Obtaining tax residency in the UAE: a detailed guide

The modern global economy requires flexible financial planning strategies, and finding optimal tax solutions becomes essential in this context. One such strategic choice is to obtain tax residency in countries with favorable tax regimes. The UAE, with its stable economy and innovative approach to financial policy, attracts the attention of many entrepreneurs and investors for precisely such purposes.

In this article, we will provide a detailed overview of the procedures for obtaining tax residency in the UAE. We will analyze the criteria, required documents, and essential details for individuals and legal entities and also consider the advantages accompanying the status of a tax resident of the UAE.

Advantages of tax residence in the Emirates

• The UAE does not impose income tax on wages, dividends, interest, or other types of income earned outside the country.
• The Emirates has one of the lowest corporate tax rates in the world – 9% on company profits exceeding 375,000 dirhams (100,000 USD ) per year.
• There is no inheritance tax in the UAE, which means assets can be passed on to heirs tax-free.
• The UAE does not participate in the Automatic Exchange of Tax Information ( AETI ), which ensures the privacy of your financial information.
• Tax residency makes it easier to open and maintain bank accounts in the UAE.
• UAE residents have access to high-quality medicine and education.
• tax residency can make doing business in the country easier.
• The UAE is a safe and stable country with a low crime rate and a high standard of living.

As such, the UAE can become an attractive place to live for people who want to minimize their tax liability, improve their lifestyle, and secure their family’s future.

Who can obtain tax resident status in the UAE?

Tax resident status in the UAE can be obtained by both individuals and legal entities that meet specific criteria specified in local legislation.

Tax residency in the UAE for individuals:

• Working and living in the UAE

Individuals for whom the UAE is their usual or principal place of residence, as well as the center of financial and personal interests, can apply for tax resident status in the Emirates. To do this, a person must carry out his daily lifestyle and spend the majority of his time in the UAE compared to any other jurisdiction. To obtain residency according to this criterion, indicators such as place of work, family and social connections, and cultural or everyday activities will be taken into account.

• Long stay in the UAE

Individuals staying in the UAE for at least 183 days within 12 consecutive months can also apply for residency.

• Special conditions

For those who have been in the UAE for less than 183 days, an alternative option is also possible to obtain the status of a resident of the United Arab Emirates. Thus, persons physically present in the UAE for at least 90 days within 12 consecutive months, subject to citizenship or possession of a valid UAE residence permit or citizenship of the Arab Gulf countries (Bahrain, Qatar, Kuwait, UAE, Oman, and Saudi Arabia) can receive tax residency _ But, such persons must also meet one of the following criteria:

1. Have a permanent residence in the UAE (it is not necessary to have your own home; long-term rent is also taken into account).
2. Work for hire or conduct business in the UAE (hired employment under a contract can be part-time).

Tax residency in the UAE for legal entities

With companies, the criteria for recognition as tax residents is much simpler, there are only two ways:

• Companies registered or recognized in the UAE

Legal entities (except branches) formed or recognized by the current legislation of the UAE become tax residents. However, it is worth considering that a company can receive a tax resident certificate only after one year of existence.

• Tax Compliance

Legal entities that comply with the tax laws in force in the UAE are also recognized as tax residents.

How to obtain a UAE tax residence certificate?

To obtain a tax resident certificate in the United Arab Emirates, you must follow specific steps and provide documents to meet the requirements of the UAE tax authorities:

Step 1: Preparing documents

For individuals, you will need to provide the following:

• Identification documents (passports).
• Valid residence permit/visa
• Emirates ID
• A certified copy of the lease agreement or property document
• Income confirmation
• Bank statement for the last six months
• Entry and exit report
• Certificate of no criminal record

For legal entities, you need the following:

• License to operate
• Agreement on the establishment of an organization
• Statements on the structure and ownership of the company
• Financial statements certified by an audit firm
• Bank statement for the last six months
• Certified copy of the articles of association (if available)

Step 2: Online application and payment of the fee

An application for a tax resident certificate, along with the above documents, is submitted through a unique online portal of the UAE Tax Service. To process the application and issue a tax resident certificate, an administrative fee must be paid. Typically, this fee is AED 500.

Step 3: Review of application and receipt of the certificate

Once the application is submitted, the UAE tax authorities will review the documents and information provided by the applicant. After completing the application review process and confirming compliance with the tax residency criteria, a tax resident certificate is issued to the applicant in electronic form, but upon request, you can also additionally receive a paper certificate (it will take about another month to produce it). Using a paper form requires official certification from the UAE Ministry of Foreign Affairs.

The Tax Residency Certificate confirms tax residency status in the UAE and can be used in various legal and financial transactions, as well as to obtain tax benefits and benefits provided by the UAE.

The received tax resident certificate in the United Arab Emirates (UAE) is valid for one year. After this period, it can be renewed by documenting the retention of tax resident status.

To successfully obtain a tax resident certificate or create a business in the UAE, it is recommended to contact experienced lawyers specializing in international law and tax practice. Legal support will help you meet all requirements accurately and ensure that your interests are protected, ensuring a successful and stress-free experience in the UAE.