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UAE in general and Dubai in particular, has become a place more and more people consider as a potential place to relocate.

Over the past years, UAE has increasingly emerged as a popular jurisdiction for relocation of High Net Worth Individuals (HNWIs), and a strong alternative to traditional jurisdictions including UK, Switzerland and Monaco.

With no taxes on individuals, straightforward administrative procedures and low processing costs, political stability, excellent accessibility, good health care, sound education system and sunny weather throughout the year, the UAE alternative is very attractive. Further, its position at the heart of the Middle East, its airline hub - one of the biggest and best - and its excellent infrastructure render UAE a very attractive option.

UAE’s position has aslo been reinforced by the “Arab Spring”, the ongoing tax back lash in other relocation hubs,for example,  amended UK tax regimes pertaining to non-doms, signs of erosion of the lump-sum tax system in Switzerland and the decline of the PR (Permanent Resident) regime in Singapore as well as plans from various countries to “tighten the screw” on Europe’s tax heavens.

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Individuals other than UAE and GCC citizens must have a residence visa if they want to live in the UAE.

Obtaining a residence permit is the primary condition for being considered as resident in the UAE, hence a taxable person.

As a general rule, one has to have a sponsor in order to apply for a residence permit in the jurisdiction. For many expatriates, the company that employs them will act as their sponsor and secure them residence visa.

For those who do not come on an employment contract, there are two other ways for obtaining UAE residency: 

investment in real estate (property residence visa)
set up of corporate structure to act as sponsor

Real Estate Investor / Property Residence Visa 

UAE government in June 2011 introduced a new system extending the validity of the visa granted to real estate investors to up to 3 years. 

The following rules and conditions govern the issuance of a real estate investor visa: 

the property is built and ready for accommodation
the applicant proves ownership (title deed issued by the Land Registrar)
the property is worth minimum AED 1 million (equivalent to US$300.000) with no mortgage
the applicant’s income is higher than AED 10.000 (US$3.000) monthly 
Some other features: 

1 only one sponsorship can be obtained for each property,  irrespective of size. This does not restrict the main sponsor to  act as sponsor for family members
2 when the property is sold, the main sponsorship as well as  the sub-sponsorship connected to the property are  discontinued
3 since the property must be held in personae, no indirect  holding through a company is allowed, leaving no room for  inheritance planning 

In order to obtain a residence permit, a new real estate investor must follow the following steps: 

approach the Dubai Land Department with the title deed along with passport copy and passport size photo
after payment of the fee, the Dubai Land Department will issue an approval certificate
the owner has to approach the Department of Economic Development, which will then issue a trade license
when the trade license is issued, the property owner can approach the Immigration section in the Land Department, which will issue a 2 year investor visa 

The total cost of a 2 year UAE real estate investor residence visa is approximately AED 9,000 (US$2,450), corresponding to:

trade licence 5,000 AED
residence visa 7,500 AED

and the renewal cost is similar.

The processing of the residence permit takes between 3 to 4 weeks. 

In Dubai, Article 4 of Law No. 7 permits individuals of non-GCC countries (“Foreign Investors”) and companies owned in full or in part by foreign investors to acquire, in certain areas of Dubai: 

absolute ownership of land without restrictions as to time, and
usufruct or leasehold of land for a period not exceeding 99-years 

In the past, any offshore company, wherever registered, was authorized to hold properties in Dubai. However, as of January 2011, the Dubai Land Department does not allow the registration of acquisition of properties in Dubai by foreign offshore (BVI, Cayman Islands, Bahamas etc) and local (RAKIA/ RAK) companies. 

This rule has only one exception: the companies registered in UAE’s JAFZA (Jebel Ali Free Zone Authority). 

There is a 4% fee levied by the Dubai Land Department for the registration of title to real estate. That fee, under current legislation, ought to be split equally between the buyer and the seller. 

The fee applies to purchases of real estate by foreign Investors and locals alike. 

In case of transfer of ownership from an individual name to a JAFZA company (whose shareholder is the same individual), it seems to be possible to reduce the cost of transfer to 0.125% from the standard 2% charge. 

Developers of real estate may also operate their own system of fees payable in respect of purchases within their developments. There is no one system of fees operated by all developers.

Corporate structure

The other way to obtain residency is through a corporate structure. 

As a general rule, one has to have a sponsor in order to apply for a residence permit in the jurisdiction. For foreigners, setting up a company is a practical way of obtaining sponsorship. 

As far as the company is concerned, it must have physical presence in the UAE. In that regard, the most interesting and cost effective options are proposed by free zones situated in the northern Emirates. Usually, these options consist of “flexi desks” or “flexi offices”. 

Subject to the sponsoring company being properly maintained ie the company’s license must be renewed on a yearly basis, the residence permit is valid for a period of three years. Then, the resident ie the person who received a residence permit via his company, can sponsor the members of his family, for a similar period of 3 years. 

The cost of a 3 year UAE residence visa is around AED 7.500 (US$2.000) (one time fee). 

The assessed costs for the set up of a Free Zone company (say a RAK FTZ) are as follows, including the processing of one residence permit: 

Year 1: US$10,000

The maintenance costs from the second year onward are as follows:

Year 2 onwards: US$7,500

The setting up process for a free zone company usually takes no more than 7 to 10 working days. 

