Introduction:

Dubai has earned a global reputation as a tax haven, attracting both individual expatriates and multinational corporations seeking an advantageous financial environment. Unlike many jurisdictions, Dubai imposes no personal income tax, no capital gains tax, and no inheritance tax, making it particularly appealing to high-net-worth individuals and professionals relocating from higher-tax countries. For businesses, the corporate landscape is equally attractive: outside of certain activities in the oil and gas sector and branches of foreign banks, there is no general corporate income tax, and free zones across the emirate offer additional incentives such as full foreign ownership, repatriation of profits, and customs exemptions.  

This favorable tax regime must be understood in the broader context of Dubai’s economic strategy. Over the past few decades, the emirate has deliberately diversified its economy away from oil, positioning itself as a global hub for finance, trade, logistics, and tourism. Tax advantages are a central pillar of this diversification effort, designed to attract international investment and build an innovation-driven economy. The result is a dynamic environment where entrepreneurs, professionals, and multinational enterprises can operate with minimal fiscal friction.  

For Europeans, and specifically German, Austrian, and Swiss nationals, Dubai’s tax landscape is further complemented by bilateral agreements aimed at avoiding double taxation. Double taxation agreements (DTAs) have been concluded between the United Arab Emirates and Germany, Austria, and Switzerland, ensuring that income is not taxed twice in both jurisdictions. These treaties provide clarity on how various types of income, such as business profits, dividends, and pensions, are allocated between the contracting states. For expatriates and investors, this framework enhances Dubai’s appeal by providing legal certainty and reinforcing the stability of cross-border financial planning. 

Taken together, the absence of direct taxation, the emirate’s forward-looking economic policies, and the protection offered by international agreements position Dubai as one of the most attractive destinations worldwide for those seeking to optimize their tax burden while benefiting from a vibrant and globally connected economy.  

On the Map & What Others Say

Situated on the southeastern coast of the Arabian Peninsula, Dubai is one of the seven emirates that make up the United Arab Emirates (UAE). It lies along the southern shore of the Persian Gulf, bordered by the emirate of Sharjah to the northeast and Abu Dhabi to the southwest. This strategic position has historically made Dubai a key hub for trade between East and West, an identity it continues to embrace today with its modern air and sea transport infrastructure connecting Europe, Asia, and Africa. Its cityscape rises dramatically from the desert, offering a distinctive contrast between vast stretches of golden dunes and a futuristic skyline.  

Travel writers and lifestyle publications frequently highlight this juxtaposition as one of Dubai’s defining features. A number of travel bloggers emphasize the sense of ambition and spectacle underlying the cityscape, often pointing to iconic landmarks such as the world’s tallest tower and its man‑made islands as symbols of its global outlook. International travel magazines regularly describe Dubai as a “cosmopolitan crossroads,” noting how the emirate balances deep-rooted Emirati traditions with an exceptionally diverse expatriate population that has shaped its dining scene, cultural offerings, and nightlife.  

Others comment on Dubai’s allure as a luxury destination, with descriptions in leisure publications often focusing on high-end shopping malls, desert resorts, and ultramodern entertainment complexes. At the same time, cultural commentators underscore that what makes the city fascinating is not only its architectural achievements and retail offerings but also its vibrant blend of cultures—more than 200 nationalities live and work there, bringing a unique sense of internationalism. In this way, Dubai is frequently portrayed as both a city of extravagance and a place where ancient heritage subtly informs a dynamic contemporary lifestyle.  

How the Tax System Works in Dubai

Dubai’s tax system is often highlighted as one of the most attractive features of its global business environment. Built on a policy framework aimed at encouraging investment and economic diversification, the system is markedly different from that of most Western countries. Instead of relying on income-based taxation, Dubai raises much of its public revenue from fees, government services, customs duties, and value-added tax (VAT). For both individuals and corporations, this means a comparatively low direct tax burden, though recent reforms have introduced some important nuances.

At the personal level, residents and expatriates benefit from the absence of personal income tax. Salaries, wages, and most forms of personal earnings are not taxed, allowing professionals the potential for significantly higher net take-home pay compared to jurisdictions where income tax can range from 20% to 40% of annual earnings. For example, a professional earning USD 100,000 per year in Dubai would usually retain that entire amount, subject only to minimal deductions such as social security contributions (applicable primarily to UAE nationals).

From a corporate perspective, the system has historically been equally accommodating, with most companies outside of oil, gas, and banking enjoying no corporate income tax obligations. However, beginning in June 2023, Dubai—aligned with broader federal UAE policy—implemented a new corporate tax regime, applying a 9% corporate income tax on business profits exceeding approximately AED 375,000 (about USD 102,000). Profits below this threshold remain untaxed, ensuring that small and medium-sized enterprises continue to enjoy lighter obligations, while multinational corporations are taxed more in line with emerging global standards.

