Dubai tax residency permit + more

[Hongrug]

Hi all,

I'm a Canadian looking into moving to Dubai for tax benefits. I do not have any substantial ties to Canada except bank account, stock account, and binance. I'm currently in the USA on a F1 student (nonresident alien) visa. I also partially own several e-commerce businesses in the USA.
I thought the best idea is to set up a FZC in Dubai, then have all of my USA businesses send the FZC my equity portion of money each year. That FZC does not get taxed and I can spend the money from the FZC for my personal expenses and anything else I need. I would not need to pull out that money.
I heard from some people that you can just visit for 1-2 months a year and get the tax residency permit if my FZC is 1 years old while other people say you HAVE to stay for 6 months out of a year to get the tax residency permit.

Is there a difference between the individual tax residence permit and the company tax residence permit?

What is your personal experience?

 

[CaptK]

You need to spend 6 months in Dubai to obtain tax residency. Company residency (residency that is granted by virtue of being a business owner) is is different tax residency.

 

[Hongrug]

CaptK said:
You need to spend 6 months in Dubai to obtain tax residency. Company residency (residency that is granted by virtue of being a business owner) is is different tax residency.
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Is the company residency useful? If I have company residency but not individual residency, I would be taxed as a Canadian resident if I take any income out of the company? So I would need both the company residency and individual tax residency to be able to pay 0% income tax correct?

 

[Fred]

Hongrug said:
Is the company residency useful? If I have company residency but not individual residency, I would be taxed as a Canadian resident if I take any income out of the company? So I would need both the company residency and individual tax residency to be able to pay 0% income tax correct?
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You should consult with a up-to-date Canada Tax Lawyer.

Canada is in the enforcement much more lax then EU for example.

Don't ask me why but never seen a Canadian Living in Dubai - they all remain in Canada and even transfering funds between the Countries back and forth.

For our understanding Canada would consider the Dubai FZCO as a domestic Canadian Company and tax it like one due to CFC rules - however the Canadians we work with prove otherwise.

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[CaptK]

Hongrug said:
Is the company residency useful? If I have company residency but not individual residency, I would be taxed as a Canadian resident if I take any income out of the company? So I would need both the company residency and individual tax residency to be able to pay 0% income tax correct?
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It's all a risk but I can say that Canadians get away with murder so far.

To be individually, tax efficient you will need to sever ties with Canada and stay out of the country for 183 days. This is subject to exit ruleS/tax which you will need to get professional advice from a CPA.

To get a Dubai individual tax certificate you will need to spend 183 days in UAE. Pay some utility bills and have a tenancy agreement.

 

[Sammy11]

"To get a Dubai individual tax certificate you will need to spend 183 days in UAE"

Does this apply for EU citizen as well (italian)?

 

[Fred]

Sammy11 said:
"To get a Dubai individual tax certificate you will need to spend 183 days in UAE"

Does this apply for EU citizen as well (italian)?
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Yes.

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[Sammy11]

Fred said:
Yes.
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But I need the tax certificate just in case I want to go back to my home country one day or move fund there, correct?
I mean what is the purpose of tax certificate?
I understood from other threads I can fly to Dubai every 6 months to maintain the residence visa active.
Isn't this still true?

 

[Konstanz]

Sammy11 said:
But I need the tax certificate just in case I want to go back to my home country one day or move fund there, correct?
I mean what is the purpose of tax certificate?
I understood from other threads I can fly to Dubai every 6 months to maintain the residence visa active.
Isn't this still true?
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wrong. You will need tax certificate in case your home country tax inspector would challange your tax residence. They can say you still remain Italian tax resident and you will have provide UAE tax residence certificate to prove UAE tax residency

 

[Sammy11]

Konstanz said:
wrong. You will need tax certificate in case your home country tax inspector would challange your tax residence. They can say you still remain Italian tax resident and you will have provide UAE tax residence certificate to prove UAE tax residency
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Right, so in any case I have to stay in Dubai for at least 183days/year in order to get the tax residence certificate to eventually show it to home country tax men in case of dispute.

