In recent years, tax residence issues have become very important when dealing with tax declarations for the government, banks and tax offices. Obtaining tax resident status in the UAE has grown in popularity for several reasons:
The UAE is set to join the Common Reporting Standard (CRS) later than most other countries — starting from 2018.
There are generally no taxes for corporate and private residents in the UAE on trading income, dividends, investments, bonds, etc.
The UAE offers vast opportunities for international businesses; companies are easy to incorporate and can be managed effectively.
Confiduss' professional team can help you acquire tax residence in the UAE, with all the associated legal benefits. Saving you time and money is our number-one priority, so call us now to get a free consultation or apply for UAE tax residence.
Who can apply for tax resident status in the UAE?
A UAE tax residence certificate can be issued to an onshore company or a private individual, but you will need to become a UAE resident first. This can be achieved in one of the following ways:
You can register a company in your name. There are no requirements for this company to participate in active trading; basically, its main purpose is to support your tax residence status. This status is maintained on the basis of the onshore company, which must be renewed yearly.
You can buy real estate in the UAE worth over one million dirhams. The owner(s) must be a single private individual or a married couple. If there is more than one owner (or if the marriage of the couple is not officially registered), than each person must invest one million dirhams in the property. Our package offer includes applications for a residence visa with the option of annual renewal.
UAE onshore companies
Company incorporation in the UAE is fairly straightforward, and proven to be a great vehicle for international trading as well as for holding dividends and interest. A company set up for tax residence purposes cannot just be a shell, and you must maintain some turnover on the corporate bank account.
Note that only onshore free-zone companies in the UAE can be considered for tax residence purposes. Therefore, Ras Al Khaimah companies will not be of use in this respect.
If you decide to set up your onshore company in a free zone, consider the Umm al-Quwain free zone: unlike many others, it has no requirements for share capital or for statutory accounting and audit. As in all onshore UAE free zones, your company will require a special licence, depending on the type of activity you plan to carry out. An onshore company must also have a rented office — this service is included in our company package.
Obtaining a tax residence certificate: the process
UAE tax residence certificate acquisition can be separated into the following major steps:
set up an onshore company
obtain a residence visa
open a private bank account
receive the tax residence certificate
As soon as you have been granted tax resident status in the UAE, you can apply for the tax residence certificate. The certificate is issued either within six or nine months from the date on which you received your residence visa. You will be asked to present your private bank statement for the last six or nine months. Your bank account must be active, with a positive balance, and transactions must pass through the account regularly. The immigration authorities will also check whether you have entered the UAE at least three or four times during the last six months using your residence visa.
Note that the tax residence certificate is only valid if you have a UAE residence visa. It is issued for a period of one year and renewed annually. However, you do not have to order new certificate each year if you do not need one.
