Beware The Hidden Costs Of A Move To The UAE

Marcus Gent (pictured below) has recently relocated from the UK to Dubai in the United Arab Emirates. He has encountered many hidden costs as well as benefits, since confirmed by research commissioned by his company.

Marcus moved to Dubai  to take up the position of managing director, Middle East and Rest of World, for insurance and investment firm Friends Provident International (FPI).

He, like other expatriates in UAE and elsewhere in the Gulf, was attracted by the absence of income tax, meaning salaries go much further. But he has words of caution for those considering a move to the Middle East:

“A tax-free income is without doubt one of the key benefits of living and working here. However, property rental prices in some areas of Dubai have risen 60 per cent over the last 12 months and, with some schools proposing an increase in education fees of up to 7 per cent this year, would-be expatriates must consider these factors before making the move.”

Marcus commissioned a report into the costs of a move to the UAE. The resulting white paper shows that people planning to move to the UAE should indeed ‘look before they leap’.

FPI has since released the white paper and a complementary video entitled UAE Expatriates and the Bottom Line, which reveals that expatriates considering a move to live and work in the UAE should assess all the positives and negatives before taking the plunge.

The Economist Intelligence Unit (EIU) was commissioned by FPI to compile the research, which looks beyond the tax-free lifestyle enjoyed by expatriates in the UAE, and examines the costs which may not be readily apparent to those considering the move.

The paper draws on data from the EIU’s Worldwide Cost of Living Survey, which is based on a basket of goods and services, and tracks over 50,000 key prices in over 130 cities around the world. 

Interestingly, based on the basket of goods and services, the cost of living in Abu Dhabi and Dubai are 38 per cent and 42 per cent respectively less than Sydney, Australia. However, the EIU index does not include the cost of property and education, which many expatriates in the UAE find the most significant cost of living challenges.


Rising school fees

The rising cost of education has made some expatriates currently living in the UAE reconsider how long they will stay in the country. School fees tend to increase dramatically at secondary school level – driven mostly by the salaries needed to attract the quality of teachers required.

Accordingly some expatriate families plan their UAE stay, and set career goals, in five- or ten-year periods to coincide with a move home, or to another country, when their children reach secondary school age.   

Marcus Gent wants would-be expatriates to carefully consider education costs before they commit to a move to the UAE:

“Education is a key consideration for anyone moving to the UAE with their children. A lot of expatriates seem to fritter away the savings they make in tax, rather than make the most of the great opportunity they have to save. 

“With some careful financial planning and disciplined saving, the cost of a quality education can be mitigated to a large extent.

“I would encourage anyone making the move to the UAE to take professional financial advice and construct a savings and investment portfolio to offset the costs of education, and the other ‘hidden costs’ of living and working here.

 “I can thoroughly recommend the UAE as a great place to live and work, but anyone planning to make the move needs to look beyond the tax-free income, assess the overall costs and plan accordingly.”

Marcus Gent


The full UAE Expatriates and the Bottom Line video and white paper can be viewed on the Friends Provident International website