6 myths about the UAE and zero taxes

Why myths about the UAE live so long

The UAE is one of the most popular jurisdictions for relocation and business among the Russian-speaking audience. Dubai, Abu Dhabi, free zones - all this long ago became part of the entrepreneurial lexicon.

The problem is that information about UAE taxes is outdated. Most articles were written before 2022 - before corporate tax, before updates to Russian tax legislation. People read old materials and draw conclusions that no longer work.

Below are the six myths we hear most often. Each of them can cost you money if taken as truth.

Myth 1. There are no taxes at all in the UAE

This is the most common myth - and the most costly.

Before 2023 it was close to true: company profit tax effectively didn't apply to most businesses. But since June 1, 2023, federal corporate tax has been introduced in the UAE - 9% on profit above 375,000 AED a year (about $102,000).

Profit up to this sum is taxed at 0%. This preserves advantages for small business. But if your company earns more - you pay tax.

Free zones retain benefits, but only when meeting requirements for "qualifying income" and real presence. Simply registering a company in a free zone and working from another country is no longer enough.

Advice.Before opening a company, clarify whether your business falls under free zone benefits and what income is considered qualifying for your activity type.

Myth 2. UAE residency = exiting Russia's tax system

This is a myth with serious consequences. People get UAE residency, continue living in Russia most of the year - and think they're no longer Russian tax residents.

That's not so.

Russian tax residency is determined by the number of days spent in the country. If you've spent 183 days or more in Russia over 12 months - you're a Russian tax resident, regardless of having another country's residency.

UAE residency is a permission to reside. It doesn't automatically change your tax status in Russia. To change tax residency, you need to physically leave Russia for a sufficient time and notify the tax authority of opening accounts and assets abroad.

Advice.Count the days. Keep a movement tracker. When moving to the UAE, consult a tax lawyer on Russian law, not just Emirati.

Myth 3. Crypto in the UAE isn't taxed

Partly true, partly not - and this line matters.

Individuals who buy and sell cryptocurrency in the UAE genuinely don't pay income tax on these operations. There's no capital gains tax for individuals in the country.

But if you conducta crypto business- trading as a legal entity, managing a crypto fund, providing exchange services - you fall under 9% corporate tax on profit above 375,000 AED.

VARA (the UAE's virtual assets regulator) is actively developing licensing. Working with no license in this field is a separate risk.

The line between a "private investor" and "business" in crypto is blurred. Regulators in different countries interpret it differently. If turnover is large - it's better to get an official tax ruling.

Advice.Separate personal investments and commercial activity. If earning on crypto as a business - structure it legally.

Myth 4. UAE residency can only be obtained through property

Property is the best-known path. But not the only one.

The UAE has several residency types for investors and professionals.Golden Visa for 10 yearsis available through several grounds:

• Property from 2,000,000 AED - owned, with no mortgage or with a remaining debt below the threshold.
• A contribution to an investment fund from 2,000,000 AED.
• Ownership or partnership in a business with established charter capital.
• "Talent" status - for scientists, doctors, engineers, athletes, artists.
• Entrepreneurs with an approved startup.

There's also standard residency for 2-3 years through employment, study, or opening a free zone company.

Advice.If property isn't your option - study business grounds or the talent category. Often this is faster and cheaper. More - on the page ofUAE residency programs.

Myth 5. Renting an apartment in Dubai gives residency

No. Renting an apartment doesn't give the right to obtain an investor resident visa.

For the 10-year Golden Visa,ownershipis needed worth from 2,000,000 AED. This means full ownership right - either the property is bought outright, or the mortgage remainder doesn't exceed the established threshold.

Rental, even long-term, even expensive, is rental. It doesn't form grounds for the investor visa.

Standard residency through rental is formally possible within some emirate programs (for example, Dubai issued short-term visas to renters), but this isn't permanent residency and not Golden Visa.

Advice.If the goal is stable long-term residency, consider only buying property or alternative grounds.A detailed cost calculationwill help estimate the budget in advance.

Myth 6. There's no VAT in the UAE

VAT appeared in the UAE on January 1, 2018 - a 5% rate. This isn't news, but many are still surprised when they see it on bills.

VAT extends to most goods and services. There are exceptions: basic food products, healthcare, education, some financial services, and international transport are taxed at a zero rate or exempt.

Companies with turnover above 375,000 AED a year must register as a VAT payer. At turnover of 187,500-375,000 AED, registration is voluntary.

5% is a small rate by world standards. But if you're planning business in the UAE and haven't accounted for VAT in the financial model - it can become an unpleasant surprise.

Advice.When opening a business, consult on VAT registration right away. Fines for late registration in the UAE are substantial.

How much a Golden Visa in the UAE costs: a full estimate

If you're considering residency through property - here's a real cost calculation.