The processing of a residence permit through a free zone company is a bit longer since it might take between 18 and 20 working days.


Shall one acquire a property and go for the real estate investor (REI) permit or set up a corporate structure? 

the real estate permit has the advantage of being linked to the acquisition of a property: this is the easiest way to take residency in the UAE since by acquiring a property, one can apply and get a residence permit.

Furthermore, the overall cost of a real estate permit is cheaper than the other possibility since the latter requires the establishment of a company. 

This program has been considerably modified since its  introduction in the mid-2000, and may be changed in the  future. As corporate ownership is not allowed, in case of  demise of the expatriate, the transfer of the property as  well as the designation of the heirs and their respective portion may be done according to Sharia’h law. Proper advice must be sought. 

the residence permit through a corporate structure is a well established process, predictable and certain. The cost of the residence permit is cheaper than a REI Permit and its duration longer (3 years against 2 years for new real estate investors). However, this option is more costly than the other one since it requires the set up and maintenance of a free zone company. 

Considering the above, the residence permit via the acquisition of property in Dubai is in our opinion a good option and recommended for the purpose of tax relocation  in the UAE. It might suit families but not, for example,  relatives willing to share the same residence. 



Matters of inheritance in the UAE are governed by two laws: 

the Federal Law No. 5 of 1985 regarding the law of Civil Transactions in the UAE (the “Civil Code”) (see Annex 6), and
the Federal Law No. 28 of 2005 regarding UAE Personal Affairs Law (the “Personal Affairs Law)

Demise while living in UAE – Importance of Religion 

When someone residing in the UAE passes away, his estate will be opened in the UAE.

As a general rule, inheritance issues for Muslim are dealt with in accordance with Sharia’h (a system of Islamic law based on the Quran), whereas for foreigners, the law of the deceased’s home country applies. 

Demise of a Muslim

In case of death of a Muslim, his inheritance and will, if any, will be respectively distributed and enforced in accordance with Sharia’h law. 

According to Sharia’h law, only a Muslim can inherit from another Muslim. Therefore, in case a Muslim is married to a non-Muslim, it is crucial to have a will in place in order for the non-Muslim spouse to be entitled to up to 1/3 of the estate, which is the freely disposable portion according to Sharia’h law. 

In the absence of a will, the non-Muslim partner will not receive any portion of the estate since he/she will not be considered an heir.

Demise of a non- Muslim 

In case of death of a non Muslim, the court should apply the law of the deceased’s home country. In practice, this rule is sometimes difficult to follow. 

Therefore, it seems that the Courts will have the discretion as to whether the laws of the country to which the deceased belonged are adopted or if the Sharia’h law is applied. 

In either case, it is essential that a valid will is available to the Courts because should the Court decide not to use the law of the country to which the deceased belonged but instead apply UAE Sharia’h law, then 1/3 of the estate will most probably be liquidated and distributed in accordance with the deceased will.


The Court of First Instance has jurisdiction to handle inheritance matters. 

In theory, the Court’s jurisdiction covers all assets of the deceased, regardless of their location and nature. In other words, it will cover the movable as well as the immovable assets located both in the UAE and abroad. 

Practically speaking, however, Courts tend to restrict the probate procedure to assets located in the UAE. 

UAE located properties 

As stated earlier, the estates of Muslims should be governed by Sharia’h law, and of Non-Muslims by the law of their home country. 

It is not clear, however, whether this rule applies to real estate located in the UAE since: 

1. the Civil Code states a) that the law of the home country applies to matters of inheritance, and b) that where a will made by a foreigner involves the disposal of real estate in  the UAE, then UAE law applies
2. the Personal Affairs Law, even if it confirms the fact that the laws of the home country apply to matters of inheritance for  foreigners, makes no specific reference to real estate located  in the UAE 

Ultimately, it is up to the UAE Courts to decide which laws to apply on a case by case basis. If the Court decides to apply local law, or if the law of the deceased’s home country states that local law applies to matters of inheritance, then the provisions of Sharia’h apply. 

One way to avoid the application of UAE law to the disposal of property in UAE is to incorporate a free zone company as a purchase vehicle. 

If the property is owned in the company’s name, ownership of the property can be transferred via shares in the company.

Therefore, if a shareholder dies, it is only shares that are disposed of, and not the property. 

This avoids the specific provision in the Civil Code that states matters of real estate must be dealt with in accordance with the UAE law, and means that the general provision allowing the laws of the home country to apply to general matters of inheritance are followed. 



The UAE and more especially Dubai, is a favourite relocation country, mainly due to: 

exemption from income tax for individuals
exemption from corporate tax for companies not active in finance and oil
no quotas on number of issued residence permits
no requirement to obtain a “fiscal quitus” from a foreign country
no minimum requirement regarding time spent annually other than visiting the UAE minimum once every six months
no requirement to effectively reside in the UAE
presence of internationally recognized financial, legal and tax services providers
primary hub and platform to access international business
political stability and security
superior accommodation standards and high standard of living
good health care system

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