In addition to income-related considerations, Dubai’s tax environment also includes indirect taxation. Since 2018, a value-added tax at a flat rate of 5% has been applied to most goods and services. While relatively low by global standards, this measure represents a new and consistent revenue stream for the government. There are also selective excise taxes, such as those on tobacco products and sugary drinks, typically ranging from 50% to 100%, aimed at both raising revenue and encouraging public health goals.

Customs duties in Dubai are generally modest, with most imports subject to around a 5% levy, though certain goods may be exempt or taxed at different rates. Real estate transactions also incur fees, typically around 4% of the property value, which for a property worth USD 500,000 would equate to roughly USD 20,000 at the time of transfer.

In summary, Dubai operates on a tax framework designed to balance its reputation as a tax-friendly jurisdiction with the need to adapt to international standards and domestic fiscal requirements. Individuals benefit from the absence of income tax, while businesses must now account for a targeted corporate tax alongside existing VAT and customs obligations. In the sections that follow, we will examine the personal tax system in more detail, explore the corporate tax regime and its recent changes, and consider other taxes and fees that affect both residents and businesses operating in Dubai.

Taxation of Individuals

Unlike many jurisdictions around the world, Dubai has built a reputation for offering a largely tax-free environment for natural persons. This policy is one of the key drivers behind its attractiveness to expatriates, entrepreneurs, and digital nomads. Understanding the tax treatment of residents and non-residents in Dubai provides crucial context for anyone considering relocating or working there. 

Income Tax on Individuals

At present, Dubai does not levy personal income tax on salaries, wages, or other employment income—regardless of whether the individual is a local resident or a foreign national working in the emirate. Likewise, there is no personal tax on investment income such as dividends, interest, or capital gains at the individual level. This zero-income-tax framework applies uniformly and is not subject to progressive rates or thresholds.  

For example:  

• A Dubai resident earning AED 50,000 per month in employment income will not pay any personal income tax on those earnings.  

• Similarly, a non-resident digital nomad who contracts with clients abroad and receives payments into a Dubai bank account is not taxed on that income in Dubai.  

Deductions and Allowances

Because there is no personal income tax system in place, there is also no regime for deductions, allowances, or credits. In practice, this means individuals do not need to maintain records of professional expenses for tax purposes or claim any family-related deductions.  

Special Tax Regimes for Expatriates and Digital Nomads  

Although Dubai does not differentiate between citizens, residents, and expatriates in terms of taxation, it has implemented various residency structures designed to attract global talent. The most relevant for mobile professionals is the "Virtual Working Programme," often referred to as Dubai’s digital nomad visa. Under this program, remote workers can reside in Dubai while working for foreign employers. Importantly, participation in such schemes does not create an obligation to pay personal income tax locally, as the emirate maintains its zero-tax regime for individuals.  

Expatriates, however, must remain mindful of their home country’s tax rules. For instance, U.S. citizens and long-term residents remain subject to U.S. taxation on worldwide income, regardless of where they live. Similarly, other countries impose exit, residence, or remittance-based tax rules that may complicate the assumption of “tax-free living” in Dubai. Therefore, foreign nationals often need to obtain professional cross-border tax advice to ensure compliance both at home and abroad.  

Summary

From the perspective of natural persons, Dubai offers one of the most straightforward tax frameworks in the world: no personal income tax, no capital gains tax, and no wealth tax. Individuals—whether expatriates, residents, or non-residents—benefit from this neutral, zero-rate regime. The absence of deductions is simply the reflection of an absence of tax liability, making Dubai particularly appealing for professionals seeking a tax-efficient base of operations.  

Taxation of Corporations

Dubai’s corporate tax regime has historically been one of the most business friendly in the world, and recent reforms have sought to balance its attractiveness with the international push for greater tax transparency. As of June 2023, the United Arab Emirates—including Dubai—implemented a federal corporate income tax (CIT), marking a significant shift in the region’s fiscal policy.  

Corporate Income Tax Rates  

The standard corporate tax rate in Dubai is 9% on taxable profits exceeding AED 375,000 (approximately USD 102,000). Profits up to that threshold are taxed at 0%, which provides relief for startups and small businesses. For certain multinational corporations with global revenues above EUR 750 million (about USD 820 million), a 15% rate may apply under the OECD Pillar Two global minimum tax framework.  

It is worth noting that many entities engaged in natural resource extraction continue to fall under separate emirate level tax regimes, with potentially much higher rates that can reach up to 55%, though these apply only to the oil and gas sector or foreign banks.  

