 199 and AED 509 each month.

Utilities 

Water supply, sewerage, electricity, and housing fees are the basic monthly expenses to consider when planning your budget. On average, a family of four pays around AED 1,200 per month towards these utilities. This amount may change drastically, depending upon the size of your house and your lifestyle. However, don’t forget to put a fair amount aside for the deposits and connection fees to set up these utilities.

DEWA provides the main utilities to the residents of Dubai. When applying for a new connection, you will be asked to pay a deposit ranging between AED 2,000 (for an apartment) and AED 5,000 (for a villa). This amount is refunded to you when you leave.

In addition to the deposit, you also have to be a non-refundable, one-time connection fee ranging between AED 110 (for an apartment or small villa) to AED 210 (for a bigger villa).

Education 

The education system in the UAE is among the best in the world, with over 500 international schools across the country. Almost every Emirate has a wide variety of private schools, offering its students a choice of 13 international curricula. Some of the top institutes differentiate themselves from the others by getting accredited by at least one globally-recognized body.

Moreover, a number of English medium institutes have a staff base that consists of well qualified and experienced expatriate teachers. The style of education in many has moved away from being trainer-led; a vast majority of the institutes have been adopting engaging methods such as interactive whiteboards, wireless internet, and experiential learning. The top schools in the UAE also boast of numerous facilities like swimming pools, science labs, technology labs, art studios, drama studios, and auditoriums, to name a few.

However, such good quality education comes at a high price. Moreover, public schooling isn’t available to expats. Some of the international schools in Dubai are actually a lot more expensive than well-reputed British academies.

Depending upon the age (grade) of your child and the school you choose, you could pay anywhere between AED 8,000 and AED 99,000 per annum. This only includes the yearly tuition fees. You will probably end up paying a few extra thousands every year on books, uniforms, field trips, bus fees, and stationery. A majority of the private schools also charge an application fee and admission fee for new students or even returning students.

Expat families settled in the UAE spend a significant amount of their incomes on their children’s education. It is therefore best for you to take up a job where the employer offers to pay the school fees. Since the initial cost of joining a school could run into thousands of Dirhams per child, make sure that you consider that in your budget too.

Domestic help 

Even the middle-class residents of the UAE are known to lead a fairly comfortable lifestyle compared to other places. One such luxury attached to life in this country is being able to afford full-time domestic help. While this may be the norm for some Asians, it is a new experience for many Americans, Canadians, Australians, and Europeans.

The UAE has become a hotspot for housekeepers, nannies, babysitters, cooks, and drivers from countries like the Philippines, India, Sri Lanka, Bangladesh, Ethiopia, and Indonesia. Of course, there are numerous legal implications and costs that come with hiring of foreign domestic help in any of the Emirates. Do bear in mind that engaging part-time help without the proper paperwork is neither safe nor legally permitted.

First of all, the starting salary of a live-in domestic helper could range anywhere between AED 2,000 and AED 4,000, depending upon their responsibilities and experience. This is the basic salary, and as an employer, you will be expected to include other allowances such as boarding, lodging, medical expenses, toiletries, phone calls, clothing, and so on. People from certain countries will expect an annual bonus, which is equivalent to a month’s pay.

The cost of sponsoring a housemaid from another country could easily come up to AED 10,000. Depending on that person’s nationality you could also be asked to pay a deposit ranging from AED 3,500 to AED 9,500. If an agency is involved in the recruitment process, don’t forget to factor in their fees too. Engaging a local for basic housework turns out much cheaper.

If you are not happy and decide to terminate their services, you are obligated to pay for their visa cancellation and airfare back home.

In certain cases, companies also offer to pay for their expat employees’ domestic help.

Inflation 

While this isn’t exactly an expense, it is an important aspect to consider when you plan your finances. According to a report published by Gulf News, Dubai’s inflation rate has been expected to be anywhere between 15% and 22%. The International Monetary Fund (IMF) has flagged off the country’s inflation rate as one of its biggest potential challenges at 8%. Your salary is not likely to increase at the same rate (unless you get a promotion or change jobs).

One of the main factors contributing to high inflation rates is the rise in property rentals. It is therefore best for you to negotiate a package wherein your employer pays your monthly rent, even if it means that you take home a bit less in comparison. This way, you won’t have to worry about the dramatic spike in renting expenses every year.

Summary

These are just some of the basic expenses that most expats incur when they first move to the Emirates. It doesn’t take into account the amount you spend if you decide to obtain a driving license or purchase a house or vehicle.

