How to set up your taxes in the United Arab Emirates: A guide for digital nomads
Feb 08
8 minWho will this be the most beneficial for? Nomads and location-independent remote 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? Anyone can apply.
What % of the process can be done online? 100%
How to set up your taxes in the United Arab Emirates
The UAE's Remote Work Visa is a countrywide 1-year Virtual Work Residency that allows you to work remotely and live anywhere in the country.
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.
Both of these visas allow nomads to gain benefits and services that UAE’s residents have: tax-free income, an official ID, and even schooling if you have children. Once your visa expires, you can simply reapply.
There are no income (or corporate) taxes in the UAE. Although you will not be considered a tax resident under these programs and won’t be expected to pay taxes, the government can still issue tax residency certificates if you stay in 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 apply for loans.
How it works
Although you will not be charged any income tax, technically, you will be expected to pay 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 taxes 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) and government Income Tax (PIT) which you might encounter with, for example, an EU-based company.
Pros & Cons
🟢 A 0% income tax on those considered fiscal residents. 🟢 0% on Withholding Taxes. 🟢 There are no compliance issues for remote employers. 🟢 Dubai, 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. 🟢 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.
🔴 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 ($5k/month), 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.
How to apply for the Dubai Virtual Working Program
Applicants can enquire about the visa through VisitDubai.com. They will send you 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.
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.
Hold a passport with at least 6-month of 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 with your visa.
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.
Check the travel requirements and restrictions when planning your trip to the UAE.
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 should be around $610, although the exact figure may vary.
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."
Check out our Dubai city guide if you’re planning your trip to the UAE! 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.
