Tax resident status in the UAE

Receive income tax-free, use international treaties to avoid double taxation,
keep personal information and asset ownership confidential

Presentational image for an article

UAE legislation acts as an effective and reliable tool for optimizing taxes and international business. It works extremely well for both individuals and companies once the basic requirements to qualify are met. UAE tax residency is available to anyone in any country and has no adverse legal consquences.

UAE tax residency opens up a wide range of opportunities for business

Application of treaties for avoiding double taxation

Application of preferential tax rates on certain types of income under agreements between the UAE and other countries

Protection against automatic exchange
of tax information

Maintaining the confidentiality of information on accounts opened with banks and financial institutions in the UAE and abroad

Concealment of information about owners and assets

Protection of information on ownership of real estate and assets based on legitimate mechanisms provided under UAE law

Earning income worldwide without paying taxes

Profits derived from international activities of legal entities and individuals are not taxed in the Emirates and can be freely withdrawn

Withdrawal of
dividends without tax deduction

The distribution between shareholders
of the aggregate income received from global sources is not taxable in the UAE

Business command
and control center confirmation

Using tax resident status to ensure adequate compliance with requirements of the UAE’s Economic Substance Regulations (ESR)

Conditions for obtaining tax resident status in the United Arab Emirates

Residing in the UAE

To obtain tax resident status you need
to reside in the UAE for more than
180 days a year

Resident visa

Individuals, including shareholders or
company management, are required to
obtain a resident visa

Residence address

For an individual, confirmation of
employment and actual place of
residence in the UAE are required

Control center

A legal entity requires a physical
office as well as administrative staff

Source of income

Permanent income derived from a
source in the UAE must be proven

Age of company

A legal entity must be have been
incorporated for at least one year


Stages of registration for
UAE tax resident status

  • Registration of a resident visa

    Non-investment in nature, according to OECD classification, and achieved by incorporating an onshore company in the UAE and passing simple immigration procedures

  • Proof of residential address

    Prove actual presence in the UAE by providing a lease contract or certificate of ownership, utility bills, etc.

  • Proof of income in the UAE

    Open a bank account protected from exchange of tax information to receive funds as salaries, dividends, etc.

  • Provide documents confirming status

    After 5-6 months, SORP Group specialists will prepare the required package of documents and issue a UAE tax resident certificate based on regular transactions on a personal bank account.

  • Confirmation of the age of the legal entity

    An onshore company may apply for tax resident status 12 months after incorporation, or when a company is acquired that has existed for more than a year.

  • Confirmation of feasibile economic presence

    Having a corporate bank account in the UAE and conducting regular transactions for at least 6 months, which must be confirmed by a statement from a financial institution.

  • Audit report

    Preparation of audit reports for the last financial reporting year by a company incorporated in the Emirates, for subsequent submission to the Ministry of Finance

  • Obtaining a tax resident certificate

    After one year of trading activity and regular transactions against the corporate bank account, you will need to prepare a package of documents for applying for a certificate of UAE tax residency

SORP solutions for registration of tax residency status in the UAE

Incorporation and licensing

We choose a business license and
form of legal entity, and incorporate
a local or free zone company

Registration of residency

Guards against automatic exchange
of tax information when performing
UAE banking operations

Opening bank accounts

Use our close cooperation with UAE
banks, understanding of procedures
and assistance in passing KYC

New rules are in place since 2018 for the automatic exchange of tax information between jurisdictions under the provisions of the Common Reporting Standard (CRS). Automatic information exchange takes place between the tax authorities of an individual’s country of tax residency and the country of citizenship if a bank audit raises suspicions about the origin of funds owned by tax residents of a foreign country. SORP experts recommend obtaining a secure bank account and non-investment visas as categorized by the OECD.


How to confirm your UAE tax resident status

For a legal entity

In order to confirm personal status
as a tax resident, the following
solutions are available:

  • Business Certificate

    After registering for VAT, receiving a Tax Registration Number and a business license
  • Status of business certificate

    With a valid business license and confirmation of the physical location of the company (lease agreement)
  • Tax domicile certified by Federal Tax Authority

    After a year of successful activity, certified by an audit and an income stream earned in the UAE
  • Economic Substance Report: Ministry of Finance

    Confirming economic presence in the UAE, a management decision center, business address and actively trading
  • Tax advisor certificate

    After opening a current account and concluding a service agreement with a Tax Advisory consultancy

For an individual

In order to confirm personal status
as a tax resident, the following
solutions are available:

  • Residence permit

    On a non-investment basis, obtained for example through formal employment or business ownership in the UAE
  • Center of vital interests

    Documentary evidence of housing availability, confirmation of contact information
  • Tax domicile certified by Federal Tax Authority

    Not earlier than 6 months after receiving the first income in the UAE
  • Economic Substance for an individual

    Confirm employment in the UAE through labor relations or owning a business with a permanent corporate address
  • Tax advisor certificate

    After opening a current account and concluding a service agreement with a Tax Advisory consultancy

SORP Group comprehensive solutions in the field of tax residency

International
tax planning

Individual solutions to improve the efficiency of all tax optimization schemes for international business based on UAE legislation and our expertise from successful cases

PRO
support

We represent your interests with all government agencies, issue resident visas to partners, staff and their families, and renew permits, licenses and registrations

Obtaining
tax domicile

Obtaining resident visas that are not investment in nature, with the provision of all procedures needed to obtain a tax domicile certificate in the UAE

Confirmation of
economic presence
in the UAE

We prove that operational activities occur at place of incorporation, the presence of a control center in the UAE, and that tax is paid in the UAE

Nominee
service
tools

We will provide a limited nominee director and shareholder to enable transfer pricing and conceal details of the true company beneficiaries

Confirmation of
the center of vital
interests in the UAE

We confirm the existence of an active UAE company and identify the main business processes that occur at its place of incorporation


SORP provides a full range of services for incorporation and business management

International standards

Confidential legal solutions for tax optimization, beneficiary concealment and protection from automatic information exchange under CRS. Support with obtaining Tax Residency certificate in the UAE.

Professional specialization

We have expertise across all market sectors and the tools to tackle complex issues. Our portfolio contains many success stories for obtaining special business licenses for our clients

Comprehensive service

We provide a wide range of valuable outsourced services and tools in the UAE - from advising on acquiring a business to accounting and drafting legal documents and contracts

SORP business center

5,000 square meters (54,000 sq. ft.) of modern office space for rent in a prestigious location in Dubai to accommodate staff, undergo bank checks and confirm economic presence in the UAE

15 years of successful work

We incorporate companies, oversee investment projects, open bank accounts and offer high-quality business support to accelerate your success in the UAE

Strategic partnerships

Procurement of state licenses and accreditation helped by long-standing relationships with relevant departments. Close cooperation with FTA guarantees successful pass of checks while obtaining TRC (tax residency certificate) in Dubai.



Contact us on WhatsApp