Sending Money from UAE: The Expat Remittance Guide
The Remittance Landscape
The UAE is one of the world's largest remittance corridors. With over 8 million expats sending money to families across India, Philippines, Pakistan, Bangladesh, and dozens of other countries, the remittance industry is massive and competitive. This competition benefits you — there are more options to send money from the UAE than almost anywhere else. The key is understanding the true cost of each option, which goes beyond the advertised "zero fee" marketing.
Exchange Houses vs Banks vs Digital Services
Traditional exchange houses (Al Ansari, UAE Exchange/Unimoni, Lulu Exchange) are on every corner. They charge a flat fee (AED 10–25) plus a spread on the exchange rate (typically 0.5–1.5% below mid-market). Banks offer remittance services too, but rates are usually worse — banks prioritize convenience, not competitive forex. Digital services like Wise (formerly TransferWise), Remitly, and WorldRemit have disrupted the market by offering near-mid-market rates with transparent fees. For amounts over AED 1,000, digital services are often the cheapest option. For small, urgent transfers, a nearby exchange house might be more practical.
Understanding the True Cost
When an exchange house advertises "zero transfer fee," they're making money on the exchange rate spread. For example, if the mid-market rate for AED to INR is 22.50, the exchange house might give you 22.30 — that 0.2 INR per AED difference on a 5,000 AED transfer costs you 1,000 INR (about AED 44). Always compare the total amount your family receives, not just the advertised fee or rate. Use this calculator to check the mid-market rate, then compare what you'd actually get from different services. A "free transfer" that gives you a 1.5% worse rate on AED 5,000 costs you AED 75 — more than a service charging AED 15 with a 0.3% spread.
Best Times to Send
Currency rates fluctuate constantly, but there are patterns. Rates for popular remittance currencies (INR, PHP, PKR, BDT) tend to be slightly worse around the 25th–1st of each month when salary payments flood the exchange market. Mid-month (10th–20th) often offers marginally better rates. However, trying to time the market precisely is futile for most people — the difference is usually 0.1–0.3%. A better strategy: if you send money monthly, set up an auto-transfer through a digital service. Some services like Wise offer rate alerts — set a target rate and get notified when it's reached.
The AED-USD Peg
The UAE Dirham has been pegged to the US Dollar since 1997 at 1 USD = 3.6725 AED. This means AED↔USD conversions are essentially fixed — the exchange house spread is their only margin. However, since AED is pegged to USD, when the dollar strengthens globally, AED also strengthens against currencies like INR, EUR, and GBP. This has been a significant benefit for UAE expats during periods of dollar strength — your AED salary buys more in your home currency. Conversely, when the dollar weakens, your remittances lose value in non-USD terms.
Tax Implications
The UAE charges no tax on outward remittances — you can send as much as you want, as often as you want, without any tax deduction at the UAE end. However, you should be aware of receiving-country rules. India: family remittances are tax-free under Section 10 of the Income Tax Act, but amounts over INR 50 lakh (approximately AED 220,000) in a year may need to be reported. Philippines: OFW remittances are generally tax-exempt. Pakistan: no tax on inward remittances, and they actually help track foreign exchange reserves. Always check your home country's latest rules — they change frequently.
Practical Tips
Compare at least 3 services before each large transfer. Keep your recipients' bank details updated — failed transfers due to wrong account numbers cause delays and sometimes fee forfeitures. For regular monthly transfers, set up standing instructions — many exchange houses offer this. If you're transferring to a country with capital controls or an unstable currency (Nigeria, Egypt, Pakistan), check if the official rate actually matches what your family receives at their bank. Some countries have significant gaps between official and market rates. Finally, keep proof of all transfers — if you ever need to demonstrate source of funds for immigration or financial purposes, a clean paper trail is invaluable.