Five key questions when moving to, or living in, the UAE

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Five key questions when moving to, or living in, the UAE

Moving to a new country requires advance planning, especially when it comes to anticipating the legal and tax consequences of such a project in order to avoid any surprises. Whether you are planning to move to Dubai, Abu Dhabi or any another Emirate, you should pay attention to the kind of visas required for the UAE. It is also key to clarify your tax situation with your country of departure, find out what specific steps are required for entrepreneurs and business owners, and be aware of the laws that will apply to you in your new country of residence.

Below, we outline five key questions to consider before moving.

 

1. What kind of visa do you need? Do you need to apply for an investment, retirement or employee visa?

  • The type of resident visa to apply for is the natural starting point for anyone wishing to move to the UAE. The type of visa you need will depend on your life plans and the reason for moving to the Emirates, along with the expected duration of your stay.
  • In general, expatriates receive residence permits for a fixed time period based on a sponsorship system.
  • However, the Emirates recently added a new category of visas valid for longer periods, notably up to ten years. These new visas are primarily for retirees, investors, entrepreneurs and highly skilled professionals and students.
The Emirates recently added a new category of visas valid for longer periods, notably up to ten years

2. Have you chosen the UAE for its favourable tax climate? If so, have you cut tax ties with your country of departure?

  • Leaving your home country is not without its tax consequences. If you wish to permanently leave your country, you should plan your departure well in advance.
  • Check that you have dealt with all of the formalities associated with your departure and that you have met all of your tax obligations.
  • Make sure you have truly planned out your new life in the UAE, so that you can shift your vital interests as well as your cultural, financial and social connections.
  • Take into account the tax obligations that could remain following your departure. Each country defines its own tax regime, and it is likely that your country of departure will continue to tax you on certain types of assets – this is often the case with real estate assets, for example.

 

3. Do you plan on setting up a business in the UAE? What‘s the best structure?

  • The type of company you choose to set up will be largely dictated by the nature of the business activity you intend to engage in. Do you intend to develop an international or local business? Do you need to establish a physical presence in the UAE such as setting up an office? Do you intend to set up in one of the UAE's many free zones, or create a local business?
  • If you opt for a free zone, take into account certain restrictions associated with this type of company. In particular, you should make sure that the business activity you wish to engage in is a recognised activity for companies operating in the free zone and that you obtain an ad hoc licence.
  • If, on the other hand, you wish to start a local business, find out the applicable rules from the competent authorities – particularly those regarding shareholding. Since 1 June 2021, creating a local company no longer requires an Emirati partner to hold an interest of at least 51%, with the exception of certain so-called "strategic" activities as defined by the competent authorities of each Emirate state.
Since 1 June 2021, creating a local company no longer requires an Emirati partner to hold an interest of at least 51%

4. What laws will apply if there are significant changes in your family situation, such as separation, divorce, child custody disputes, etc.?

  • First and foremost, it is important to remember that family law and personal relationships are governed by Sharia law by default. Therefore, Sharia law would govern your divorce and the related consequences, including child custody and visitation rights, maintenance payments or the settlement of matrimonial property.
  • However it is, in theory, possible for non-Muslim expatriates to file a petition for divorce requesting application of the laws of the country in which the marriage was performed or those of the husband's country of citizenship.
  • In practice, however, this can prove much more difficult than expected. This means that you must ensure that you are informed of your rights and obligations and the issues associated with the prevailing legal system.

 

5. How will you organise your estate and plan your succession?

  • Once you have duly severed tax ties with your country of departure, your income and movable assets will no longer be an issue during your stay in the Emirates. Nevertheless, some assets may remain subject to foreign taxation, such as withholding tax or inheritance tax, for example.
  • With regard to inheritance, it is essential to analyse your situation and review your planning, even if you have already planned your succession before moving. The issue of inheritance is important for non-Muslim expatriates that reside in the UAE, since the principal source of law in regards to inheritance is Sharia law.
  • Despite the recent legislative changes concerning inheritance (allowing the application of the expatriate's country of citizenship by default) a will remains a useful precaution.
  • Succession planning in the form of a will is a relatively complex legal process that requires the assistance of local legal counsel.
  • For details on this topic please download the Small Talk brochure available in English on the right-hand side of the page.

If you have any further questions about moving to the UAE, please do not hesitate to contact us.

Lombard Odier has been providing wealth management services in the Middle East for more than 50 years. We have a representative private banking office in Dubai and a branch in Abu Dhabi. To find out more about Lombard Odier's expertise in the Middle East, visit our dedicated page.

Important information

This document is issued by Bank Lombard Odier & Co Ltd or an entity of the Group (hereinafter “Lombard Odier”). It is not intended for distribution, publication, or use in any jurisdiction where such distribution, publication, or use would be unlawful, nor is it aimed at any person or entity to whom it would be unlawful to address such a document. This document was not prepared by the Financial Research Department of Lombard Odier.

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