Everything You Need To Know About Relocating to Dubai: Visas, Tax Implications, and Pension Options

This guide will provide essential information about relocating to Dubai, examining visa options and residency permits, tax implications, and the available retirement planning strategies for expats.

It will also address particular considerations for expats relocating with families or planning to establish a business presence in the Emirates.

Do You Need a Visa When Relocating to Dubai?

Obtaining an appropriate long-term residency visa is a vital step for expats planning to reside and work in Dubai. The UAE offers several types of visas tailored to specific circumstances and with varying durations and eligibility criteria. Some of the most common visa options for expats relocating to Dubai include:

1. Standard work visa
2. Green visa
3. Golden visa

Standard Work Visa

The standard work visa is available to expats employed in the UAE’s private or government sector. It is sponsored by UAE employers, who are responsible for applying for and obtaining the visa on behalf of their employees. The visa is typically valid for 2–3 years, after which the employer decides whether to renew or cancel it.

To be eligible for a standard work visa, you must have accepted the job in writing and obtain an entry permit valid for 30 days. The permit allows you to legally enter the UAE and complete the necessary administrative procedures for obtaining the work visa.

Green Visa

The Green visa, introduced in 2022, enables self-employed or highly skilled expats to legally reside in Dubai without requiring sponsorship from an Emirati employer.

Dubai also offers a Virtual Working Programme for remote professionals who continue employment with a non-UAE employer.

This visa is valid for one year and renewable, provided applicants earn at least AED 18,400 per month and meet basic documentation requirements.

It offers additional benefits compared to the standard work visa, including the ability to sponsor the residency visa of immediate family members, a simplified application process, and a six-month grace period during which you may remain in the UAE legally following the expiration or cancellation of your visa.

If you’re applying for a Green visa as a self-employed individual, you’ll have to submit the following documents:

• Self-employment permit issued by the Ministry of Human Resources and Emiratisation (MoHRE).
• Evidence of a bachelor’s degree or a specialised diploma.
• Proof of annual income from self-employment for the past two years in the amount of at least AED 360,000. Alternatively, you can submit evidence of financial solvency throughout your stay in Dubai.

To be eligible for a Green visa as a highly skilled employee, you’ll need to meet the following criteria:

• You hold a valid employment contract.
• You hold a bachelor’s degree, a higher educational qualification, or an equivalent.
• Your profession falls within the first, second, or third occupational level as defined by MoHRE. These may include business executives and professionals in the technical, scientific, and humanitarian fields.
• Your salary is at least AED 15,000 per month.

The Green visa is valid for five years and can be renewed for another five-year term.

Dubai’s virtual working programme allows expats to relocate and legally reside in the Emirate of Dubai while resuming employment with their current, non-UAE employer.

The programme enables professionals working remotely to live in Dubai for up to one year, with the possibility of renewal, provided they meet certain conditions such as earning at least USD 5,000 a month.

Golden Visa

Similarly to the Green visa, the Golden visa allows specific categories of foreign nationals—such as investors, entrepreneurs, doctors, and inventors—to live, work, and study in Dubai without needing a local sponsor. It is valid for a renewable period of 5–10 years, depending on the applicant’s classification, and entails the following benefits:

• A six-month entry visa to facilitate the completion of the Golden visa application process.
• The ability to reside outside the UAE for more than six months in a year without affecting the validity of the residency permit.
• The ability to sponsor immediate family members regardless of age, as well as an unlimited number of domestic helpers.
• Assurance that family members may legally remain in the UAE until their residency permits expire if you, as the primary visa holder, pass away.

Additional Visa Options

Besides residence visas that allow you to work in the UAE, you may apply for additional categories of visas depending on your needs and circumstances, as outlined in the following table:

What Are the Tax Implications of Moving to Dubai?

Dubai, and the UAE in general, is considered a highly tax-efficient jurisdiction as it doesn’t impose any personal income tax for UAE nationals and foreigners alike. As an expat living in Dubai, you won’t be liable for taxes on your:

• Employment income
• Rental income
• Dividends, royalties, and capital gains
• Freelance and self-employment income
• Inheritance and gifts

While there is no personal income tax in Dubai, you may be liable for a 9% corporate tax if you own a business that meets certain conditions, like earning AED 375,000 or more annually.

Freelancers and self-employed expats may be subject to the standard corporate tax rate only if their combined turnover exceeds AED 1 million annually. Meanwhile, if you operate a business involved in the UAE’s oil and gas exploration sector, you may be subject to progressive corporate tax rates of up to 55%.

Besides corporate tax, you may be subject to the following taxes as an expat living in Dubai:

• Value-added tax (VAT): A 5% tax levied on most goods and services in Dubai.
• Municipality tax on rented accommodation: A 5% tax collected indirectly, through utility bills issued by the Dubai Electricity and Water Authority (DEWA).
• Municipality tax on restaurant and hotel bills: A 10% tax, in addition to the 10% service charge, typically included in the final displayed price.