Total for 1 applicant (excluding the property's cost):from $23,000-25,000 in one-off expenses.
Total for a family of 4:add ~$1,500-2,500 for each family member (visas, Emirates ID, insurance).

How to check your tax position before moving

Moving to the UAE isn't just a change of residence. It's an intersection of two tax systems: the Emirati one and the one you're leaving.

Here's the minimum checklist before moving.

• Count the days.How much time do you spend in Russia now? How much after moving? Is there a risk of keeping Russian tax resident status?
• Check assets in Russia.Property, company stakes, bank accounts - all this can create tax obligations even for a non-resident.
• Determine the business structure.If you have a Russian LLC and you're moving - the company remains Russian. Tax obligations don't go anywhere.
• Study the DTT.There's no double-taxation avoidance treaty between Russia and the UAE. This means taxes can be assessed in both countries.
• Get a written tax ruling.Before moving - from a Russian tax consultant. After - from an Emirati one.

Free zones: real advantages and limits

Free zones in the UAE are special economic zones with simplified registration and tax benefits. There are more than 40 in the country: DMCC, DIFC, Jafza, Dubai Internet City, and others.

A free zone company before 2023 almost always meant zero corporate tax. The situation has now changed.

Free zone companies retain the 0% rate only if:
- they earn "qualifying income" per the list approved by the UAE Ministry of Finance;
- they meet real presence requirements (substance requirements);
- they don't do business with the UAE mainland directly.

If the company works with mainland clients or doesn't meet substance requirements - it pays 9% like a regular company.

Advice.The free zone choice depends on the activity type. Consult a specialist who knows the current list of qualifying incomes.

Which residency suits you specifically

Confusion between residency types is a common cause of mistakes when planning a move.

Here are the main options for individuals:

• Golden Visa (10 years)- through property from 2M AED, investments, business, or talent status. The most stable option. More:UAE Golden Visa.
• The investor visa (3 years)- through a business with charter capital from 72,000 AED or a company partnership.
• A work visa (2-3 years)- through employment at an Emirati company or your own mainland company.
• The freelancer visa- some free zones issue permits for self-employed people.
• The retiree visa (5 years)- for persons 55+ with passive income or property.

Each visa type has its own requirements for documents, timeframes, and renewal.

Cryptocurrency and business in the UAE: taxes 2025-2026

The UAE is one of the few countries where the crypto industry has a full-fledged regulatory basis. VARA in Dubai and ADGM in Abu Dhabi issue licenses for various virtual asset activities.

Tax rules for crypto in the UAE:

• An individual sells bitcoin - 0% tax. No income.
• A company trades crypto as its main activity - 9% on profit above 375,000 AED.
• A crypto exchange, fund, OTC desk - a VARA license and corporate tax are needed.
• Mining: there's no clear regulation yet, the situation is developing.

The main thing is not to mix personal assets and commercial activity. UAE tax authorities are becoming increasingly attentive to this line.

Russian taxes when moving to the UAE

There's no DTT between Russia and the UAE. This means double taxation is theoretically possible - there's no treaty that would eliminate it.

What's important to know:

• If you remain a Russian tax resident (183+ days a year in Russia) - you pay personal income tax in Russia, even if the income is received in the UAE.
• If you've lost Russian tax resident status - the income tax rate on Russian income rises to 30%.
• Dividends from Russian companies are taxed in Russia in any case.
• Notifications of opening accounts abroad and fund movement reports are mandatory for Russian citizens, even non-residents.

Moving to the UAE doesn't automatically cancel Russian tax obligations. Planning needs starting at least a year before the move.

VAT in the UAE: who and when pays

5% VAT in the UAE has been in effect since 2018. For most countries this is a symbolic rate. But it exists - and needs accounting for in the business model.

Mandatory registration: turnover from 375,000 AED a year. Voluntary: from 187,500 AED.

What's subject to VAT: most goods and services, commercial property rental, restaurant services, telecommunications.

What's exempt or at a zero rate: basic food products, medicine, education, export of goods and services outside the UAE, international transport.

Residential property at first sale is taxed at a zero rate. Subsequent sales are exempt.

Input VAT refund is possible for registered payers. This partially offsets the burden on business.

Conclusion: what's really zero and what isn't

The UAE remains one of the world's best tax jurisdictions. But "zero taxes" is a simplification that no longer reflects reality.

What's really equal to zero:

• Personal income tax.
• Capital gains tax for individuals.
• Inheritance tax.
• Corporate profit up to 375,000 AED a year.

What isn't zero:

• 9% corporate tax on profit above the threshold.
• 5% VAT on most goods and services.
• The 4% DLD registration fee when buying property.

For a private individual with passive income or an employee, the UAE can genuinely give almost zero burden. For business - it needs calculating.

Study the program ofUAE residencyand consult before making a decision.