In a country like the UAE, where even luxuries soon seem like necessities, it is easy for outsiders to fall in a trap. With a higher disposable income, you may actually find yourself spending a significant amount of money each month on expenses that you wouldn’t normally have back home; for example, an all-inclusive cable package, a club membership, or a full-time housekeeper/driver.

While there is nothing wrong in splurging, it is essential to consider these possible expenses beforehand while planning your finances in order to avoid any disappointments later on.

Living in the UAE

With 80% of the UAE’s population being foreign born, the country is often considered an expat’s paradise. Indeed, you’ll find that many aspects of living in the UAE combine to make settling in fairly easy for expats. Our Inter Nations Guide gives you a detailed overview of expat life in the UAE.

As you settle down in the UAE, you get to enjoy amenities which some expats may not have in their home countries. The mobile phone system is excellent, and many of the modern buildings are equipped with air-conditioning. All these things help create a comfortable life in the UAE. The UAE has a subtropical-arid climate, with a balmy 30°C in winter and up to a sweltering 50°C in summer.

Newspapers, radio stations, and TV broadcasts are available in Arabic, English, Urdu, and several other languages to cater to the needs of expats living in the UAE. There are four monthly and weekly English-language newspapers: the Khaleej Times, Gulf News, Gulf Today, and Emirates Today.

Religion

Despite its progressive flair, modern infrastructure, and strong economy, religious traditions are an essential aspect of life in the UAE. For expats, life in the UAE means that they may have to adhere to a different etiquette, dress more modestly and deal with some limitations in their daily lives.

It is advisable for expats to be sensitive and respectful towards religious traditions. Ramadan, the Muslim month of fasting and one of the five pillars of Islam, is taken very seriously in the Emirates. Non-Muslims living in the UAE may be surprised when they experience reduced office hours, closed restaurants, and other disruptions of their daily routine during Ramadan.

Local Traditions

The rich traditions of the seven emirates are a big part of life in the UAE. The country remains proud of its history of fishing, boating, and trading, which used to dominate life in the UAE for centuries.

The souqs, traditional markets which were once the center of everyday life, are an essential place to visit. Many of them have been preserved in their original state, giving a picturesque impression of what life used to be like. Dates, camels, Arabian horses, and falconry are still important aspects of life in the UAE today.

Buying Property

Foreigners who are interested in buying property in the UAE will have to deal with a great amount of nontransparent legislation. In general, you can expect the rules for purchasing to be wildly different, depending on the emirate you are living in.

The real estate market started to open up to expats living in the UAE in 2002, allowing them to buy property within selected housing projects. Soon, other emirates such as Ajman followed.

In mid-2011, the government of the UAE introduced a change in real estate legislation for expats living in the UAE. Individuals purchasing property for more than 1,000,000 AED can obtain a “Property Holders Visa”, which is valid for six months.

Beginning in December 2013, the UAE Central Bank introduced new regulations concerning property loans for both nationals of the UAE and for expats. The point of these regulations is to decrease cases of uncontrolled lending and to reduce the amount of borrowed money in these investments.

In 2013, the average price for apartments in Abu Dhabi was USD 3,867 (14,200 AED) per square meter, and the average price for villas was USD 2,860 (10,500 AED) per square meter.

Renting Accommodation

During the last few years, rental prices have decreased, thereby increasing the competitiveness of the market. The price of living in the UAE depends on the location and size of the accommodation. Dubai has the highest rates in the country, with mostly unfurnished housing, making life in the UAE still a rather costly endeavor.

Apartments and houses usually offer a high standard of living in comparison to many Western and European countries. Due to the temperatures and humidity in the summer months, air-conditioning is a must. Moreover, houses and villas often come with a maintenance service as well.

Running water and electricity supplies are widely available in the UAE. Due to the increased power consumption during summer, of which 65% is due to air-conditioning, occasional power outages can occur every now and then. However, these problems are usually solved very quickly. Water supplies are provided by desalination of ocean water to ensure drinking water is always available to Emiratis and expats alike.

When looking for a place to rent, you should double check that your agent is registered. In Dubai, a RERA card will confirm that the agent is legal and not freelancing (which is illegal in the UAE). You should expect a fee of about 5% to the agent. The legal contract must be registered through Ejair, while in Abu Dhabi it must be registered through the Tawtheeq system. You will be asked to provide proof of residency and a copy of your passport, as well as a deposit once you have settled on a place to live.

Cost of Living in The UAE

Last year saw a dramatic decrease in the cost of living in many cities in the UAE and in the 2012 Mercer cost of living survey no cities in the UAE featured in the top ten most expensive cities in which to live; Abu Dhabi (76) overtook Dubai (94) in the rankings and became the most expensive city in the United Arab Emirates.

