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Obtaining tax residence in UAE

According to the Guidance Notes for the Common Reporting Standard (CRS) tax resident of the UAE is:

1) A natural person of whichever nationality with a valid Emirates ID and residential visa in the UAE;

2) A legal entity that is incorporated, managed and controlled from the territory of the UAE.

Photo 1 - Obtaining tax residence in UAE

WHO CAN APPLY FOR THE UAE RESIDENCY STATUS:

  • co-founders (shareholders) of UAE companies  (available only for onshore companies established in Free Economic Zones and local companies. For offshore companies in the UAE, resident status cannot  be provided);
  • for employees of UAE companies who are employed under employment agreement;
  • for investors in real estate in the UAE with a value of 1 000 000 AED (about 274 000 USD).

 

A more advantageous option for obtaining residency is the establishment of a company, since in this case the resident visa shall be renewed once per 2-3 years (in case of buying real estate, the visa shall be renewed annually).

BENEFITS FROM OBTAINING THE UNITED ARAB EMIRATES RESIDENCE:

  • no need to live in the Emirates for 181 or more days a year for maintaining the UAE resident status, it is required to enter the jurisdiction at least once in 180 days;
  • in the Emirates there is no exchange of information about tax residents within the framework of the CRS;
  • possibility to open accounts in financial institutions of the country;
  • possibility to rent real estate for private or business purposes;
  • "relaxed" taxation (tax residents of the UAE are almost completely exempt from paying taxes);
  • possibility to obtain resident visas for all family members;
  • an attractive investment climate;
  • well-developed infrastructure of the state.
Photo 2 - Obtaining tax residence in UAE

HOW TO GET THE UAE RESIDENCY STATUS:

  • establish a company in the UAE and grounding on it obtain a resident visa and Emirates ID;
  • upon the expiration of 6 months after acquiring a resident visa - obtain a certificate of tax residence (in addition, it is required to provide rental agreement in the Emirates).
  • all new and existing entities shall register in the “E-channel” system;
  •  a Police Clearance Certificate is required (the certificate is issued at the place of residence and is certified to the level of the UAE Embassy in the issuing country and the UAE Ministry of Foreign Affairs).

TAX RESIDENCE CERTIFICATE TO AVOID DOUBLE TAXATION

The Certificate is an official certificate of the Ministry of Finance of the UAE, which is issued to individuals and legal entities, recognized by the authorities of the UAE and exempts a person from paying taxes in the state of one’s permanent residence (not the UAE) in case the Emirates and this state have entered into a bilateral The Double Taxation Avoidance Agreement. As of today, the UAE has concluded similar agreements with more than 90 countries, including Ukraine.

So, being a tax resident of the Emirates, all income/profits of an individual or legal entity, regardless of whether they are received in the UAE or abroad, object to UAE taxes (however, not all tax authorities of other states accept UAE residency).

Tax residency certificate is issued for 1 year and requires annual renewal.

In order for an investor to receive a certificate, he/she shall be a resident of the UAE within at least 180 days.

WHAT DOCUMENTS ARE REQUIRED TO OBTAIN A CERTIFICATE?

The following basic documents are required to obtain a certificate for an individual:

- copy of resident visa, passport and Emirates ID;

- a certified copy of the rental agreement;

- proof of income (salary certificate) or sponsorship confirmation;

- bank statement for the last 6 months;

- an extract on the period spent in the country (issued by the General Directorate of Residency and Foreigners Affairs).

Please contact our specialists for advice, if you need to obtain UAE tax residency:

+38 (098) 737-88-88

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