21 Mar 2025

Tax Benefits of Setting Up a Company in Dubai

by | posted in: Business Setup | 1

Dubai offers significant tax advantages for businesses, making it an attractive destination for
entrepreneurs and companies worldwide. Here are the key tax benefits of setting up a company
in Dubai:

  1. Zero Corporate Tax (for Most Businesses)
    ● Most companies in Dubai pay 0% corporate tax unless they fall under specific taxable
    categories.
    ● Since June 2023, the UAE introduced a 9% corporate tax for businesses with annual
    profits exceeding AED 375,000 (~$102,000)
  2. No Personal Income Tax
    ● Dubai residents and employees enjoy 0% personal income tax, meaning you keep
    100% of your salary and business earnings.
  3. No Withholding Tax
    ● The UAE does not impose withholding tax on dividends, interest, or royalties paid to
    foreign investors.
  4. No Capital Gains Tax
    ● Investors and businesses are not taxed on capital gains, making Dubai ideal for
    startups, investors, and property buyers.
  5. Full Repatriation of Profits
    ● Companies in Dubai can transfer 100% of their profits to their home country without
    restrictions.
  6. VAT (Value Added Tax) at 5%
    ● Dubai has a low 5% VAT, which applies mainly to goods and services, making it one of
    the lowest tax rates globally.
  7. Free Zone Tax Benefits
    ● Companies in Dubai Free Zones enjoy:
    ○ 0% corporate tax for up to 50 years (depending on the Free Zone).
    ○ 100% foreign ownership (no need for a local sponsor).
    ○ No import/export duties within the Free Zone.
  8. No Estate or Inheritance Tax
    ● Dubai does not impose taxes on inheritance, making it a strategic choice for wealth
    preservation.
  9. Double Taxation Treaties
    ● The UAE has 100+ double taxation agreements (DTAs) with countries worldwide,
    reducing tax burdens for international businesses.
  10. Attractive Tax Policies for Investors
    ● Investors in real estate, gold, and other assets enjoy a tax-friendly environment,
    encouraging long-term wealth accumulation.

Conclusion
Dubai’s business-friendly tax policies make it an ideal location for startups, multinational
companies, and entrepreneurs looking for low-tax and high-growth opportunities.