Using a Passport as Collateral in the UAE: Legal Risks and Protections

For many expatriates in the UAE, financial obligations and lending arrangements are part of daily life. However, one practice that continues to surface—using passports as collateral—is both illegal and dangerous.

The Legal Prohibition

The UAE government treats a passport as a personal, non-transferable document belonging to the individual and their issuing country. Under Federal Law No. 6 of 1973 on Immigration and Residence, and reinforced by subsequent labour regulations, employers and lenders are forbidden from holding passports.

The Ministry of Human Resources and Emiratisation (MoHRE) has been clear: employers may collect passports temporarily for visa processing, but must return them immediately after. Any other retention, including for loans or debts, is unlawful.

Risks for Borrowers

Handing over a passport creates multiple vulnerabilities:

• Criminal liability: individuals participating in such arrangements could face fines or imprisonment.
  
  

• Exploitation: some lenders use passports as leverage to pressure repayment.
  
  

• Loss of autonomy: without a passport, everyday activities such as travel, official transactions, or even identity verification become impossible.
  
  

Safer Alternatives

The UAE legal system provides secure and transparent ways to manage financial obligations:

• Draft a written loan agreement with clear repayment terms.
  
  

• Offer legal forms of collateral such as real estate or movable assets.
  
  

• Always seek legal advice to ensure compliance with financial regulations.
  
  

Protecting Your Rights

Workers and residents are encouraged to take proactive steps:

• Do not surrender your passport under any circumstances except when legally required.
  
  

• Report violations: if a passport is withheld, complaints can be filed with MoHRE or relevant authorities.
  
  

• Engage a lawyer: legal professionals can help recover passports and advise on financial disputes.
  
  

Conclusion

The passport is not only a travel document—it is a lifeline to legal identity. Using it as collateral undermines personal rights and exposes both borrowers and lenders to legal consequences. By adhering to lawful practices and seeking professional guidance, residents can safeguard both their identity and financial security in the UAE.