In recent decades, the United Arab Emirates has become the Middle East’s driving economic force. With an economy that exceeds $350 billion, businesses and individuals get the benefit of a centralised hub with easy access to the economies of Middle Eastern nations, Europe, and Asia. The UAE has recently made major strides in improving its visa and entry process to attract more companies and wealthy individuals who want to relocate or set up operations in the country.
In addition to more flexible residency options, living and working in the UAE provides significant tax incentives. These benefits are available to businesses and individuals who qualify for a tax residency certificate.
A tax residency certificate is an official document issued to eligible government entities, companies and individuals by the UAE’s Federal Tax Authority (FTA). It is used to establish tax residence in the UAE and allows the holder to benefit from the UAE’s extensive double taxation avoidance agreements which ensures that tax is not levied on the same income in more than one jurisdiction. The certificate is valid for one year and can be renewed upon expiry.
To take advantage of these tax benefits, companies must apply for a Tax Residency Certificate (TRC). For individuals, this is often referred to as a Tax Domicile Certificate (TDC).
The process to apply for a Tax Residency Certificate is straightforward if you meet the criteria for application. While the process is the same for both corporations and individuals, the documentation that needs to be provided with the application may differ.
To become eligible for a TRC, companies must have been active for at least one year and operate from the mainland or one of the many free zones. Offshore companies are not eligible for a TRC but have the option of applying for a similar document known as a tax exemption certificate. Individuals are eligible for a TDC once they have resided in the UAE for at least 180 days.
Before you get started, it’s important to gather all the necessary documentation that you will need to submit with your application. Keep in mind that additional documentation could be required.
Documents Required for Individuals:
Documents Required for Corporations:
The Tax Residency Certificate (or Tax Domicile Certificate) will remain valid for one year. After one year, the applicant can follow the FTA’s renewal process.
Having the proper approvals and documentation submitted to the Federal Tax Authority is critical to start capturing the tax benefits of living and working in the UAE. Delays in the process could potentially result in additional tax costs. Having a professional consultant on your side can help navigate the process and save you a lot of money, especially if you are unfamiliar with the language or government structures of the UAE.
We have an expert team, with in-depth knowledge of business practices and tax requirements in the UAE and direct contact with key government departments. We can advise you and guide you through the process of acquiring a tax residency certificate and the implications it will have for you and your business.
If you need assistance with this or any other related onshore or offshore company setup, restructuring, local partner or PRO support matter in Abu Dhabi, Dubai, the wider UAE, Oman, Qatar or KSA, then please do get in touch with us on +971 (0)4 456 1761 for Dubai or +971 (0)2 448 5120 for Abu Dhabi, email us at email@example.com or complete the contact form below and we will be delighted to assist you.
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