Business | Your Money

Research can keep you out of trouble

Migrating to another country can spring many surprises as former UAE residents have discovered

  • By Gaurav Ghose, Financial Features Editor
  • Published: 00:00 March 5, 2011
  • Gulf News

People Queuing at Airport Security
  • Image Credit: Supplied
  • The process of migrating to a new country can spring surprises.

Dubai: The idea of moving to Australia was an unexpected one for Regi Varghese and his wife Shanthi, then a nurse in Sharjah.

In June 2007, while on holiday in Kerala, India, they came across a newspaper advertisement for a seminar on opportunities for nurses to migrate to Australia. Varghese literally dragged his wife there.

They were hesitant to take the leap, thinking they did not have the financial ability to cover the move and was unprepared to cope with the hassle of relocating to a new country with two children.

With the recession setting in around the world in the latter half of the year, the couple decided to take the plunge. Things moved fast and Shanthi quit her well-paying job at the American University of Sharjah in December.

There was a not-so-pleasant surprise for the family as they finalised their move. Shanthi had to move first, to do a five month "Bridging Programme" at Charles Darwin University in Darwin to register as a nurse before she could work. Their children, a boy and a girl then aged 8 years and 2 years, were sent back to their families in Kerala.

Surprises

Meanwhile Regi stayed back in Dubai to continue freelancing to support his wife and kids.

The process of migrating to a new country can spring surprises, as Varghese and his family discovered.

Experts and other migrants advise careful planning to make the departure as well as arrival in a new country less worrisome, both financially and legally. But even after intensive planning, issues crop up that could delay the process and cost a lot.

After spending 11 years working in Dubai, 40-year old Varghese said, they didn't have much savings, only enough to pay for her programme course and initial expenses. To make things worse he had quit his regular job in a newspaper in Dubai and was doing freelance which "was not going great to be honest".

Before leaving Dubai, he had only to close his bank accounts. He did not have any other commitments in the form of investments or credit card debt. In fact he did not have a credit card while in Dubai.

Within a week after arriving in Darwin with his children, Varghese got a job with a leading newspaper. But he said, the savings he carried covered the initial expenses of renting a house in a decent neighbourhood, a car, and day-to-day living. The fact that he and his wife had confirmed jobs made a big difference to their life as newly arrived residents of Darwin.

"So my advice to people who want to migrate would be to do research on the place they are moving to — cost of living, whether it's a good idea to buy or rent, prices in different neighbourhoods, car prices, and accordingly have enough cash to cover such necessities," Varghese said.

His research revealed Darwin is one of the most expensive cities, specifically property prices — buying or renting — in the country after Sydney.

Unlike Varghese, Syed Hussain (name changed), another media professional who moved to Canada late last year after living in Dubai for 12 years, planned everything to the last detail. A financial adviser was not much help, but his Canadian lawyer was, especially on issues on his newly adopted country.

"An urgency on your part does not mean an urgency on the part of the banks, government departments," he said in an email. "So don't leave anything to the last minute. Many last minute things crop up that you have not even anticipated and you will end up panicking."

Hussain's wife and child left for Toronto before him but he had not cancelled their UAE visas. When he decided to leave, he could not cancel his visa before he did theirs.

"It was a hassle and unexpected. Luckily I had a DIFC [Dubai International Financial Centre] visa and was allowed to cancel everyone's visa, but it cost me at least twice what it should have," Hussain said.

He tried to sell his car at least 45 days before he left by placing an advertisement on a popular website. "I sold my Nissan Xtrail for Dh8,000 more than if I had sold it quickly to these car dealers," he said.

His experience with banks was mixed. Surprise was in store with regard to an exit plan with one of his banks in Dubai, which is a global name with headquarters in London.

While in Dubai, he held a premier service account which is supposed to be able to transfer money with no fuss anywhere the bank has a branch. It turned out that he had to get a separate Canada account and it would take weeks.

"By the way, the bank's Canada operation does not recognise its UAE operation as part of the same group," Hussain wrote in his email. He didn't get that bank's account eventually. It was not worth it and they are an expensive bank with few branches in Canada, he added. He found local Canadian banks which offer facilities for new immigrants.

"I had opened an account a year before when I had gone to Canada for a visit, so I just transferred the money. It was quite a painless process with Emirates NBD Bank [on the UAE side]."

He had a mutual fund with another bank's securities unit and the first advice that he got from them was to sell it before he left, "which was laughable."

"I managed to convince them that I did not want to sell when the mutual fund was down around 40 per cent."

Eventually, Hussain found the right person within the bank who said he could continue to have the account as long as he kept it active.

"Give yourself plenty of time so that you can do the legwork and get to the correct person and answer," he said.

"If you are making a life-altering decision to move lock, stock and barrel, then there is no excuse not to get the most information available that you possibly can, especially about the country you are moving to. That does not mean that you will not make mistakes, but at least it reduces them."

There were several financial issues Hussain had to deal with as he settled down in his new home. He had to buy a car for cash because nobody was willing to give him a loan.

"Car insurance is what kills you in Canada," he wrote. "Moral of the story: save and prepare."

Taxation

Initially he paid $600 (Dh2,203.51) a month for a second-hand five-year-old car, "which was ridiculous." That is because a new immigrant is seen as a "fresh driver with no North American experience."

He didn't face any problem getting a credit card. He settled for a small credit limit to get going as Canadian authorities do not recognise any credit history from the UAE.

"It is a vicious cycle: You don't have credit history so you don't get a credit card and because you don't have a credit card, you can't build your credit history."

After living in the UAE, the issue of taxation could be a culture shock for some. "Mentally prepare yourself to pay taxes," Hussain said. Most Western countries have websites to help navigate through taxation issues.

"For the first year, get somebody's help to do your taxes, but try to get the hang of it and do them yourself after that," he wrote. "There are many legal ways to reduce your taxes and use tax credits to your advantage."

He got access to government health coverage within three months of applying.

"Hospitals take care of you regardless — it is among the good things about Canada," he said.

"Sure, the schools are free and so is much of the health care, but then your income is reduced close to 30 per cent because of taxes. It all comes out in the wash.

"So if you don't have a year's worth of savings, you are asking for trouble. Unless you have a desperate need to move and migrate, don't do it till you have substantial savings under your belt," Hussain advised.

For Varghese, having to pay taxes for the first time was never an issue.

"Everyone does it and you get Medicare cover and school for no extra cost. I personally feel it is a good thing," he said.

No matter how much planning goes behind it, migration is tough emotionally, too.

"Settling in to a different climate, different country, differences in way they bank, conduct business, makes it especially taxing.

"You need to be certain why you moved in the first place," Hussain said.

Have your say

Do you know someone who migrated to a foreign land? How easy or difficult was the
transition? Did they face financial setbacks? How did they cope?

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