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How to set up your taxes in United Arab Emirates

Table of Contents
I.How to set up your taxes in United Arab Emirates
1. 1.How it works
1. 1. 1.Pros & Cons
1. 1. 2.How to apply for the UAE Remote Work Visa
1. 1. 3.How to apply for the Dubai Virtual Working Program
1. 1. 4.Fees
1. 1. 5.How does UAE benefit from this system?
1. 2.What the nomads say
Who will this be the most beneficial for? Remote workers and location independent workers who plan on staying in the country for more than 183 days.
Difficulty of applying from 1-5: 2
Are there any citizens of specific countries that can’t apply? Any nationalities can apply for this visa if they are not already considered locals or UAE residents.
What % of the process can be done online? 100%

How to set up your taxes in United Arab Emirates

The UAE's Remote Work Visa is a countrywide one-year Virtual Work Residency that allows foreigners to enter and work remotely anywhere within the United Arab Emirates.
It’s often mentioned alongside the Dubai Virtual Working Program, but it's worth noting these visas differ slightly. The Dubai program is location specific and has a slightly different application process than the more general Remote Work Visa.
These virtual working programs allow nomads to gain all the benefits and services a resident would have, most notably tax-free income, an official ID, and even schooling if you have children. The visa you obtain through the selected program is valid for one year; however, you can re-apply using the same methods when it is about to expire.
There are no income (or corporate) taxes in the UAE. Although you will not be considered a tax resident under these programs, as you will not be expected to pay taxes, the government can still issue tax residency certificates on the proviso that you stay within the country for at least six months of the year. You also need to remain in the country for six months to retain your visa status.
These programs allow nomads to open bank accounts, get access to credit cards (that generally feature a lot of perks) and even apply for loans.

How it works

Although you will not be charged any income tax, technically, you will be expected to be paying taxes somewhere. Interestingly, you will only need to prove that you either have an employer or run a company outside of the UAE in the application process. You will not need to prove that you pay tax within your home country.
It's worth noting that if you were to fulfill the basic requirements for either of these programs and obtain the visas associated with them, nothing is preventing you from opening up a UAE-based company. This company would benefit from a 0% tax on income.
It would be possible to divert your income into this company and would stop you from being burdened with things like Corporate Income Tax (CIT) government's Income Tax (PIT) which you might encounter with, for example, an EU-based company.
Suppose you were to set up a company within the UAE, and it becomes profitable. In that case, it's also plausible that you may be able to leverage this and stay in the country long-term without going through the remote work visa process.

Pros & Cons

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  • A 0% income tax on those considered fiscal residents.
  • 0% on Withholding Taxes.
  • There are no compliance issues for remote employers.
  • There are a lot of great co-working places available for remote workers to use.
  • Dubai state, in particular, is considered one of the safest places in the world according to the Numbeo Crime Index. The city also ranks 1st in Cyber Security thanks to the Dubai government's efforts to ensure data safety.
  • Dubai has great infrastructure and facilities, boasting fast internet, great healthcare and an easy banking system.
  • Visa holders obtain premium UAE health insurance.
  • As Dubai is an international hub, there are affordable, direct flights to most top popular nomad locations.
  • Access to cryptocurrency is not prohibited.
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  • The most desirable locations in the UAE come bundled with a high cost of living.
  • There is a lengthy application process, and approval can take 30-60 days.
  • You need a high minimum income, particularly with the Dubai program to qualify.
  • The UAE has some of the world's most extreme summer temperatures.
  • Internet censorship is in operation, with applications such as WhatsApp being blocked.
  • There is a very conservative culture with a strong governmental influence over everyday life that might be difficult to adapt to.
  • Not LGBTQI friendly (homosexuality is illegal).

How to apply for the UAE Remote Work Visa

To apply for the Virtual Work Residency outside of the UAE, you will need to complete this application form. If you are applying within the country, follow this link. You will be expected to prove the same information as listed below.

How to apply for the Dubai Virtual Working Program

Applicants can enquire about the visa through VisitDubai.com. You will then be sent an application form where you will have to do the following:
  • Provide proof of employment with a contract valid for one year from your current employer.
  • Earn a salary of a minimum of USD 5,000 per month. You will also need to present the salary slip for the last month and bank statements for the preceding three months.
  • Hold a passport with at least 6-month validity.
  • Have health and travel insurance valid within the UAE for at least 2 weeks. This insurance should cover you until you obtain the premium health insurance for the country that's bundled in with your visa.
  • If you're a business owner, you will need proof of ownership of the business for at least one year, evidence of an average income of USD 5,000 per month, and bank statements from the 3 preceding months.
  • Once approved, when you land in Dubai, you'll have to go to a few offices to get your visa printed, scan your fingerprints, and have a blood test and a chest x-ray. The process is straightforward; it's just a matter of following the steps required.
  • Once these steps have been completed, you can expect your new UAE ID in your hands in a couple of weeks.

Fees

  • There is a $287 fee for the Dubai Working Program.
  • Additionally, you will be expected to pay a processing fee for your medical coverage documents and Emirates ID.
  • The total amount payable should be around $610, although this exact figure may vary depending on the exchange rate.
Paying the application fee does not guarantee your visa will be approved.

How does UAE benefit from this system?

The UAE is hoping to attract global talent and expertise through this visa.

What the nomads say

Dubai is a very interesting option, particularly for entrepreneurs and remote workers with a high income who want to access the unique fiscal benefits and enjoy the high quality of life and top-notch resources this vibrant city offers. One of Dubai's biggest advantages and alluring factors for remote workers is the 0% income tax policy for fiscal residents. Even though there are options for all budgets in Dubai, living costs are still much higher than in popular digital nomad hubs like Thailand, Bali, Mexico, or even Portugal. -Stefania Guglielmi - Travel Blogger
Check out Stefania's article on the best spots to explore in Dubai!

Disclaimer: SafetyWing and its affiliates do not provide tax, legal or accounting advice. This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for, tax, legal or accounting advice. You should consult your own independent tax, legal and accounting advisors before making any decisions or engaging in any transaction.

About the author

Luke Poulson

Researcher & Writer
Luke has been traveling around the globe for the last decade and is currently based in Chiang Mai, Thailand. He's been working remotely on everything from directing music festivals, to online ESL coaching, to writing and contributing as a researcher for Borderless. He is a passionate advocate for the modern nomadic way of life and enjoys getting others started on their journey towards remote living.

Nick Georgilopoulos

Founder | Business Strategy Consultant
The Consulting Company & Pnyca
Nick is a business strategy consultant, currently based in London but traveling the world. He is the founder of The Consulting Company, which specializes in startup and SME growth, finance, operations and tax optimization. Coming from a Mechanical Engineering background but with extensive knowledge in finance, tax law and project management, Nick is a problem solver at heart. He is also building Pnyca - an app reinventing democracy and citizen engagement.