United Arab Emirates Tax Residency

28 February 2017

Establishing tax residency in the UAE is good practice for the economically conscious person who is looking to enjoy an income and corporate tax-free environment, while taking advantage of the many double taxation treaties of which the UAE is party.

In becoming a UAE resident, not only can the individual (and often their immediate family) live and work in the UAE, they can reap such benefits as no personal income tax, no corporate tax, and no property or capital gains tax. Moreover, the UAE has the added advantage of being on the OECD white list.

Setting-up a UAE-based company (FZ) in one of the many free zones within the country will enable an individual to enjoy residency and receive, in the name of the business, a Tax Residency Certificate. The benefits of establishing a free zone company include 100% foreign ownership, complete exemption from income and corporate tax, exemption from exchange restrictions, and the ability to repatriate all profits, not to mention the advantages the UAE enjoys from the approximately 80 double taxation treaties it has signed.

In order to gain a Tax Residency Certificate, the requirements are as follows:

For the FZ:

  • • Trade license
  • • Rental agreement for the FZ’s offices, which must be physically based the UAE
  • • A letter from the company
  • • Bank statements from a local bank account for the last 6 months
  • • Audited accounts
  • • A copy of the Company Director’s passport
  • • Government fees of AED 5,000

For the individual:

  • • A copy of the individual’s passport
  • • A valid residence visa
  • • Bank statements from a local personal bank account for the last 6 months (it is advisable that the FZ pays a monthly salary to the individual)
  • • Letter from the individual
  • • Source of income with an attested certificate
  • • Certificate from the FZ stating the individual’s activity and sources of income
  • • Government fees of AED 1,000

Once the free zone company has been established and residency is set-up, there is no requirement for the individual to rent property or live in the country, however, in order to maintain residency, the individual must return to the country at least once every 6 months.

From start to finish, SFM can handle all company formation, bank account opening processes, and visa applications for you. Experts in such offshore business fields as estate planning; companies, trusts, and foundations; banking; and company and business law, SFM’s executive team are in the perfect position to offer personalised solutions to our clients, taking into account personal, fiscal, and financial requirements.

We offer turnkey solutions for all your corporate and bank account opening service requirements. To start the process today, contact us and receive free advice from one of our specialists or complete an online order form now.

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