What if I have a yearly rent contract in Dubai (plus of course freezone company or freelance visa setup) and I spend just 5 months there, 4 months in Italy and the remaining 3 months travelling around different countries as a tourist for holiday?
No tax residence from Dubai?
Can't the 3 months holiday be qualified as Dubai residence?
I mean I will be on holiday but at the same time, my main "center of interest" (rent/bills) is in Dubai at the end of the day

 

[Konstanz]

Sammy11 said:
Right, so in any case I have to stay in Dubai for at least 183days/year in order to get the tax residence certificate to eventually show it to home country tax men in case of dispute.

What if I have a yearly rent contract in Dubai (plus of course freezone company or freelance visa setup) and I spend just 5 months there, 4 months in Italy and the remaining 3 months travelling around different countries as a tourist for holiday?
No tax residence from Dubai?
Can't the 3 months holiday be qualified as Dubai residence?
I mean I will be on holiday but at the same time, my main "center of interest" (rent/bills) is in Dubai at the end of the day
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5 should be enough to get tax residence certificate , when you can show that you have ties with UAE like real rent apartment, real company activity, fitness club subscriptions, clubs etc.
But in theory you have to spend 183 days. That's the problem with UAE, you cannot be 100% sure you get this certificate without staying 183 days. And they can easy check, because they record in/exit. This is the first thing they require in/exit document from migration.
About italy - 4 months sounds quite a lot. It can be difficult to prove non -residence if you stay 4 months if they collect proof that you lived in Italy. As I understand you are Italian citizen, so it's even more risky.

 

[Fred]

Sammy11 said:
But I need the tax certificate just in case I want to go back to my home country one day or move fund there, correct?
I mean what is the purpose of tax certificate?
I understood from other threads I can fly to Dubai every 6 months to maintain the residence visa active.
Isn't this still true?
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I can only repeat myself - moving out of your home country doesn't mean you need to move full time to Dubai. You can keep traveling and living where ever you want - make sure you don't spend more then 6 months in Italy and get rid of all ties and substance - gym memberships, apartment, telecom etc.

Konstanz said:
wrong. You will need tax certificate in case your home country tax inspector would challange your tax residence. They can say you still remain Italian tax resident and you will have provide UAE tax residence certificate to prove UAE tax residency
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That's simply not true - Konstanz stop ruining other people the opportunity of using the UAE as there Business and Finance Center - when you setup your Business and Finance Center in the UAE but keep living in Thailand and in the Summer you travel through Europe - all the expenses, plane tickets etc count much more - assuming you did cancel your Residence in the Home Country of course.

Sammy11 said:
Right, so in any case I have to stay in Dubai for at least 183days/year in order to get the tax residence certificate to eventually show it to home country tax men in case of dispute.

What if I have a yearly rent contract in Dubai (plus of course freezone company or freelance visa setup) and I spend just 5 months there, 4 months in Italy and the remaining 3 months travelling around different countries as a tourist for holiday?
No tax residence from Dubai?
Can't the 3 months holiday be qualified as Dubai residence?
I mean I will be on holiday but at the same time, my main "center of interest" (rent/bills) is in Dubai at the end of the day
Click to expand...

This works out for sure - 100%.

And if you want to make things bullet proof threat your Home Country Italy like a foreigner just going 3 months there per Year for Holiday.

Tax Residence Certificate is necessary for Polish and Spanish Citizens where you can say that it's so weird and complicated with the home country tax authorities that just living full time in Dubai is the smallest pain - BUT UAE is no longer issuing Tax Residence Certifictaes for Spanish CItizens - so if you go after @Konstanz logic - a spanish Citizen can't get rid of Spain even while living fulltime in Dubai - which is of course NONSENSE.