Cross-Border Tax Considerations

While you will be exempted from taxes on most types of income after you relocate to Dubai, you may still be subject to taxation in your home country, depending on its internal tax residency rules and international tax provisions.

For instance, jurisdictions like the UK and Australia impose tax on their residents’ worldwide income. Consequently, British and Australian expats must take appropriate measures to ensure they are no longer considered tax residents of their home countries after relocating to Dubai.

This typically involves evaluating their residency status under the UK’s Statutory Residence Test or Australia’s Resides Test.

However, US citizens are taxed on their worldwide income regardless of residency. This means Americans living in Dubai must continue filing annual US tax returns and may be liable for federal taxes on income earned in the UAE.

Additional reporting requirements, such as the Foreign Bank Account Report (FBAR) and FATCA (Foreign Account Tax Compliance Act), may also apply.

Engaging a qualified cross-border tax adviser is essential for ensuring full compliance while maximising available exemptions and credits, such as the Foreign Earned Income Exclusion.

Double Tax Treaties in the UAE

The UAE has entered into double taxation agreements (DTAs) with more than 100 countries, including the UK and Australia, with the goal of mitigating the effects of double taxation on its tax residents and fairly distributing the taxation rights on certain types of income.

The DTAs provide double taxation protections exclusively to individuals or businesses deemed tax residents of either of the two contracting parties.

Accordingly, your eligibility to benefit from the UAE’s DTAs as an expat living in Dubai depends on whether you’re considered a resident for tax purposes in the UAE. As a natural person, you’ll qualify as a UAE tax resident if you meet one of the following criteria:

1. Your usual or primary place of residence and the centre of your financial and personal interests are in the UAE.
2. You are physically present in the UAE for at least 183 days within a consecutive 12-month period.
3. You are physically present in the UAE for at least 90 days within a consecutive 12-month period, and you hold a valid residence permit in the UAE. In addition, your permanent place of residence has to be in the UAE, or you must carry on a business or employment in the country.

For instance, switching from a UK tax residency to a UAE tax residency may substantially reduce your overall tax burden. Under the UK–UAE DTA, the UAE has the right to tax most types of income you generate as its resident. Since the UAE has no personal income tax, becoming a UAE tax resident may result in a zero income tax liability.

Due to the UAE’s zero-tax policy on most types of income, the only potential double taxation you may face as an expat in Dubai pertains to corporate tax. The UAE levies corporate tax on both domestic and foreign-sourced profits of certain types of businesses incorporated and effectively managed within its borders.

As a result, most of the UAE’s DTAs contain provisions that allow one jurisdiction to tax the profits of a business operating in both countries only to the extent those profits have been generated within its territory.

What Are the Pension Options for Expats in Dubai?

As an expat relocating to Dubai, ensuring your financial future and a comfortable retirement is a primary concern. Therefore, exploring the available pension options in the UAE is essential.

Expats in the UAE cannot benefit from the UAE national pension scheme, which is only available to Emirati nationals. However, they can rely on the end-of-service gratuity, a lump-sum payment mandated by the country’s Labour Law.

To qualify, foreign employees must have completed at least one year of continuous service for a private-sector company under a valid contract. Gratuity is calculated based on the basic salary and tenure:

• 21 days’ worth of salary per year for the first five years of service
• 30 days’ worth of salary for each additional year of service, capped at two years’ total salary

Since gratuity alone is rarely sufficient to support long-term retirement, many employers and employees explore alternative pension solutions, as outlined in the table below:

Can You Transfer Your Pension to Dubai?

For expats relocating to Dubai who have already accumulated retirement savings in their home countries, transferring their pensions to offshore schemes may provide specific benefits such as making contributions in multiple currencies, accessing broader investment opportunities, and enhancing retirement planning flexibility.

However, the rules and costs of transferring your pension to the UAE depend on the type of retirement plan you hold and the specific rules governing pension transfers in your home country.

Transferring a UK Pension

UK expats are generally presented with three options for transferring their UK pension to Dubai:

• Qualifying recognised overseas pension schemes (QROPS): QROPS are non-UK pension schemes recognised by His Majesty’s Revenue and Customs (HMRC). Since there are currently no authorised QROPS providers in the UAE, transferring your pension to a UAE scheme would incur a 40% tax penalty on the transferred amount.
• International self-invested personal pensions (SIPPs): International SIPPs are UK-registered personal pension schemes tailored for UK expats. Transferring your pension to an international SIPP does not trigger the tax penalty, allowing you to manage your retirement savings from abroad while gaining access to a broader range of investment opportunities.
• International Private Pension Plans (IPPPs): IPPPs are long-term retirement savings vehicles specifically designed for internationally mobile individuals, including expats and international employees. While they offer a broad range of investment options and limitless contributions, transferring your UK pension to an IPPP may result in substantial tax consequences, as these plans are not registered in the UK.

