How to get a UAE Tax Resident Certification

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.

What is 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).

How to Apply for a Tax Residency Certificate

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.

Documents Required for Your TRC Application

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:

Copy of passport that was issued at least 180 days prior to the application
Copy of Emirates ID (EID)
Six months of personal UAE bank statements
Proof of income in the UAE
Report from the General Directorate of Residency and Foreign Affairs showing all entries and exits from the country
Proof of tenancy contract that has been valid for three months prior to the application

Documents Required for Corporations:

Valid UAE Trade License (Mainland or Free Zone only) that has been active for 1 year
Copy of the Memorandum of Association
Copy of the Certificate of Incumbency (typically the Chamber of Commerce certificate)
Company organisational chart
Deed or copy of tenancy contract for a physical office space (valid for at least three months prior to application)
Copy of applicant’s valid passport and resident visa
Copy of EID for all company directors, shareholders, and managers
Certified, audited financial statements or UAE company bank statements from the last 6 months

TRC Application Process

Step 1: Compete Application - Applicants will need to set up an account on the portal for the UAE Federal Tax Authority and complete the TRC application.
Step 2: Upload Documents - Once the application is complete, you will be prompted to upload the supporting documents. Make sure they are provided in the correct format requested to ensure that none of your documents get rejected during the review process.
Step 3: Get Pre-Approval - The FTA will then review your application and supporting documents. If you qualify for the TRC, you will receive an email to pay the necessary fees.
Step 4: Pay Fees - The fee for individuals is AED 2,000 and AED 10,000 for corporations. Once payment is received, your application will be fully approved. The certificate may take an additional 5 business days to process, after which your certificate will be delivered via an express courier.

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.

Get the Maximum Tax Benefit of Working in the UAE

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.

How can Sovereign PPG help?

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 SovPPG@SovereignGroup.com or complete the contact form below and we will be delighted to assist you.