One of the biggest benefits to expatriates of living in Dubai is the low taxation and this has a positive impact on the cost of a number of items, including vehicles, electronic goods and local produce. Utilities are also slightly cheaper here than they are in many countries as a result of government subsidies on electricity, water and gas.

As with many cities, accommodation will represent the biggest cost that expatriates face but, according to Mercer, accommodation costs in the region are decreasing: “The trend of falling accommodation costs continues across the Middle East region, driving the cities down the ranking along with the cost of living for expats. Dubai in particular is witnessing a drastic reduction in accommodation costs as the supply of property keeps flooding the rental market.”

Expatriates living in the UAE who search out luxury goods or international brand names will also need to be prepared to pay higher prices for those items.

Our relocation guide contains detailed living costs across different types of lifestyles and living options. Because our guides are written by expats who live and work in the countries themselves, you can be assured that the information is accurate, reliable and up to date.

Living in The UAE: Expat Job and Career Opportunities

In recent years, through a program that is known as Emiratisation, the UAE government has placed significant pressure of companies to assist them to reduce unemployment amongst nationals. This has led to a reduction in opportunities for foreign workers and it can be very difficult to secure work. The majority of expats who are based here are on international contracts that were secured whilst in their home countries.

Key Facts Every Expat Should Know About Living in The UAE

  1. If you hold an Israeli passport or if your passport has entry/exit stamps from Israel, you will probably not be permitted to enter any UAE country.
  2. A permit is necessary for the purchase of alcohol from registered vendors. No alcohol at all is permitted in the Emirate of Sharjah.
  3. There is no free state education for those living in the UAE who are not UAE nationals.
  4. Many rental accommodation contracts are for at least one year and many landlords will request that the full year’s rent is paid in advance. If you leave the country before the end of the year the likelihood is that you will not get the money back.
  5. If anyone in the UAE requests to keep your passport, e.g. a hotel or your company, you should always say no. They don't have the authority by law to keep possession of your passport.

Living in The UAE: City Guides

Expat Info Desk currently has a city guide available for living in Dubai. This exhaustive guide contains everything you need to know about relocating to this city and will assist you to:

  • relocate efficiently and effectively with minimum stress.
  • settle in to your new life quickly and easily and find the help and assistance you need, when you need it.
  • identify areas to live in that suit your lifestyle and budget.
  • find the right places to meet like-minded people.
  • find schools that are suitable for your children and their learning needs.
  • ensure that your family get the most of their experiences abroad.
  • prepare for the new culture in advance and avoid any cultural traps.
  • deal with any transition challenges.
  • cut through red tape and avoid unnecessary bureaucracy.

Unlike a book, the guides are regularly reviewed and updated in order to ensure that the information is accurate and reliable and because the guides are written by real expats who live and work in Dubai, you can be assured that you are accessing the information that you need as written by people who really are in the know

Work in UAE

If you wish to transform your career, consider working in the UAE.

The experience will change your outlook, widen your horizons and help scale new peaks as a professional. You also have the benefit of tax free income, high standard of living and a secure environment. In fact, the UAE is ranked the No. 1 Middle Eastern country on the 2012 Prosperity Index and 29thglobally.

Let’s take a closer look at this dynamic nation that ranks among the fastest growing economies in the world and preferred choice of those who wish to work abroad.

Geographical Location

The UAE is located in the Middle East, on the Arabian Gulf between Oman, Saudi Arabia, and Qatar. The land area is around 80,000 sq. km. It has a population of approximately 8 million, with a significant proportion of expatriates originating from over 200 countries. The majority are from India, Pakistan, Philippines, UK and from neighbouring countries in the Middle East and Africa.

History

The UAE was founded on December 2, 1971 by the late His Highness Sheikh Zayed Bin Sultan Al Nahayan. The current president of the UAE is His Highness Sheikh Khalifa Bin Zayed Al Nahyan. The UAE is a founding member of the Gulf Co-operation Council (GCC).

The United Arab Emirates is made up of seven Emirates: Abu Dhabi, Dubai, Sharjah, Ras al Khaimah, Ajman, Umm Al Quwain, and Fujairah. The capital of the UAE is Abu Dhabi.

Religion and Culture

Arabic is the official language, and the country’s religion is Islam. Muslims pray five times a day based on the cycle of the sun.

Ramadan is the ninth month of the Muslim lunar calendar and is regarded as the holiest month of the year. Muslims believe that the Prophet Muhammad received his first revelations of the Quran during this period. From that time, Muslims have observed this occasion by forgoing food, water and other necessities during the day for the entire month as a mark of their faith.