Transferring a US Retirement Plan

Since most US employees are enrolled in 401(k) or other employer-sponsored retirement plans, such as a 403(b), transferring their pension when relocating to Dubai is generally not feasible. Still, US expats have the opportunity to roll over their 401(k)s to an Individual Retirement Account (IRA).

Unlike 401(k)s, IRAs allow you to continue contributing and managing your retirement savings in the US while living abroad, in addition to providing other benefits such as more extensive investment opportunities.

Transferring an Australian Superannuation Fund

Australian expats cannot directly transfer their retirement savings—superannuation funds—to a pension scheme in Dubai, or anywhere in the UAE. The Australian superannuation system is subject to strict rules regarding international transfers imposed by the Australian Taxation Office (ATO).

Australian expats are typically presented with the option of either leaving their supers in Australia until they are eligible to access the funds or contributing to a UAE pension scheme such as the Golden Pension Plan.

If you’re planning to retire in Dubai as an expat and looking to ensure financial stability, consulting professional cross-border financial advisers, such as those at Titan Wealth International, is a recommended course of action. They can develop a retirement plan to minimise your cross-border tax liabilities, maximise your investment returns, and ensure compliance with tax laws both in the UAE and your home country.

What Are the Implications of Relocating to Dubai for Business Owners?

Establishing a business in Dubai as an expat offers a range of benefits, including a low-tax environment, low business formation costs, and access to diverse markets. However, the associated compliance rules, operational costs, and cultural adaptation process depend on whether you’re licensing a business in Dubai’s free zone or the mainland.

Setting up a business entity in one of Dubai’s 30 special economic areas, called free zones, entails the following benefits and restrictions:

• Ownership: The possibility of 100% foreign ownership without a local sponsor
• Tax benefits: 0% corporate tax up to AED 375,000 in profits; 0% personal income tax
• Trade restrictions: Limitations on trading directly in the UAE mainland without forming a company with a local sponsor

Meanwhile, establishing a company in Dubai’s mainland provides the following advantages and drawbacks:

• Ownership restrictions: UAE national sponsorship holding 51% ownership for most activities (with certain exceptions)
• Corporate tax: 9% on profits exceeding AED 375,000
• Market access benefits: Unlimited trading across the UAE, eligible for government contracts

What Are the Implications of Relocating to Dubai With Your Family?

Expats moving to Dubai with their children, spouses, and other family members are faced with unique challenges, such as:

1. Obtaining residence visas for family members
2. Selecting a school for children

Residence Visas for Family Members

As an expat with a valid residence visa in the UAE, you are allowed to sponsor a long-term residence visa for your family members, provided you earn a minimum monthly salary of AED 4,000 (or AED 3,000 plus accommodation) and submit attested birth and marriage certificates. Your family members older than 18 also need to pass medical fitness tests to qualify for a residence visa.

Besides the general requirements, the UAE imposes several particular criteria for sponsoring your family members:

• You have 60 days from the arrival of your family members in the UAE to apply for their residence visa.
• You may sponsor your parents, but they will be granted residency on an annual basis, regardless of the expiry date of your own residency permit.
• You can sponsor your daughters regardless of age, as long as they are not married.
• You can sponsor your sons until they turn 25.

Educational System

If you’re relocating to Dubai with school-age children, understanding the local educational system is essential for ensuring a smooth transition for your family.

The UAE has a well-developed educational system consisting of both public and private institutions. The country’s public school system is generally accessible to expat children, but you have to pay AED 6,000 in tuition fees and meet specific requirements, including:

• Expat students are only permitted in grades 2-12
• The parents of expat students must be employed by a government, semi-government, or local entity.
• The student and their parent must hold a valid residence visa.
• Expat students must not account for more than 20% of the total capacity in a single school or classroom.

In addition, courses in UAE’s public schools are taught in Arabic, which may pose an issue for expat children, especially in the initial period following the relocation.

For these reasons, many expat parents decide to enrol their children in one of Dubai’s over 200 private and international schools that offer British, American, and International Baccalaureate (IB) curricula. Annual tuition fees typically range from AED 12,000 to AED 64,000 and do not include admission fees, transportation expenses, uniforms, or books.

What Is the Cost of Living in Dubai?

While the cost of living in Dubai for expats has increased substantially in the past couple of years, primarily due to the rise in housing and utility expenses, the Emirate remains notably more affordable than other global hubs like London, New York, and Hong Kong.

The table below provides a concise overview of the average and approximate costs of accommodation, utilities, transportation, and dining, relative to similar expenses in London.