There are countries in the world (in fact, its number is extremely small) that provide tax benefits for wealthy individuals. Once reaching some certain standards of living, you will probably start thinking about how to minimize the tax burden of your revenues. To make a decision, it is necessary to analyse all the available options in details and choose one that is the most suitable for your aims.
As our company is specialized in the United Arab Emirates, in our review we will study in details practical benefits of the UAE when changing fiscal residence by migrating here and will compare the UAE to alternative options.
First of all what benefits does the change of your current local fiscal residency to Dubai, the UAE provide? It is a complete exemption from all income taxes. Let us emphasize the fact that you are exempted absolutely from ALL taxes.
At the same time, this state is not a special regulation for a definite category of especially wealthy people, but it is a general regulation of the country that applies to all the UAE residents. And that is the first significant difference of the UAE from alternatives we are analysing.
Great Britain — gives a residency status of a not domiciled resident who is exempted from taxes. However, at the same time, to get this status you must first make significant investments and the confirmation of available money in the amount of at least 5 million pounds sterling. The second point is that your status in UK is changed after 7 years of being fiscal resident as a not domiciled resident and you must pay taxes in accordance with the recent changes in tax law in Great Britain.
Switzerland – If you choose this country for fiscal residence, you will pay taxes too. It will be less than in your country, but you pay them anyway. The tax amount depends on canton you live in.
Monaco — that was so extremely attractive before, but it is not a perfect place any longer. First of all, there is a significantly smaller number of double taxation treaties in Monaco, than in the UAE. Secondly, your residency in Monaco automatically attracts greater attention to you from your country’s tax authorities, as for no foreign residents do their business in Monaco. That means that you use the country purposely for private tax income optimization. In their turn, United Arab Emirates is a major business-hub and you can easily reason your living in Dubai by business purposes.
Taking into account all the Emirates’ advantages listed above, it is technically not complicated to get a residence permit, migrate to the UAE and respectively change the fiscal residence. If the process of getting a residence permit in three alternative countries such as Great Britain, Switzerland and Monaco is quite complicated, expensive and linked with a high likelihood of getting a refusal, getting of residence permit in the UAE is significantly simpler and faster. At the same time, rejections are rather rare in the UAE and happen only when you committed major law violations on the territory of the country.
The very important difference of the UAE from the alternatives listed above is the fact that exemption from taxes extends not only to you as a natural person, but also to company, which you can open and operate in this country. No other alternative country by definition offers such an option.
If you are a fiscal resident of Dubai, it is not obligatory for you to live in the country all the time for your residence permit being valid here. It will be sufficient to come to the country once every 180 days. Essentially it is the main rule to keep the residence permit. Upon obtaining the resident visa in the UAE, you have also a possibility to get a fiscal resident certificate.
If you have doubts, all that you need is just to come to Dubai and see everything yourself. You will see the absolutely comfortable and safe city where practically 90 per cent of citizens are foreigners! That is exactly the strongest proof of Dubai attractiveness as a place that is very inviting for living and changing your fiscal residency.