Why notifying your bank before leaving the UAE can help avoid mounting debt and legal complications.
Dubai: Expats often spend months preparing for their move to the UAE, but planning their departure can be a far more hurried process. Dubai-based financial coach Jay Adrian Tolentino told Gulf News that many people organise their exit within just a few weeks, with contacting their bank often left until the last minute.
That delay can turn what should be a relatively simple departure into a costly financial problem and, in some cases, lead to legal complications. This raises two important questions: Can UAE loans or credit card debts be settled from overseas without returning to the country? And what financial steps should expats complete before boarding their final flight out of the UAE?
UAE debts can be settled from abroad, but communication is crucial
According to Tolentino, leaving the UAE while still owing money does not automatically amount to a criminal offence, as unpaid bank debt is generally treated as a civil matter.
However, he noted that complications can arise in cases involving a security cheque that is dishonoured after the account has been emptied or closed before departure. He stressed that failing to communicate with the bank is often what causes problems to escalate.
Tolentino advises expats to contact their bank before leaving the UAE and obtain details of their outstanding balance, payment instructions and any agreed repayment plan in writing. Those able to make a lump-sum payment can also request a settlement amount, as banks may sometimes agree to a reduced figure for an upfront payment.
He added that the bank account will typically remain open as a non-resident account, allowing customers to continue making payments through overseas transfers. Expats should also retain receipts and records of every transaction as proof of payment.
Once the outstanding debt has been fully repaid, expats should request an official clearance letter from the bank and keep it safely as proof that their financial obligations have been settled. Failing to address unpaid debt, however, can lead to more serious consequences.
Tolentino said debts of Dh10,000 or more could potentially result in a travel ban, which a person may only discover when attempting to enter or leave the UAE through an airport. If legal proceedings have already been initiated, he said a UAE-based lawyer may be able to handle the settlement on the individual’s behalf through a power of attorney.
“UAE debt can generally be settled while living abroad, and simply leaving the country with an outstanding balance does not automatically make it a criminal matter. However, complications can arise if a security cheque is dishonoured after an account has been emptied or closed. The key is to remain in contact with your bank, confirm the outstanding amount and payment details, and secure any repayment arrangement in writing before leaving.”
Jay Adrian Tolentino, Dubai-based financial coach
Recover your deposits before closing accounts – Refunds from utility and telecom providers such as Dewa, e& and du may need to be credited to an active bank account. Expats should therefore make sure any outstanding deposits or refunds have been received before closing their UAE accounts.
Keep track of your residency status – Access to banking services can be affected by changes to UAE residency status. Once a residence visa and Emirates ID are cancelled, some banks may place restrictions on an account or change how it can be used. Glynn therefore recommends completing important banking transactions while residency documents remain valid.
She also warns that closing a current account does not necessarily mean a credit card held with the same bank will be cancelled. If a card remains active without the customer realising it, annual fees, interest and late-payment charges can accumulate and potentially result in significant debt.
“Closing a current account does not automatically cancel a credit card held with the same bank. Customers should confirm that each product has been formally closed, as an overlooked credit card can continue accumulating fees, interest and penalties over time.”
Carol Glynn, Founder of Conscious Finance Coaching
Plan for your final salary and gratuity – Expats with loans should also consider how their end-of-service benefits will be handled. If a salary account and an outstanding loan are held with the same bank, the bank may apply some or all of the end-of-service payment towards the outstanding balance, depending on the applicable terms and circumstances.
Glynn advises expats to check with their employer about when their final salary and end-of-service settlement will be paid, while also requesting an exact outstanding balance from their bank. Where possible, she recommends clearing and formally closing all debts before the gratuity reaches the account. This can reduce the risk of the account being frozen and avoid the administrative process involved in restoring access.
Close credit cards formally – Simply paying off the outstanding balance and destroying the physical card does not close the account. Expats should formally cancel the credit card and ensure that any linked direct debits or recurring payments are also terminated.
Glynn stressed that closing a current account with a bank does not automatically cancel a credit card held with the same institution. Customers who mistakenly leave cards open could continue accumulating annual fees, interest and late-payment charges, potentially resulting in substantial debt over time. She also cautioned against assuming that a fee-free card will remain free indefinitely, as product terms and conditions can change.
Get written confirmation – Once financial obligations have been settled, expats should obtain a “no liability” letter from each bank confirming that there is no outstanding balance and that any security cheques have been cancelled.
Glynn recommends keeping these documents securely for the long term, as they can serve as important evidence if a dispute over an old account or debt arises years later.
Consider keeping one bank account open – Expats who are still expecting a security deposit, gratuity or other payment should check whether their bank allows them to maintain an account after becoming a non-resident. They should also confirm any applicable fees and how the account can be accessed from overseas. If keeping the account open is not possible, alternative arrangements for receiving outstanding payments should be made before departure.
Return unused cheques – Do not simply throw away unused cheque books or cheque leaves, as some banks may require them to be physically returned before an account can be formally closed.
Clear outstanding debts before leaving – Unresolved financial obligations can lead to serious consequences, potentially including legal action, travel restrictions, debt collection efforts and damage to an individual’s credit record.
Update your contact information – Make sure banks and other financial institutions have your latest contact details so that final statements and important notices can reach you after you leave. Glynn also recommends checking your credit report periodically to ensure accounts have been properly closed and no unexpected liabilities remain.
Being debt-free may not be enough — consider the tax implications
Banking arrangements are only one part of the financial planning required when leaving the UAE. Expats relocating to countries with higher taxes may also need to consider potential capital gains tax liabilities.
Steve Cronin, founder of DeadSimpleSaving.com, said expats returning home with accumulated gains from investments such as property or shares could face an unexpected tax bill. His platform focuses on helping expats in the UAE, Saudi Arabia and other countries plan, save and invest towards financial independence.
Cronin explained that tax treatment varies by country, but in some jurisdictions, selling assets after becoming tax resident can result in capital gains tax being calculated using gains accumulated since the asset was originally purchased, rather than only those arising after the person moved to the country.
For expats who have built up substantial investment gains while living abroad, he said this could result in a significant tax liability.
Cronin warns that expats moving to a higher-tax country could face significant capital gains tax liabilities on investments accumulated while living abroad. Depending on the destination country’s tax rules, gains may be calculated from the original date an asset was purchased rather than from the date the individual became tax resident there.
“One of the biggest financial issues expats can face when returning home is arriving with substantial unrealised gains on property or investments. In some countries, selling those assets later could mean paying capital gains tax based on gains accumulated from the original purchase date, potentially creating a significant tax bill.”
Steve Cronin, Founder of DeadSimpleSaving.com
For stock investments, Cronin suggests considering whether selling before relocating could be appropriate. Depending on individual circumstances and the tax rules involved, investors could then consider purchasing a similar but different investment in the currency of their destination country. Property requires more careful planning, although he said selling before relocating may also be worth considering in some circumstances.
Cronin also echoed Glynn’s warning about leaving unused financial products open. A dormant credit card can continue accumulating fees and, potentially, interest on unpaid charges, creating liabilities that may go unnoticed.
Expats who want to retain banking links with the UAE should check whether their bank offers non-resident accounts. Requirements vary between institutions, and some banks may allow customers to maintain an account provided they meet conditions such as a minimum balance.
Keep your UAE mobile number active until everything is closed – Cronin also advises expats not to cancel their UAE phone number too early. Banks, utility providers and telecom accounts may rely on the registered number for verification, making it considerably more difficult to manage or close accounts from overseas if access to that number has already been lost.
He recommends keeping the UAE number active until all bank accounts, utilities, broadband services and other outstanding accounts have been fully settled and formally closed.
