🇦🇪 Dubai (UAE)

Dubai sells itself with skylines and supercars. The reason entrepreneurs move there is duller and better: no personal income tax, a corporate tax that only starts above AED 375,000 of profit and a residence visa your own company can sponsor in a few weeks.

“Tax-free” stopped being the whole story a while ago. Since 2023 there is a 9% corporate tax, free zone 0% comes with conditions, and your old country will study a move to the Gulf with the enthusiasm of an auditor who just found a receipt. Here’s the picture as of September 2026, without the brochure filter.

Is it for you?#

Dubai rewards people who relocate for real. Live there, run the company from there, cut your ties at home properly, and the numbers are brutal in your favour: a service business with €100,000 profit pays roughly €1,000 in corporate tax, and nothing on top when you pay yourself.

It fits if you run a consulting, software, trading or e-commerce business that doesn’t need to be an EU company, you want to pay out most of the profit, and a safe, English-speaking city with flights to almost everywhere in under eight hours sounds better than another winter of grey. Families do well too: good international schools, beaches, and a crime rate that makes European city councils look embarrassed.

It’s the wrong choice if you want to keep your flat, family or main clients in Germany and just “have a Dubai company”. That’s not a structure, that’s a future letter from the Finanzamt. The UAE and Germany have had no double tax treaty since 2022, so German management, exit and CFC rules apply without any treaty protection (see place of management and CFC rules). It’s also no budget base: rent, school fees and licence costs add up, and nothing here ends in an EU passport.

The company#

The vehicle#

Two options: a free zone company (FZ-LLC or FZE) or a mainland company licensed by the emirate’s economic department. Both allow 100% foreign ownership for most activities.

• Free zone: fast, cheap to start, a flexi-desk is enough for the licence. You can trade freely abroad and with other free zone companies; selling to the UAE mainland is restricted.
• Mainland: can trade anywhere in the UAE and bid for government work, but needs a physical office lease and usually costs a bit more.

For a founder with international clients, the free zone wins. Dubai or one of the other emirates, it barely matters for most service businesses.

How profits are taxed#

• Corporate tax: 0% on the first AED 375,000 (≈ €88,000) of taxable profit, 9% above.
• Small Business Relief: if revenue stays at or below AED 3 million in every tax period, you can elect to be treated as having no taxable income. Ministerial Decision 131 of 2026 extended it to tax periods ending by 31 December 2029. One year above the limit and it’s gone for good; Qualifying Free Zone Persons (the 0% ones) can’t use it, nor can members of multinational groups with more than AED 3.15 billion consolidated revenue.
• Qualifying Free Zone Person (QFZP): 0% on qualifying income (for example trading with other free zone companies or abroad, certain services), 9% on the rest. You need adequate substance in the zone, audited financial statements and must keep non-qualifying revenue under 5% or AED 5 million.
• Dividends: no withholding tax, no personal tax.
• VAT: 5%, registration mandatory from AED 375,000 taxable supplies. E-invoicing becomes mandatory for most VAT-registered businesses from July 2027.

Worked example: €100,000 profit (≈ AED 430,000), ordinary company, paid out to you as a UAE resident.

With Small Business Relief the corporate tax drops to zero. Try getting that result out of a German tax office. Our tax calculator uses the threshold too, so you can run other profit levels.

Setup and costs#

A free zone licence usually arrives within a week of signed documents, mostly online. The residence visa, Emirates ID and bank account come next, and those need you in the country. Budget roughly AED 13,000–20,000 a year for licence and flexi-desk with a visa quota, plus visa fees, bookkeeping and tax filings – about €6,000 a year in total for a lean setup. A QFZP adds an audit, and auditors don’t work for dates and gratitude.

Banking#

UAE banks are solid and well connected. Getting in is the hard part: onboarding is in person (or by video with a UAE resident), document-heavy and can take a few weeks while someone in compliance asks for the same bank statement a third time. It goes much faster once you hold a residence visa and can show contracts, invoices and a clear source of funds. Digital banks have made small-business accounts easier. Our banking guide covers the backup options.

Substance#

For a normal 9% company, a flexi-desk plus you living in Dubai and running the business there is enough. For the free zone 0% rate, “adequate substance” means real premises, staff and decisions in the zone, proportionate to what you do. And whatever the UAE says: if you run the company from Munich, Germany taxes it. A licence on the wall in Jebel Ali doesn’t change where your laptop is.

Living there#

Residency routes#

Most founders take the investor visa: the company sponsors you, the process takes two to four weeks, and nobody tests your income or your Arabic. Compare that with European residence permits that need three appointments to book the first appointment. The catch with standard visas: stay outside the UAE for more than six months in a row and they lapse. The Golden Visa doesn’t have that rule.

Personal tax#

There is no personal income tax on salary, dividends, interest or capital gains, and no wealth or inheritance tax for residents. Read that twice if you’re used to a payslip where the state takes its cut before you do. The only exception: if you run a business in your own name (not through a company) with turnover above AED 1 million, you fall under corporate tax.

Days#

For a tax residency certificate you need 183 days in any 12 months, or just 90 days if you hold a residence visa and have a permanent home or run a business in the UAE. That certificate is what banks and your old tax office will ask for. Your old country still applies its own rules, and a home kept in Germany can still make you German-resident. Our tax residency guide explains the tie-breakers.

Daily life#

Numbeo puts Dubai’s cost of living (excluding rent) at 62.6 – roughly Western European level. Rent is the big item: expect a lot more than in Lisbon or Limassol for a comparable flat. Health insurance is mandatory for residents in Dubai; private healthcare is excellent and priced accordingly. Safety is outstanding (Numbeo safety index 83.8), English works everywhere, and flights connect you to Europe, Asia and Africa. The trade-offs: June to September is brutally hot, the city is built for cars, and the legal system is predictable for business but not what you grew up with – laws on alcohol, speech and behaviour are stricter than in Europe. Low taxes, high standards of conduct. Plan accordingly.

The catches#

Step by step#

FAQ#

Sources#

• UAE Federal Tax Authority – corporate tax
• UAE Ministry of Finance – double taxation agreements
• PwC Worldwide Tax Summaries – UAE, corporate
• PwC Worldwide Tax Summaries – UAE, residence
• UAE Ministry of Finance – Small Business Relief extended to 2029 (Ministerial Decision 131 of 2026)
• UAE Federal Tax Authority – Small Business Relief
• DLA Piper – UAE extends Small Business Relief (2026)
• UAE Government portal – Golden Visa
• Invest in Dubai – remote work visa
• Numbeo – Dubai