UAE Tax Residence

Tax Residence in United Arab Emirates

A tax residency certificate may be useful to an individual who wish to designate a particular jurisdiction as their tax residence. Tax Residency Certificate in the United Arab Emirates (UAE) is a document that confirms your status as a tax resident of Dubai or other UAE Emirate and can be assigned to either individuals or enterprises. This encompasses a series of privileges that in turn promote the success of your business. There are three ways to obtain an UAE individual residence certificate: through an employment contract, by purchasing a property, or by registering a free trade zone company. The most popular way to become a resident of UAE, is to register a free trade zone (FTZ) company; in this way, foreign individuals can, first obtain residence permit, and then receive tax residency certificate. Such a certificate is recognized by authorities and banking institutions in UAE and outside.  

An UAE FTZ entity offers many business possibilities

FTZ entities give unique opportunities to international business. There is no personal income tax in the UAE (except for real estate income tax which comprises 5% of rental income, and the 5% VAT, which is in force since 2018). Neither are there income or corporate taxes to companies located in the UAE. Besides, a network of about eighty Double Tax Treaties is available. The UAE is a white listed jurisdiction, with world class logistics and IT infrastructure, an well established international financial centre, and a strategic location on the trade routes of east and west, that open for your business a horizon of opportunities. Locating business functions in Dubai FTZ satisfy substance requirements, as demanded by worldwide tax authorities, 100 percent foreign ownership is allowed, no exchange restrictions, free profit repatriation, and a 15-50 years guarantee against eventual imposition of corporation tax. Import of goods, not supplied to the local market, is duty free. UAE provides excellent educational institutions, a chance for getting visas for all family members, with the right to move freely in the Gulf States, and a distinguished and unique lifestyle in a peaceful and prosperous region.

Tax Residency Certificate for individuals

A person applying for the tax residency certificate in UAE should obtain the residence visa firs. Non-residents cannot apply. It is required to have stayed in the UAE for at least 180 days, and either to purchase real estate on the territory of UAE or to register a company in the Emirates.
Documents required for individual Tax Residency Certificate:
  • Request letter from the individual
  • Copy of passport, ID card, and valid permit of residence Certified copy of residential lease agreement
  • Validated 6-month bank statement from a local bank
  • Salary certificate from the employer company stating the individual activity and source of income
  • Report from the General Directorate of Residency and Foreigners Affairs specifying duration of stay and your trips to the UAE
  • Tax collection forms (if any) from the country where the certificate needs to be submitted.

Tax Residency Certificate for companies

A FTZ company must have a physical presence in the UAE, in that respect, it must own or hire premises. If only a small office is required, there are cost effective options known as “flexi desks” or “flexi offices”. Companies applying for a tax residency certificate should have functioned in the UAE for minimum one year, the company’s CEO has to be resident of the UAE, and the company must be a non-offshore one (in the case of offshores, there exists the certificate of tax exemption, which differs from the certificate of a tax residency, though it liberates you from a number of taxes, but does not confirm the tax residence of the company).
Documents required for company Tax Residency Certificate:
  • Copy of the trade license and partners’ attachment
  • Establishment contract certified by authorities, and the organisational structure of the company
  • Copy of the company’s owners/partners/directors’ passports, IDs and permits of residence
  • Certified copy of the audited financial accounts
  • Validated 6-month bank statement
  • Certified copy of lease agreement.

Globo Consulting all round assistance

With proper assistance the procedure is straightforward. Globo Consulting will help you in preparing and filing all necessary documentation, advice on benefits your particular company could derive from tax treaties, avoiding double taxation, choosing the most appropriate FTZ (among the various available in UAE), and so on. Get in touch with our consultants and we will provide an all round assistance on the obtaining of the permanent visa and the tax residence certificate. Should be noted that tax residence does not automatically mean that the authorities of other countries will accept it. If you have business in certain countries, the government of that country could still impose taxes on your enterprise. It will take about 6 months before you can start the process to obtain the certificate. Nevertheless, if respective documents are available, the period of previous stays can be taken into account retrospectively when issuing residence status confirmation

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