You will still need exit-tax planning in the country you are leaving.
From a European perspective, it is regarded as a third country outside the traditional EU framework.
Free-zone activities such as consulting, holding or IP require genuine presence, staff and ongoing reporting obligations.
Opening a bank account is significantly more difficult if there is no genuine UAE presence.
Using a Dubai company while remaining fully tax-resident in Europe can lead to a tax reclassification and back taxation in your home country.
The UAE offers 0% personal income tax as well as 0% corporate tax on annual profits up to AED 375,000 (approx. EUR 87,000). Above that, a corporate tax rate of 9% applies. Many international entrepreneurs can remain tax-advantaged if the structure is set up correctly and the conditions are met.
The UAE was removed from the FATF grey list in 2024. In addition, since mid-2025 Dubai has no longer been on the EU AML high-risk list. Nonetheless, European tax authorities continue to scrutinise UAE structures carefully, particularly where clients remain tax-resident in the EU or use Dubai companies without genuine local substance.
Dubai has a strong banking sector. However, access to bank accounts requires extensive compliance checks. Most banks require UAE residency, leases for business premises and evidence of real business activity. Anonymous structures are no longer accepted. European banks often apply enhanced due diligence to UAE companies.
Dubai’s legal system is generally based on civil law. Many free zones, such as the DIFC, are nevertheless modelled on the common-law system. In most zones, 100% foreign ownership is permitted. Companies are also subject to economic substance requirements, especially for activities such as consulting, holding or IP structures.
It is expressly not recommended to keep tax residence in Europe while using a passive UAE company without genuine local presence.
Contact us to find the right alternative jurisdiction for your personal and corporate structure.
Setting up the company can often be done remotely. However, for opening a bank account and smooth day-to-day operations, at least some personal presence is usually required. In many cases, UAE residency makes the process considerably easier.
This is risky, especially if you live in Europe and operate the company as a consulting, holding or IP structure without a team, office, contracts or actual local execution.
VAT registration is mandatory as soon as taxable turnover exceeds AED 375,000. If there is genuine business activity and the requirements are met, registration can be completed without much difficulty.
| Tax Burden | Banking | Reputation | Bureaucracy | Legal Security | Costs | |
|---|---|---|---|---|---|---|
| USA | 21-0% |
|
|
|
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from EUR 1,900 |
| Singapore | 0% |
|
|
|
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from EUR 2,950 |
| Hong Kong | 0% |
|
|
|
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from EUR 1,900 |
| Cyprus | 15% |
|
|
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from EUR 1,900 |
| Malta | 5% |
|
|
|
|
from EUR 2,500 |
| Ireland | 12,5% |
|
|
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from EUR 1,950 |
| Trust | 0% |
|
|
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from EUR 4,900 |
| England | 25-19% |
|
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from EUR 1,000 |
Your country of residence may impose tax and reporting obligations for foreign business activities and dividend income, in some cases even if profits are not distributed.
Depending on your personal circumstances, a suitable holding structure may be required to comply with tax rules and avoid unnecessary tax risks.
To determine which jurisdiction and structure best meet your requirements, please use the contact form and describe your plans in as much detail as possible.
Our advisers will be happy to review your case and advise you accordingly.
