Financial Tips for Australians Moving to the Middle East

If you're an Australian moving to the Middle East, you're in for an exciting ride. The Middle East offers unique career opportunities, generous remuneration packages, and a fascinating blend of cultures.  This guide highlights the key tips for Australians moving to the Middle East and what they should think about before and after relocating.

Understand the Tax Landscape in your host country and in Australia

One of the biggest financial benefits of working in the Middle East is that there is no personal income tax in many countries, including the United Arab Emirates (UAE), Qatar, Saudi Arabia, Bahrain and Kuwait. However, just because you’re not paying tax locally in the Middle East doesn’t mean the Australian Tax Office (ATO) forgets about you.

If you’re still considered an Australian tax resident with the ATO, your global income, including your Middle East salary, is taxable in Australia. For most Australians moving to the Middle East on a more permanent basis, you will likely be considered a non-resident for tax purposes. Becoming a non-resident has its own set of considerations, so it’s recommended to seek specialist tax advice from a tax professional about your tax residency status and how this may affect your particular circumstances.

Make a plan for Banking, Currency Transfers and Exchange Rates

• Open a local bank account: You’ll likely need a local bank account in your new country for salary deposits and bill payments. Most banks in the Middle East will require confirmation of your Passport, Residency Visa and/or employment.

  
  

• Retain an Australian bank account: It is encouraged to keep an Australian bank account open if you intend to send funds home or have any financial obligations in Australia (e.g. paying off loans, investing in Australia, or receiving income from property or investments). The process to open a new bank account later, once you have already moved overseas can be challenging.

  
  

• Employ a Foreign Currency Exchange strategy: When exchanging currency, you’ll want to use a reliable foreign exchange platform or money transfer service that offers competitive exchange rates, low or no fees and fast transfers. You should also consider your exposure to foreign currency risk.

  
  

Managing your Superannuation Strategy

As an Australian Expat, your overseas employer is no longer required to make mandatory superannuation contributions on your behalf, but that doesn’t mean you can’t personally continue to grow it.

As an Australian moving to the Middle East, your superannuation remains an important asset to help you accumulate wealth while living overseas. Your super account can also be used as a tool to mitigate your exposure to tax in Australia through various contribution strategies as an Expat.

Before moving overseas is a good time to review your superannuation fund, including its performance, fees, and investing options, and consolidate funds if you have more than one account.

Learn more about our Superannuation Advice for Australian Expats. 

Consider your Property and Investments Back Home

If you are still holding property as an Australian living in the Middle East, you may wish to seek advice on:

• How any rental income received from investment properties will be dealt with by the ATO.

• Hiring a property manager so you have someone on the ground to look after your property.

• How any capital gains will be treated in the event you sell your property while overseas.

• Some tips for Australians moving to the Middle East with shares, Exchange-Traded Funds (ETFs), or other investments back home.

• The tax implications of becoming a non-resident on these investments, such as deemed disposal.

• Whether your current brokerage or investment account provider permits non-resident customers.

• The correct withholding tax rates apply to your interest, dividend and distribution income.

Review your Estate Planning

If something were to happen to you while overseas, sorting out your affairs could become a legal and logistical challenge for your loved ones. Australians moving to the Middle East should consider:

• Creating a locally compliant Will or updating your Will so that it takes into account your foreign assets, bank accounts, and property.

• Appoint a power of attorney, ideally one in Australia and one locally, depending on where you're living.

• If you have children, make sure guardianship arrangements are clear and legally recognised in both countries.

• Check if your Australian Super and life insurance beneficiaries are up to date.

  
  

You should consult a lawyer familiar with both Australian and Middle Eastern law to ensure your intentions are protected. Learn more about Estate Planning tips for Australian Expats. 

Budget for your Expat Lifestyle

While income may be tax-free in the Middle East, living expenses can be high, particularly in cities like Dubai and Doha. You may want to consider the increased costs of school fees, private healthcare, and housing. Don’t let “lifestyle creep” impact your increased earnings capacity, setting you back from achieving your financial objectives.

Plan for the Future

Consider whether your move to the Middle East is permanent or temporary. If you have intentions to return to Australia, you may want to align your financial goals with this. Accordingly, you may want to consider retaining funds in AUD and investing in Australian assets where possible. This can help protect you from foreign currency risk and align your financial strategy with your long-term goals in Australia.

Learn more about our Expat Wealth Management services. 

Conclusion

Moving to the Middle East is a golden opportunity to fast-track your financial and personal goals. This guide offers key tips for Australians moving to the Middle East, but the list is not exhaustive. To make the most of your time as an Australian moving to the Middle East, it’s crucial to understand the financial pitfalls and opportunities of being an Australian Expat. Working with an Australian Expat Financial Adviser can be a great resource to help you navigate your Expat journey and ensure you make the most of your time abroad.

Runway Wealth Management is the trusted Financial Adviser to the Australian Expat community. Our tailored advice is backed by expertise, education and experience, which allows us to be at the forefront of Australian Expat Financial Planning.

If you would like to speak to one of our Expat Financial Advisers about this blog or if you have other queries, we would be more than happy to speak with you. Feel free to send us an enquiry through the ‘Contact Us’ tab provided in the below link:

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General Advice Disclaimer: The information contained herein is of a general nature only and does not constitute personal advice. You should not act on any recommendation without considering your personal needs, circumstances, and objectives. We recommend you obtain professional financial advice specific to your circumstances.