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Tax-Free Residency in Dubai: How to Become a Resident and Enjoy Tax Benefits

Apr 17, 2024 | Dubai Tax Free

Dreaming of a life without taxes? Consider relocating to Dubai, the ultimate destination for tax benefits. Whether you’re an investor, student, professional, or remote worker, residency in Dubai can be accessed easily through flexible visa options.

How to Obtain Tax-Free Residency in Dubai and Enjoy Tax Benefits

Are you tired of hefty tax bills eating into your earnings? Dubai provides a compelling solution with its tax advantages and enticing lifestyle.

In this blog, we will delve into the pathways to residency in Dubai. As a global hub for business and innovation, this city offers various visa options catering to investors, professionals, students, and remote workers. 

Let’s dive in and discover how you can establish tax-free residency in Dubai and enjoy the benefits of tax-free living.

Residency in Dubai: Different Visa Options and How to Get Them

To establish residency in Dubai, there are various visa options available depending on your purpose of stay. These visas grant you the right to reside in Dubai for a specific period. Let’s explore each of these visa options in detail:

Employment Visa

Expatriates who begin working for a company in Dubai must obtain sponsorship from their employing organization. The employer is legally required to apply for the respective employee’s entry visa, work permit, and residency.

The residence permit duration is typically one or two years, depending on the employment contract.

Real Estate Visa

Purchasing real estate in Dubai can grant the buyer a residence permit. Under the UAE investor visa program, the property must be completed upon purchase, and its value must be at least AED 1 million.

Investor Visa

The Investor Visa in Dubai is available to foreigners who start a business or invest in an existing company.

This visa is granted to investors who either own shares worth a minimum of AED 72,000 in an existing company or are establishing a company with an equal capital investment.

The Investor Visa falls under the Golden Visa scheme, which offers a long-term visa for investors and their dependents, with additional requirements related to investment size and capital.

Remote Work Visa

Dubai has introduced a remote work visa to accommodate employees based outside the UAE who wish to relocate to Dubai.

The one-year renewable visa falls under the virtual working program, designed for individuals, start-ups, and entrepreneurs who meet specific eligibility criteria.

Employees must provide proof of employment with a contract valid for one year from their current employer, a minimum salary of USD 5,000 per month, and other supporting documents. 

Company owners must provide proof of company ownership for one year or more, an average monthly income of at least USD 5,000, and relevant financial statements.

Student Visa

Individuals who are 18 years old or above and enrol in a college or university in Dubai can qualify for a residence visa. The visa sponsorship can be provided either by the parents (for male students only) or by one of the recognized universities and colleges in Dubai.

Typically, the student visa is valid for one year, renewable upon submission of official proof of continuing education. Graduating university students with a distinction GPA of at least 3.75 can be granted a 5-year Golden Visa, which provides extended residency benefits.

Residency in Dubai: How to be a Tax Resident

The UAE has implemented new tax residency criteria for individuals, which determine an individual’s tax residency status for UAE tax laws and bilateral tax agreements. The criteria include:

  • Having a usual or primary place of residence and centre of financial and personal interests in the UAE.
  • Being physically present in the UAE for 183 days or more during a consecutive 12-month period.
  • Being physically present in the UAE for a period of 90 days or more in a consecutive 12-month period, and being a UAE national, holding a valid residence permit, or having the nationality of any GCC Member State, with a permanent place of residence or engaging in employment or business in the UAE.

The new tax residency definition provides clarity to individuals without subjecting them to personal income tax in the UAE. However, it helps determine tax residency positions under bilateral tax agreements, facilitating the issuance of tax residence certificates. 

Residency in Dubai: Tax Residency Certificate

Individuals demonstrating that they have spent at least 183 days in Dubai during the most recent tax year are eligible to obtain a tax residency certificate.

This certificate serves as proof of their tax residency status. It enables them to avoid double taxation on their earnings, especially for those from countries without a double tax treaty with the UAE.

An additional advantage of the Tax Residency Certificate is that it allows individuals and businesses to reclaim any taxes paid in the same year they moved to Dubai.

Issued by the Ministry of Finance, the Tax Residency Certificate remains valid for one year. 

Frequently Asked Questions

What is the cheapest way to get a residence visa in Dubai?

A freelance visa is the cheapest way to obtain a residence visa in Dubai. The cost of a freelance visa can vary depending on factors such as free zone regulations, visa duration (1 year or 3 years), and the nature of the business.

It can range from a minimum of AED 2,500 to a maximum of AED 20,000.

Is it easy to get permanent residency in Dubai?

Getting permanent residency in Dubai is relatively straightforward. Applicants need to meet specific income requirements, such as a minimum monthly income of 3,000 AED if the employer provides an accommodation or 4,000 AED if they own their property.

Meeting these criteria can make individuals eligible for a UAE PR visa.

Can a friend sponsor me to Dubai?

Yes, a friend can sponsor you to Dubai if you apply for a UAE Visa. Your sponsor can be a family member, colleague, or friend, making the process easier.

If you have no personal connections, an airline, hotel, or travel agency can also act as your sponsor.

Conclusion

With various visa options available, individuals from different backgrounds can establish residency in Dubai. By taking advantage of these options, individuals benefit from the tax advantages offered by the city to its residents.

Consult with Sterlinx Global for further business and tax advice.

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