UAE Law and Practice Contributed by: Ildar Yuvakaev, Ruslan Akhmetov, Olga Serova and Daiana Ubushaeva, Consigliere Group
or specific anti-exit rules. Spain and France are com - mon examples of jurisdictions where inheritance, gift or wealth-related tax exposure may survive relocation, particularly where local assets, heirs, beneficiaries or prior residence links remain relevant. Assets and structures should therefore be reviewed before the move. This includes real estate, rental income, investment portfolios, shares in private com - panies, trusts, foundations and assets with future capital gains exposure. Where possible, dividends, transfers, disposals, gifts or the establishment of UAE holding companies, family offices or foundations should be considered before, or at least concurrently with, personal relocation. Moving first and restructur - ing later may reduce planning options and trigger tax consequences in the former jurisdiction. Company-level planning should also be checked. If the client uses a foreign or UAE holding company, the place of effective management, signing authority, board composition, substance and possible change of corporate domicile should be reviewed before relocation. A personal move to the UAE should not inadvertently move corporate tax residence or create management-and-control issues elsewhere. Immigration and Tax Residence Immigration residence and tax residence must be distinguished. A UAE residence visa does not auto - matically make an individual UAE tax resident. Tax residence is tested separately, including by reference to the usual or principal place of residence, the centre of personal and financial interests, physical presence for at least 183 days, or, in specified cases, the 90-day test. Residence and Relocation Planning Citizenship is not the ordinary planning route. UAE nationality remains difficult to obtain and discretion - ary. For most clients, residence planning is more real - istic, including employment, investment, real estate ownership, Golden Residence, Green Residence, entrepreneur routes, and talent or specialised profes - sional categories. Relocation planning should also include administra - tive costs: entry permits, residence visas, renewals,
cancellations, Emirates ID, change of status and related government fees. These are not taxes in the strict sense, but they affect the cost and timing of relocation. 1.5 Taxation of Real Estate Owned by Non- Residents and Non-Citizens The UAE does not impose personal income tax, annu - al property tax or wealth tax on real estate owner - ship. The tax treatment mainly depends on whether the property is owned by an individual or a company. Non-Residents – Individuals Rental income from personally owned real estate is typically not subject to UAE corporate tax where the activity qualifies as passive real estate investment. This applies where the individual is not carrying on the activity through a commercial licence and no licence is required for that activity. As a result, a foreign indi - vidual may own and rent out UAE property without creating a UAE tax liability on the rental income. Non-Residents – Companies A non-resident company that derives income from UAE immovable property may create a UAE corpo - rate tax nexus. Income from such property is treated as UAE-sourced income and may be subject to cor - porate tax, even where the company is incorporated outside the UAE. Municipality Charges Although the UAE does not impose an annual property tax, certain municipality charges apply. For example, in Dubai, a municipality housing fee is charged at 5% of the annual rental value. For residential property, this cost is generally borne by the tenant and collected through Dubai Electricity and Water Authority (DEWA) bills. For commercial property, the municipality fee is generally payable by the owner.
VAT Considerations See 1.1 Tax Regimes . 1.6 Stability of Tax Laws
The UAE tax system has undergone continuous devel - opment, including the introduction of corporate tax in 2022 and the implementation of international tax standards such as the OECD Pillar Two framework.
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