The United Arab Emirates’ (UAE) tax system is one of the most appealing aspects for business owners looking to move abroad.
To start with, unlike many countries, the UAE does not impose personal Income Tax.
This zero-Income Tax policy fundamentally means that you can retain a higher proportion of your earnings – which is always a great incentive.
On top of this, the UAE does not levy Capital Gains Tax on personal investments so you can buy and sell assets without losing significant proportions of the profits.
Also, in contrast to the UK, the UAE doesn’t impose an Inheritance Tax, making it an attractive destination for those looking to maximise the wealth they pass down to their families.
Other reasons to move to UAE
Beyond the tax advantages, Dubai, in the UAE, offers a very high standard of living.
The cost of living, while expensive, is often offset by the tax savings you’ll make by moving there but your tax adviser can help work this out for you in full.
Employment opportunities are numerous, but the real driver is the business environment which is favourable to entrepreneurial ventures.
Dubai’s modern infrastructure, safety, and amenities make it a desirable location for expatriates too!
How to capitalise on the UAE’s favourable regime
To benefit from the UAE’s favourable tax scheme, you must establish residency.
This typically involves obtaining a residence visa, which can be secured through employment, business setup, or property investment.
It’s crucial to meet the residency criteria to enjoy the full extent of the UAE’s tax advantages.
Here are the criteria for UAE residency for tax purposes:
- Spend at least 183 days in the UAE within a 12-month period.
- Have a permanent place of residence in the UAE, such as owning or renting property.
- Demonstrate a continuous presence in the UAE.
- Have significant economic interests or activities in the UAE, such as owning a business or employment.
- Maintain family connections in the UAE (e.g., spouse and children residing in the UAE).
- Register for UAE tax residency through the relevant authorities if required.
These do not all need to be met in full, but it helps to have multiple under your belt.
Before making the move, you’ll need to commit to some serious tax planning to ensure you can capitalise on the incentives.
Consulting with a tax professional who specialises in international matters and can provide personalised advice based on your individual circumstances will help with this.