zondag 22 januari 2012

Money issues to note when you arrive

Despite the slowing world economy, the expat population in the country grew by almost 90 per cent over the past three years to 8.3 million
  • By Frederic de Melker, Special to Gulf News
  • Published:  January 21, 2012
  • Gulf News
Every year thousands of people around the world decide to accept a new assignment and move to the United Arab Emirates, making it one of the most popular multi-cultural destinations.
Despite the slowing world economy, the expat population in the country grew by almost 90 per cent over the past three years to 8.3 million. Relocating or moving to a new country creates various needs, most crucial of which could be ready access to financial services. Unfortunately, the services provided by relocation agents are not always affordable. So, from a banking perspective, what are the first steps you should take in the reorganisation of your financial life?
Getting started with a new banking relationship in a foreign country is not an easy task as you face different banking dynamics, new regulations and unfamiliar financial habits. You have to re-establish your cash and wealth management, review protection and loan facilities, and start a relationship with a new partner bank. Some people prefer an international brand although the accessibility and market knowledge of local banks is often a plus.
Is your visa stamped?
The current account is strictly regulated in the UAE. Only residents with a valid visa are allowed to receive a chequebook. This is why a lot of banks don't allow you to open a current account. This can cause a problem during the first weeks in the country while your papers are still under process, because you need to pay your rent or transfer deposits for certain utility services. Opening a savings account can be a solution. Money transfer using the branch or even online is allowed. A debit card also provides you with electronic payment facilities.
While in some countries the use of cheques has, over the years, almost vanished, in the UAE they are still a widely used instrument. Don't get yourself into hot water with a bouncing cheque, because it is a criminal offence that can have severe consequences. A small overdraft facility on your current account protects you in case you do not have sufficient balance.
Going plastic
Credit cards are very popular, and the market offers a wide range of feature-packed plastic. It is worthwhile to take time and explore the benefits offered, to find a card that suits you best. Being eligible for a card depends on different aspects.
As in most countries, the credit card market is open. However banks sometimes ask for salary transfers or a minimum period of banking with them before issuing a credit card. This can vary from one financial institution to another.
Personal Loans
As in most markets, all standard loan products are available. The maximum amount that can be obtained goes up to 20 times your salary. It is important to mention that your employer plays a significant role in the bank's acceptance policy and needs to be on the approved list. Some banks may lend you the capital you need despite your employer not being listed, but charge you a higher rate.
Hit the road
Banks are more flexible on car loans, and in most cases the employer-approved list or salary transfer is not applicable. Since April 2011, however, the UAE Central Bank has tightened its regulations, resulting in a mandatory down payment of 20 per cent of the value of the car whether it is new or second hand.
Do you need some advice?
It is important to be well-informed in order to ensure that you land safely in your new banking environment. As a mass affluent customer, you are entitled to be supported by a relationship manager who is probably best placed to advice you on the steps to take.

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