UAE TAX RESIDENCY

What are the advantages of getting tax a residency certificate in the UAE? In this article, we will detail who and how can apply for tax residency and all the required steps.

The UAE is strategically located at the crossroads of Europe, Asia, and Africa, making it
easy to reach the world’s fastest expanding emerging markets. The UAE swiftly became
one of the most competitive corporate hubs in the world due to its strategic position,
sophisticated infrastructure, and exceptional financial environment.

For decades, the country’s wealth was not only based on oil, as is commonly supposed.
For example, in Dubai, income from oil and oil-related businesses accounts for less than
10% of GDP.
Dubai offers great flight links to virtually every country on the planet.
Companies in the UAE pay no corporation taxes and no withholding taxes. If a UAE
company does local business, 5% VAT is levied on most goods and services, with an
additional tax levied on specified product groups such as cigarettes, alcoholic beverages,
and sugared beverages.
Individuals who are fiscal residents of the UAE benefit from zero percent income tax,
zero percent wealth tax, and zero percent dividend tax. There are no capital limitations
in the UAE.

In the UAE, companies can be formed as Onshore Companies (also known as Mainland
Companies), Freezone Companies, or Offshore Companies. Please keep in mind that
offshore corporations are not eligible for residence visas (also known as investor visas)
and so are not eligible for fiscal residence.

There are three distinct eligibility conditions for residence visas and thus fiscalresidency:

• Forming a Freezone corporation, or
• Forming an onshore firm, or
• Real estate investment of more than AED 1 million (about $270,000)
  

Some of its advantages include:

• 0% income, corporate, and wealth taxation;
• 100% foreign ownership;
• 100% repatriation of profits and capital;
• 81 double taxation treaties

Taxation can be avoided with a tax resident certificate in Dubai and the added benefit of
a future double taxation treaty. A Tax Residency Certificate (TRC) is available to any
company that has been operating in the country for at least a year on the mainland or in
a free zone. The applicant must stay in the UAE for 183 days in order to get a Tax
Certificate. Generally, tax certificates are given within five working days.

• Dubai Tax Residency Certificate Validity

The tax residence certificate in Dubai is valid for one year from the date of issuing.
Corporations and individuals can use the Tax Residency Certificate, often known as the
TRC Dubai. Depending on the circumstances, further certificate applications may be
submitted.
Offshore corporations cannot obtain tax residence certificates; thus, they must obtain a
tax exemption certificate.

• for Individuals

To apply for a tax residency certificate in the UAE, individuals must supply the following
papers.

• Certificate of Salary (In case the Applicant is an employee)
• Copy of the Company’s License (In case the applicant owns a Company in UAE
  wherein the name of the applicant appears)
• A bank statement from the past six months has been confirmed.
• A certified copy of the (residential) lease agreement or tenancy contract
• You must bring a copy of your passport, your UAE residency visa, and your
  Emirates ID.
• The UAE’s General Directorate of Residency and Foreign Affairs (GDRFA) has
  produced a report that tracks all entry and exit points.

• Incorporation of a Free Zone firm
• Incorporation of an Onshore company or,
• Or investment in real estate (worth more than AED 750,000)

The final proof of residency is the Tax Residency Certificate. It is a document issued by
the Ministry of Finance verifying that an entity or individual holds the status of tax
resident in the UAE and is eligible to use the UAE-specific Double Taxation Agreements.

UAE TAX RESIDENCY 

Simge Ayse Pala LLBs

All rights reserved. All rights of the UAE TAX RESIDENCY article belong to Gurcan Partners International Law Firm. The author has no responsibility for the information in this article. This article is prepared just to inform.

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