The UAE is a country tolerant of other religions. You will find Christian churches, Hindu Temples and other places of worship.

UAE male nationals wear traditional attire known as khandora or dishdasha. UAE female nationals wear a black robe known as abaya, over their clothing, and cover their head with a scarf, known as shayla. Muslim expatriates often wear their native country’s traditional attire, while non-Muslim expatriates are dressed in western attire.

In respect to UAE culture and religion, expatriates are advised to dress conservatively.

Greetings and Personal Conduct

It is important to know the proper method of greeting a person. You could start with saying assalam alaikum (peace be with you). The reply you hear would be walaikum salam (may peace be with you, too). Handshakes are normally only between men.

Hierarchy and respect are of utmost importance. You should be patient if a meeting extends longer than expected or postponed.

Expatriates should correctly spell and pronounce names and titles of their business partners. Abbreviations are considered rude and should be avoided.

Work Week

The working week is from Sunday to Thursday, with Friday and Saturday as the weekend. Most offices observe a nine-hour work day with a break for lunch. Some private institutions choose to split the working hours from 8 am to 1 pm with an afternoon break, and resume work from 4 pm to 8 pm. Many Government agencies and banks close at 2.30 pm.

Residence Permits

All expatriates living in the UAE, including expat spouses and children, must apply for a residence permit within 30 days of arrival. The permit is valid for 3 years.

Please remember that an expatriate is eligible for a residence visa only if employed by a company in the UAE or if they are dependents of an employee in the UAE. When expatriates are terminated for any reason, or if their contract ends, the residence permit becomes invalid and they would have to leave the UAE within a stipulated time.

If you are living in Dubai and wish to sponsor your family, you would require a rental contract executed in your name. The objective is to ensure that you are able to offer suitable accommodation to your family. Your application will also be taken into account if your rental contract is from a different emirate.

Education

A number of institutions provide high quality education in the UAE. International schools offer a special curriculum and a Western environment for expat children. For higher education, private universities offer diverse courses for a multi cultural student body. Many are located at Knowledge Village and Academic City in Dubai and you will find other institutions across the emirates.

Healthcare

You are assured of high-quality medical care in the UAE. More than 26 hospitals and over 100 healthcare providers offer a wide range of medical services. The UAE also offers excellent maternal health services. With excellent immunization coverage, there are almost no outbreaks of children’s diseases. Polio has been eliminated completely in the region.

Restricted Medication in the UAE

The Ministry of Health in the UAE and enforced by the UAE Ministry of Interior and International Narcotic Controlled Board (INCB) has a list of Controlled Medicines and Medications for all travellers to the UAE. Be aware that several prescription medications are banned, especially anything containing codeine or tamazepam. The UAE maintains a strict zero tolerance policy on recreational drugs and even microscopic amounts will be treated as a punishable offense.

Renting of Accommodation

Expatriates have a number of options for renting of property for their stay in the UAE. The rent would depend on the size of the accommodation, and the locality. Most apartments would be rented out as unfurnished. Those looking for furnished accommodation can choose to live in a serviced apartment. Please remember that it is against the law for multiple families to live in a single accommodation.

The best way to find accommodation is to look up the classifieds section of newspapers. Or you can get in touch with a real estate consultant or property developer who would assist you to find a home within your budget.

Transportation

Getting around the UAE is an easy task given the excellent road and transportation network.

Public transport includes taxis, buses and the Metro train in Dubai. Expatriates from most countries have to take the local driving test if they wish to drive in the UAE. Traffic regulations are strictly enforced, and even small violations can lead to a fine.

Pedestrians are expected to follow road regulations and cross only in designated areas.

Points to note before your arrive in the UAE

Your passport must be valid for at least 6 months before your arrival, and should have a minimum of 4 blank pages for entry/exit stamps.

Make sure you have all relevant certificates attested in your own country. For this, you would have to contact relevant authorities and the UAE embassy in your home country. Please also bring around 15 passport size photographs, essential for visa processing, medical test and driving licence application. Be sure to bring some photocopies of your passport.

Depending on your role and marital status, you are advised to bring necessary attested certificates. This could include:

  • Original copy of degree* (only the highest degree relevant to your position)
  • Marriage Certificate (if applicable)
  • Children’s Birth Certificates (if applicable)
  • Divorce Decree or Spouse’s Death Certificate (if applicable)
  • Divorced mothers who want to sponsor their child(ren) in UAE must produce an authenticated document signed by the child(ren)’s father stating that he authorizes the mother to sponsor the child(ren) for residence in UAE.