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Tax Residency Certificate in UAE: The Keystone of an Optimization Strategy

June 6, 2021by Chinwe Azikiwe

Tax Residency Certificate in UAE: The Keystone of an Optimization Strategy

For a couple of years now, the United Arab Emirates (UAE) has been one of the most popular jurisdictions and one of the most attractive destinations for Russians, Americans, Chinese, Latin Americans, Europeans and African High Net Worth Investors. Dubai, the capital of the United Arab Emirates, is uniquely positioned as one of the world’s top global centers and is the most sought-after destination for foreign investors.  Dubai has positioned itself as one of the best options for people looking for fiscal optimization and quality of life with high standards. Not surprisingly, more and more people are asking us how to implement their fiscal optimization strategies in the Middle Eastern jewel that is the UAE. In short, the UAE is the best option for investors because it offers an incomparable combination of tax advantages.

About the Tax Residency Certificate in UAE

A UAE Tax Residency Certificate (TRC) can be applied for and obtained on behalf of eligible natural and legal persons to take advantage of and benefit from the Double Taxation Agreements, tax incentives, and tax benefits for import and export. A natural person residing in the UAE for at least 180 days can apply for the TRC, and a legal person operating in the UAE for at least 1 year can apply. The TRC is valid for one year and is usually renewable provided that conditions at the time are met. Effective Tax Planning should be applied here to ensure that the corporate and individual situation adheres to the tax rules to gain the maximum benefits from a UAE Tax Residency.

How to Obtain a Tax Residency Certificate in UAE

There are several routes you can take to become a tax resident in the UAE, but undoubtedly one of the fastest and easiest ways to obtain a UAE tax residency is through company incorporation. Company incorporation in the UAE is a relatively easy process. Most free zone and mainland authorities require minimum paperwork and processing duration. Here are the key steps to set up a business:
  • Determine the type of legal entity
  • Choose a trade name
  • Apply for a business licence
  • Choose an office space
  • Get pre-approvals, register your business and get your licence.
By registering a company in the UAE, this way of obtaining tax residency has some very distinct advantages; the biggest being 0% corporate tax rate and 0% income tax rate. This is one of the best tax optimization levels you can find in an onshore financial jurisdiction. Wincore Tax Planning Team will assist you in the following steps below to obtaining a TRC.
  • Creation of account with the Ministry of Finance (MoF)
  • Complete and submit the application
  • Collect and attach the required documents
  • Once verified by the authority, then payment of fees.
  • The TRC is usually processed within 5 working days and the applicant can receive the certificate via express courier.

Conditions & Required Documents for Obtaining a UAE Tax Residency Certificate (TRC)

For Natural Persons: To apply for a tax domicile certificate individuals must have been a resident in the UAE for at least 180 days. The certificate is not granted to non-residents. The following documents must be attached:
  • A copy of the passport + valid permit of residence
  • A copy of ID card
  • A certified copy of the (residential) lease agreement
  • Validated 6-month bank statement from a local bank
  • Source of income/Salary certificate
  • A report from the General Directorate of Residency and Foreigners Affairs specifying the number of days the resident has stayed in the UAE
  • Tax forms (if any) from the country in which the certificate is to be submitted
For Housewives:  In addition to the above documents of the husband, these other documents must be submitted:
  • Marriage Certificate
  • Copy of passports and permits of residence for the married couple
  •  The employment contract of the husband
For Legal Persons: To apply for tax domicile certificates, the company must have exercised its activity in the UAE for at least one year:
  • A copy of the trade licence and partners’ attachment
  • Establishment contract certified by official authorities (if it is not a Sole Company)
  • A copy of the company’s owners/partners/directors’ passports
  • A copy of the company’s owners/partners/directors’ IDs
  • A copy of the company’s owners/partners/directors’ permits of residence
  • A certified copy of the audited financial accounts
  • A validated 6-month bank statement
  • A certified copy of the lease agreement
  • The organisational structure of the company (if it is not a Sole Company)
  • Tax forms (if any) of the country in which the certificate to be submitted

Benefits of a UAE Tax Residency Certificate (TRC)

  • 0% Income Tax.
  • 0% Corporate Tax.
  • Benefit from the Double Taxation Treaties (DTT),  to avoid double taxation in more than 100 countries.
  • A jurisdiction that steers clear of controversies and has no disputes with international regulators. The UAE maintains a spotless record when it comes to lawsuits or disputes with international regulators who are on the hunt for financial centers around the world.
  • Tax benefits for import and export.
  • UAE Residency with all the benefits of being a resident:
    • Visa-free travel to certain destinations (check with foreign embassies in the UAE).
    • Access to the vibrant property market and other local investment opportunities
    • Easy obtainment of UAE driving license.
    • Open a bank account.
    • Access to public services, such as government health services (e.g. Covid Vaccination), health insurance, and schools.
    • Residency in a country with a robust economy and a stable political climate.
    • Benefits of global position with access to international trade.
    • State-of-the-art business infrastructures.
    • 2-year or 3-year residency, typically renewable provided that conditions are met.
    • Business Owners are allowed to sponsor UAE Residency Visas for their family members such as a spouse, children as well as parents, provided they meet certain requirements.
    • With a UAE Residency you are assured that your family, business, and wealth are secured and highly protected within the sophisticated vehicles available in the country.
    • The best quality of life in the Middle East.

How Can We Help You To Obtain The Business Residency Visa In UAE

At Wincore Advisory Group, we assist our clients to obtain world-class alternative residencies in Europe and the UAE. Our team of experienced International Residency and Citizenship experts can support and guide you every step of the process to obtain a UAE Tax Residency.  Our Tax Planning experts work with high-profile investors to help them redomicile their businesses to the UAE, and set up new businesses and they can help you too. If you want to start your tax strategy in UAE and enjoy the tax advantages of this amazing jurisdiction, you can count on us for the best advisory. For Support and assistance on obtaining a UAE Tax Residence Certificate (TRC), Get in Touch with our Corporate Team Today.  Wincore specializes in Tax, Estate, Corporate and Fiduciary matters. We provide pragmatic, flexible and efficient solutions to individual entrepreneurs, startup businesses, foreign and local SMEs, multinationals, wealthy international families, HNWIs and UHNWIs.
 
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Chinwe Azikiwe

Senior Business Advisor

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