Tax residency in the United Arab Emirates is attracting growing interest among Polish taxpayers. Few, however, appreciate that the promises made by local corporate service providers and financial institutions—eager to capture foreign investor capital—do not always align with reality.
In light of specific provisions of the double taxation treaty between Poland and the United Arab Emirates, UAE tax residency appears to be a solution of questionable effectiveness. It must be emphasized that even where such residency is fully legitimate under local Emirati regulations, it may not be recognized by the Polish tax authorities—a matter I have analyzed in detail in the articles “Without Emirati Citizenship, Dubai Residency Does Not Protect Against Taxation in Poland” (April 2024) and “Precedent-Setting Tax Ruling on the Taxation of Income of a Polish National Residing in the Emirates” (November 2024).
The United Arab Emirates and its residency regime also encounter skepticism within the banking sector—the jurisdiction is regarded as one still in the process of implementing comprehensive anti-money laundering procedures. In practice, this translates into difficulties executing wire transfers to and from the Emirates, the risk of frozen funds, and even termination of banking relationships.
The Emirates have also ceased to be a tax-free jurisdiction. While certain structures still permit the registration of companies exempt from corporate income tax, it is essential to examine the consequences of such arrangements under Polish controlled foreign corporation (CFC) rules.
Kancelaria Prawna Skarbiec offers expertise in solutions based on UAE tax residency and Dubai company formation. We share practical experience regarding the actual tax implications in Poland, relationships with banks and financial institutions, and proceedings before the National Revenue Administration.
UAE Residency
Dubai Company Formation – our expert blog dedicated to business relocation to the Emirates and private relocation to Dubai
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The Golden Visa Program in the United Arab Emirates
According to a report by Henley & Partners, which tracks global trends in private wealth migration and investment, the United Arab Emirates is expected to attract 4,500 new millionaires this year. The Emirates ranked second behind Australia, which—according to forecasts—will see the world’s largest net inflow of high-net-worth individuals, estimated at 5,200 millionaires. The report focuses on individuals with assets exceeding $1 million. Singapore placed third with a projected net inflow of 3,200 HNWIs—the highest figure in the country’s history. The United States ranked fourth with an expected inflow of 2,100 millionaires, while Switzerland, projected to attract 1,800 wealthy residents, came in fifth. The report indicates that the UAE Golden Visa program is effectively attracting foreign investment and talent. Dubai alone recorded an 18 percent increase in the number of multi-millionaires among its residents in 2022.
UAE Residency and Income Tax
The introduction of corporate income tax in the United Arab Emirates has prompted questions among the country’s residents about further changes to the tax system. In 2017, the UAE was placed on the EU blacklist of jurisdictions not cooperating in the creation of fair and transparent tax systems—a significant reputational blow for a country that had spent half a century building its position as a credible player in the global economy.
In January 2018, one month after being placed on the EU blacklist, the government introduced VAT on most goods and services, with exceptions for selected sectors such as healthcare and education. Although the rate was only 5%, its introduction represented a symbolic and significant change for a country that had for decades been perceived as “tax-free.”
In June 2023, the UAE government took a further step by introducing corporate income tax—the first form of direct taxation under its new economic strategy. The current rate of this tax is 9%, lower than in other Gulf Cooperation Council countries: Saudi Arabia (20%), Oman and Kuwait (15% each), and Qatar (10%, with 35% for oil companies). Corporate income tax rates in the GCC region generally remain well below the global average of 23.4%.
United Arab Emirates – Anti-Money Laundering Efforts
The United Arab Emirates seized and confiscated assets worth over $354 million between March and mid-July 2023 as part of anti-money laundering and counter-terrorism financing efforts, a senior government official announced on September 18.
The UAE also imposed more penalties for money laundering in the first half of 2023 than in all of 2022, 2020, and 2019 combined, announced Hamid Al-Zaabi, Director General of the Executive Office for Anti-Money Laundering and Counter-Terrorism Financing.
“The United Arab Emirates has completed a comprehensive review of progress on AML/CFT [anti-money laundering and counter-terrorism financing] procedures made in the first half of 2023, which indicates significant overall improvement,” stated Al-Zaabi.
The official also emphasized that the confiscation of illicit proceeds represents the “highest priority” for Emirati authorities. Ensuring that proceeds of crime are confiscated and do not re-enter the financial system is intended to serve as a deterrent and prevent further illegal activity.
