Why I’m Telling My Clients NOT to Move To Dubai/UAE!

Is Dubai Still a Tax Haven? Why I’m Advising Against It 

Dubai, the jewel of the United Arab Emirates (UAE), has long been regarded as a tax haven—a haven where individuals and businesses could enjoy financial benefits while basking in its opulence while paying 0% Tax. However, as an international tax specialist, I’m here to tell you why I’m advising my clients against setting up companies in Dubai, especially if you’re in pursuit of tax savings. 

The Illusion of a Tax Haven 

If you appreciate international tax matters, you’ve likely come across the notion that Dubai is a tax haven. This belief has persisted for many years, attracting those looking to minimise their tax liabilities while keeping a lavish lifestyle. However, today, I’m here to unravel the myth and shed light on why Dubai may not be the tax haven it’s cracked up to be. 

Tailored Solutions for Unique Circumstances 

It’s essential to understand that when it comes to international tax structuring, there is no one-size-fits-all solution. Each person’s circumstances are unique, and the strategies we recommend are tailored to your specific situation. Please note that the information provided here should not be considered personalised advice. To receive advice that suits your needs, we need to get to know you better. Don’t hesitate to reach out, and we’ll be delighted to provide you with expert guidance. 

Dubai’s Changing Tax Rate 

One of the primary reasons I’m recommending against Dubai being a tax haven is the recent shift in its tax rate. On June 1 2023, the United Arab Emirates introduced a corporate tax rate of 9%. This tax rate applies to mainland companies and potentially free zone companies, depending on their income sources.  

While there are exceptions and deductions designed to mitigate the tax impact, The introduction of this corporate tax rate has shifted Dubai’s status as a tax haven.  

The High Cost of Living 

Dubai is not a place where expenses come lightly. Many aspects of daily life, from housing to entertainment, can be considerably more expensive than expected. This financial burden can offset any potential tax savings. 

The Price of Doing Business 

Setting up and conducting business in the UAE is another area of concern. The process of setting up a free zone or mainland company can cost anywhere from $15,000 to $30,000 AUD, and possibly more, depending on the services you require. What’s more, approximately 90% of these costs are recurring, meaning you’ll need to budget for annual renewals. Depending on your income, this may surpass the tax obligations you’d have in Australia. 

The Unbearable Heat 

Dubai’s climate can be another deterrent. With scorching temperatures often exceeding 44°C, spending time outdoors can be challenging. The routine from your air-conditioned home to your air-conditioned car to an air-conditioned restaurant can feel like a cycle of recycled air. 

The Dubai Experience 

Lastly, Dubai’s character might not appeal to everyone. It’s a city defined by its grandeur—imposing skyscrapers and elaborate water fountains—but it may lack the cultural depth and soul found in other places. 

Of course, Dubai offers many opportunities, including thriving business prospects, valuable networking connections, and a strategic geographic location. Your decision to pursue opportunities there depends on your unique circumstances. 

Exploring Alternatives 

While Dubai may not be the tax haven it once appeared to be, there are still plenty of alternatives for individuals looking to escape the Australian tax system and pay less tax. If you’re interested in discovering these alternatives, I encourage you to watch this video, where I discuss six countries my clients are considering for their tax optimisation strategies. 

In conclusion, Dubai’s allure as a tax haven has faded due to recent tax changes and the high cost of living. While it may offer opportunities to some, it’s crucial to assess your personal circumstances and explore alternatives that align with your financial goals. If you’re looking for ways to pay less tax in Australia or worldwide, don’t hesitate to reach out for expert guidance tailored to your unique situation.