Did you know that starting a company in Dubai and the United Arab  Emirates can save you plenty of money? It is a bold move to pack up your family to build a startup abroad, but you can cut down on overheads and generate revenues faster. The UAE is a prime destination for expatriate startups, with unbeatable tax exemptions and incentives.

This guide explains how to get a UAE tax residency certificate and visas for your startup.

What is a UAE Tax Residency Certificate?

A tax residency certificate also called a tax domicile certificate is a document that allows a company to operate under tax exemptions in the UAE. Only companies established in mainland UAE or the Free Zones can get a tax residence certificate. Offshore companies do not qualify for this certificate.

What Are The Benefits Of UAE Tax Residency?

Some of the most notable benefits of having UAE tax residency include:

·      Exemption from corporate and income taxes

·      Double-tax protection if you are dealing with imports and exports

·      Easier visa processing for your whole family

·      Visa-free movement in all the Gulf States

·      Unbeatable networking opportunities for your business

·      Access to government health services and insurance

·      Great public and private schools for your kids in the UAE

How Do I Obtain UAE Tax Residency?

There are several ways of becoming a UAE resident, including employment and buying property in the UAE. The most popular form of gaining tax residency is to set up a company in the UAE and then apply for residency status.

What is a Free Zone Company in the UAE?

A Free Zone is a special jurisdiction in which all the operating companies are exempted from income tax, corporate tax, customs. Free Zone companies are allowed to operate inside the free zone and outside the UAE. Free zones offer tax incentives and other perks to attract foreign investment.

In return, the zones contribute significantly to the UAE's gross domestic product (GDP). There are over 30 Free Zones in Dubai alone, and these attract the greatest number of foreign company registrations today.

Free Zone company registration gives you full ownership of your business. This gives you greater freedom compared with being in employment in the UAE. It is also a much more affordable route to the UAE than purchasing a property for your residency visa.

What Are The Benefits Of Free Zone Residency?

When you set up a Free Zone company in the UAE to become a resident, you will enjoy these perks and more:

·      No mandatory UAE partner or sponsor is required

·      No minimum amount of share capital required for registration

·      No physical office is necessary if your business offers services like consulting, management, design, media or communications

·      Local bank accounts for personal or corporate use

·      Visas for your family and employees

Note: UAE Free Zones cover various industries such as technology, education, finance, media production, healthcare, commodities and internet-based startups. Each Free Zone has its own set of requirements that can be overwhelming to understand. An expert will help you prepare all the relevant documents for your business to qualify for a tax residency certificate.

What Are The Requirements For UAE Tax Residency?

The following documents are required for individual tax residency certificate applications:

➢ Passport Copy

➢ UAE Residence Visa Copy

➢ Emirates ID Copy

➢ A certified copy of (residential) lease agreement or Tenancy Contract Copy (an annual

lease agreement officially documented by the competent authorities, such as EJARI in

Dubai or municipalities in other Emirates and free zone authorities)

➢ Source of income (e.g. Salary Certificate, Trade License etc.)

➢ Validated bank statements for 6 months from a local UAE Bank.

➢ A report from the General Directorate of Residency and Foreigners Affairs or Federal

Authority for Identity and Citizenship (ICA) specifying the number of days the resident

has stayed in the UAE (The applicant must have been a resident of the UAE for at least

180 days).

➢ Tax forms (if any) from the country in which the certificate is to be submitted. If the Tax

form requires a Free Trade Agreement (FTA) Signature and Stamp, the applicant needs to send the original formto FTA.

For a legal person Tax Residency Certificate the following documents are required –

➢ A copy of the trade license and directors/shareholders' attachment.

➢ Establishment contract certified by official authorities (if it is not a Sole Company).

➢ A copy of the legal person’s owners/partners/directors' passports

➢ A copy of the legal person’s owners/partners/directors' Emirates IDs

➢ A copy of the legal person’s owners/partners/directors' permits of residence

➢ A certified copy of the audited financial accounts (Financial accounts must be audited or

prepared and stamped by an accredited audit firm and must cover the year for which

the certificate is requested. If the certificate is requested for the present year, the audit

report must cover the past year).

➢ Validated bank statements for 6 months from a local UAE Bank.

➢ A certified copy of the lease agreement.

➢ Tax forms (if any) from the country in which the certificate is to be submitted. If the Tax

form requires FTA Signature and Stamp, the user is requested to send the original form

to FTA.

How Long Does it Take to Get UAE Tax Residency?

The UAE tax residency process is two-fold. First, you must apply for your tax residency certificate for your startup in the UAE. Next, you must apply for your tax residency visa for yourself, your family, and your business partners.

Residency Certificate:

You must submit all the required documents to the Ministry of Finance first before your application goes through a pre-approval process. This takes 4 to 5 working days, followed by another five days to issue your tax residency certificate. Your certificate is valid for one year with unlimited renewals.

Residence Visa:

The tax residency visa process takes about three weeks to complete. You must leave the UAE after submitting your visa application and return under your new tax residency visa to run your business. A tax residency visa is valid for two years.

Note: Your tax residency certificate for your business is valid for one year, but your residency visa is valid for two years. You will have to visit the UAE for at least one or two days every six months to maintain your residency visa validity.

Conclusion

UAE tax residency is a dream for many entrepreneurs, but the process can be overwhelming. There is so much conflicting information online about the UAE tax residency process. Only a professional UAE company formation agent can offer the best guidance for you. Startup Zone advisors are always ready to give your venture a good head start.

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