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[Konstanz]

Fred said:
I can only repeat myself - moving out of your home country doesn't mean you need to move full time to Dubai. You can keep traveling and living where ever you want - make sure you don't spend more then 6 months in Italy and get rid of all ties and substance - gym memberships, apartment, telecom etc.

That's simply not true - Konstanz stop ruining other people the opportunity of using the UAE as there Business and Finance Center - when you setup your Business and Finance Center in the UAE but keep living in Thailand and in the Summer you travel through Europe - all the expenses, plane tickets etc count much more - assuming you did cancel your Residence in the Home Country of course.


This works out for sure - 100%.

And if you want to make things bullet proof threat your Home Country Italy like a foreigner just going 3 months there per Year for Holiday.

Tax Residence Certificate is necessary for Polish and Spanish Citizens where you can say that it's so weird and complicated with the home country tax authorities that just living full time in Dubai is the smallest pain - BUT UAE is no longer issuing Tax Residence Certifictaes for Spanish CItizens - so if you go after @Konstanz logic - a spanish Citizen can't get rid of Spain even while living fulltime in Dubai - which is of course NONSENSE.
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Why they don't issue tax residence certficates for Spanish citizens?

I just share from my experience. I had tax investigation of my tax residence couple years back. They requested tax residence certificate and tons of other proof. They dig really deep.

 

[Fred]

Konstanz said:
Why they don't issue tax residence certficates for Spanish citizens?

I just share from my experience. I had tax investigation of my tax residence couple years back. They requested tax residence certificate and tons of other proof. They dig really deep.
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Yes - because you had for sure questionable substance back in your home country where it was worth to try to imply you are still living in your home country.

Maybe you had other law enforcement going on - it's the same with a drug dealer - if he gets busted he gets automatically busted for tax avoidance.

Everything tells me in your case it's Germany however even there I know only cases where people didn't cut ties properly or had shady ideas to get rid of there existing GmbH's with questionable ideas which did automatically lead to investigations.

If you cut your ties proberly without trying to play games with the home country tax authorities - nobody cares unless you are a star or paying millions of taxes every year.

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[Konstanz]

Fred said:
Yes - because you had for sure questionable substance back in your home country where it was worth to try to imply you are still living in your home country.

Maybe you had other law enforcement going on - it's the same with a drug dealer - if he gets busted he gets automatically busted for tax avoidance.

Everything tells me in your case it's Germany however even there I know only cases where people didn't cut ties properly or had shady ideas to get rid of there existing GmbH's with questionable ideas which did automatically lead to investigations.

If you cut your ties proberly without trying to play games with the home country tax authorities - nobody cares unless you are a star or paying millions of taxes every year.
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I did not have problems with law enforcement. Just the amounts were large to pay tax.
No, it's not Germany. Nothing as you say. It is just they were sad that "milk cow" got elsewhere.

How about that thing that UAE don't issue tax residence certificates for Spanish nationals?

 

[zzzzzz]

Konstanz said:
5 should be enough to get tax residence certificate , when you can show that you have ties with UAE like real rent apartment, real company activity, fitness club subscriptions, clubs etc.
But in theory you have to spend 183 days. That's the problem with UAE, you cannot be 100% sure you get this certificate without staying 183 days. And they can easy check, because they record in/exit. This is the first thing they require in/exit document from migration.
About italy - 4 months sounds quite a lot. It can be difficult to prove non -residence if you stay 4 months if they collect proof that you lived in Italy. As I understand you are Italian citizen, so it's even more risky.
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It's also good if you read DTA between your home country and UAE first. I read that with my home country in EU you can't get UAE TRC. Only UAE nationals can get it, but not UAE residents who are nationals of my country. In that case you only have two options:
a. become non-resident at home and resident in UAE
b. stay resident at home and never tell anyone you have residence in UAE. Become a low profile ghost.

Last edited: Dec 17, 2022