If you’re living and working in Oman, it may be worth your while to open a local bank account. Salary transfers, day-to-day living and other financial transactions are all made easier if you’ve got easily accessible banking in your host nation. Oman is an attractive place to work, given its tax-free income status; but how do you go about opening an account? How easy is it?First of all, you need to be aware that this is not a completely straightforward process. Before you can open a bank account, you’ll need a residence visa. This proves that you have a right to be in Oman, but that you also need to get a ‘no objection’ letter from your employer. Ask your employer for a formal statement of your salary, as some banks want to see an amount paid regularly into your account. They may also want to see proof of tenancy and a copy of your passport, so take all of this documentation with you in person. It’s helpful to bring along some passport-sized photos too.
Expat residents report that if you’ve sent in the correct documentation, your new account should be opened in two to three working days.
Can My Family Open Accounts?
Yes, your spouse and adult children are eligible to open bank accounts in Oman, but you – as the main wage earner – are held to be their de facto sponsor.
Which Bank Should I Choose?
Oman is host to a wide variety of banks. The website expatarrivals.com recommends the Central Bank of Oman, Bank Dhofar, Bank Muscat, the National Bank of Oman and the Oman Arab Bank, but there are also a number of international banks in the country, many of which have multilingual staff, which may prove reassuring to you as an expat.
Should I Open An Offshore Account?
It might be worth looking at opening an offshore account for tax reasons. Most people who choose this option won’t be closing their accounts in their country of origin. However, talk to an accountant who has experience with international banking and to get advice for your particular situation. Many expats choose to move the bulk of their salaries offshore on a regular basis for tax purposes and to avoid any problems within their host country.
Oman does not impose income tax on expats, but you will be expected to contribute towards social security – if you’re employed, then your employer will be dealing with this anyway. Without all the deductions you would have in your host nation, your salary is your own to use as you wish. However, it makes sense to check out the situation with your home country’s tax authorities; some countries consider residents who work in Oman and other Gulf States to be subject to their own taxation.
Opening a multi-currency international account at your home bank before you head to Oman is also an option – some of these have attractive high interest savings options. Talk to your bank and see what services they provide in this area.
What Are The Benefits Of Banking In Oman?
Omani banks have all the standard procedures of modern banking such as ATM cards, PINs and so on. Some banks operate favorable terms for group accounts, so it’s worth checking whether you can open an account with your employer’s bank. This might also mean that you get your salary more quickly, as internal transfers tend to be faster than ones that take place between banks. Your employer may be able to send a letter to the bank asking for a ‘salary transfer’ account to be opened, for example.
Are There Any Disadvantages?
Oman largely runs on cash on a day-to-day basis, and people are suspicious of cheques. This is because Omani banks are not obliged to guarantee them, even though it’s a criminal offence to issue a cheque without sufficient funds. Public utilities might accept them, but individual retailers probably won’t. Be careful if you do write any cheques, as Arab names are often similar and banks might not be very helpful if you’ve sent a cheque to the wrong person! Expats also report that customer service can be poor – although to be fair, this can be a problem with any bank.
Check to see how much bank charges are – these can vary, meaning you will need to do a little cost-effectiveness analysis, as you would with banks in your home nation.
You should also check how long it takes for international cheques to be cleared once you put them into your account. Banks tend to have different waiting times. As an expat, you will most likely need a bank that will clear any overseas funds quickly. There were apparently significant problems when the merger between HSBC and OIB took place, with ATM cards suddenly failing to work, so it’s wise to do some reading into what state your potential bank is actually in. What’s their history? Are they planning any mergers with other banks?
Omani banks are conscious of abuses of their system, since the country has a large transient population, and punishments for breaches of financial regulations can be severe. Justlanded.com warns:
“It’s important to understand that expatriates are unlikely to receive much in the way of sympathy and understanding if they have financial difficulties while living in Oman, since their services in the country are viewed as expendable.”
Remember, Oman is a wealthy state, migrant turnover is high, and so is competition for jobs.
Finally, note that Oman’s taxation revenue comes primarily from business tax, so if you’re running a company, it may be subject to local taxation whether you’re a resident or not. It’s therefore important to check this out before you head out to this popular working destination.
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