Residency in UAE & Benefits of Living in Dubai 100% Tax Free
Contributed by Europe Emirates
13 June, 2018
Foreign workers have been drawn to Dubai, the major business and financial hub of the United Arab Emirates,in their millions for many years, drawn by the UAE's lack of taxes, its career and business opportunities, its year-round hot climate, and its cosmopolitanism.
Located at the eastern end of the Persian Gulf, Dubai is one of the seven emirates making up the UAE, the others being Abu Dhabi, Ajman, Fujairah, Ras Al Khaimah, Sharjah and Umm Al Quwain.
Thanks to the Government's economic diversification and low tax policies, there has been heavy private and public-sector investment in the economy. Consequently, the UAE has been transformed from a relatively unknown collection desert principalities to a thriving, modern economy with high standards of living. And Dubai is seen as the jewel in the UAE's crown.
The economy's high demand for skilled workers means that UAE is home to many nationalities from across the world, and expats now account for about 80 percent of Dubai's population of 2.4 million.
A fiscal oasis
One of the main attractions of living and working in Dubai – and in the UAE in general – is its lack of taxes. In Dubai, there is no personal income tax capital gains tax, social security contributions, withholding tax or many of the other taxes that are commonplace in major economies.
Likewise, most companies also do not pay tax on their income, with local banks and oil companies being the exception to the rule.Free zone companies are further protected from future tax policy changes under a guarantee that corporate income tax will not be introduced for a period of 50 years.
In spite of its lack of taxation, the United Arab Emirates has a large network of double tax avoidance treaties which includes many major economies such as China, France, Germany, India, and the United Kingdom.
Citizens from many countries can enter the UAE on a tourist visa and stay between 30 and 60 days, depending on their country of origin. Persons wishing to remain in the UAE beyond the expiry date of their tourist visa must apply for a residence permit, although this is a relatively quick and easy process.
To obtain a residence visa, a person must register for a National Identification card and undergo certain medical checks, principally a blood test. Since a residence permit allowsindividuals to then apply for a work permit, the authorities look for evidence of requisite skills and qualifications. Residence permits are also usually granted on the basis that applicants have secured an abode in the UAE, for example by producing a tenancy or lease agreement. However, in situations where an expat is taking up a job offer from an employer in the UAE, it is usually the responsibility of the company to apply for the necessary permits.
Expats can also obtain a visa by going down the property purchase route, and those buying real estate with a value exceeding AED1m (USD272,000) are automatically granted a three-year residence visa.
Once obtained, a residence visa, which is inserted into the passport of the holder, entitles a person to remain in the UAE for three years. There are no limitations on the number of times an expatcan apply to extend a residence visa, although the visa will be cancelled if they remain out of the UAE for longer than six months.
In a step hailed as a major step towards boosting the UAE's attractiveness to business people and talented foreign employees, in May 2018 the Government approved plans for a new 10-year residency visa aimed at investors and specialists in the fields of science and medicine. In addition, the Cabinet agreed a new five-year residency visa for students studying in the UAE, which can be extended to 10 years for students with exceptional ability.
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