Deductible Expenses

The tax legislation allows businesses to deduct most expenses that are wholly and exclusively incurred for the purposes of generating taxable income. Deductible expenses typically include employee salaries, rental costs, depreciation of qualifying assets, and business operating expenses. However, the law restricts deductions in certain areas—for example, interest expense deduction limits apply to curb excessive debt financing, and non‑deductible expenses include fines, penalties, and expenditures not tied to ordinary business activities.  

Special Economic Zones and Incentives

Dubai is widely recognized for its extensive network of over 30 free zones, including the Dubai International Financial Centre (DIFC), Jebel Ali Free Zone (JAFZA), and Dubai Multi Commodities Centre (DMCC). Companies established within these zones often enjoy special incentives such as:  

• 0% corporate tax on qualifying income derived from activities conducted outside the UAE or with other free zone entities.  

• Full foreign ownership without the need for a local partner.  

• Exemptions from customs duties on imports and exports.  

• Simplified repatriation of capital and profits, without restrictions on foreign currency inflows or outflows.  

To maintain these benefits, free zone companies must comply with strict regulatory frameworks and ensure that they do not conduct substantial business with the UAE “mainland” (outside free zones). If such mainland activity occurs, the relevant portion of income may be subject to the regular 9% corporate tax.  

Conclusion

Dubai’s evolving corporate tax system strikes a balance between remaining globally competitive and adhering to international tax standards. With a relatively low statutory tax rate, clear deductibility rules, and wide ranging incentives through free zones, Dubai continues to attract multinational corporations, financial institutions, and entrepreneurs seeking a tax-efficient base in the Middle East.  

Other Significant Taxes

While Dubai is widely recognized for its attractive tax environment, it does impose certain indirect and sector-specific taxes that expatriates, investors, and businesses should be aware of. Unlike high-tax jurisdictions, Dubai’s approach is generally light, but understanding these nuances is essential for effective financial planning. Below is an overview of key tax categories beyond the corporate tax framework.  

Capital Gains Tax  

Dubai does not levy a general capital gains tax on individuals. This means that gains from selling securities such as stocks, bonds, or even cryptocurrencies are not taxed at the personal level. For instance, if a resident sells $100,000 worth of shares originally purchased for $50,000, the $50,000 gain is not subject to tax. Similarly, profits arising from crypto disposals enjoy the same favorable treatment. However, companies that fall under the UAE’s new corporate tax regime—introduced in 2023 at a standard rate of 9% on profits exceeding approximately USD $102,000 (AED 375,000)—may be taxed on capital gains if realized as part of business income.  

Real Estate Transactions

While no capital gains tax applies to real estate sales, Dubai imposes a property transfer fee. This tax is currently set at about 4% of the property’s value, typically shared between buyer and seller. For example, purchasing a property valued at $500,000 in Dubai would incur an additional $20,000 transfer fee payable to the Dubai Land Department. This cost is one of the most significant transactional levies for property investors.  

Dividend Income

Dividends paid by both domestic and foreign companies are not taxed at the individual level in Dubai. Non-residents receiving dividend distributions from UAE entities are also exempt from dividend withholding tax. For companies falling under the corporate tax regime, dividends from qualifying shareholdings may also be exempt, consistent with international participation exemption practices.  

Since January 2018, the UAE has applied a VAT system at a relatively low rate of 5% on most goods and services. This is considerably below global norms, where VAT/GST rates often range from 15% to 25%. For instance, dining out for $100 at a Dubai restaurant would cost an additional $5 in VAT. Certain categories, such as healthcare, education, and international transport, may be zero-rated or exempt, reducing costs in those areas.  

Wealth and Property Taxes

Dubai does not impose an annual wealth tax or net-worth tax, a key factor supporting its reputation as a private wealth hub. Likewise, there is no recurring property tax on owned real estate. Property owners are primarily responsible for utility and maintenance charges, but ongoing taxation in the Western sense (e.g., 1%–2% ad valorem yearly property tax, common in the U.S. or Europe) is absent.  

Inheritance and Gift Taxes

The UAE does not currently apply inheritance or gift taxes. However, succession planning for expatriates remains important because family estates are often governed by Sharia law unless alternative arrangements—such as registering a will with the DFSA (DIFC Wills Service Centre) or Abu Dhabi Judicial Department—are established. Without this, assets could be distributed in ways that diverge from an expatriate’s intentions.  

Social Security and Pension Contributions

Social security obligations in Dubai are limited primarily to UAE and GCC nationals. Emirati employees are required to contribute around 5% of their income, matched by an employer contribution of roughly 12.5% to 15%. In contrast, foreign expatriates working in Dubai are generally not subject to UAE social security contributions. Instead, expatriates may continue paying into their home country’s system (depending on bilateral agreements) or rely on private pension or end-of-service gratuity schemes. For example, a foreign employee earning $8,000 per month would not pay social security contributions in Dubai, significantly reducing mandatory payroll deductions relative to employment in Western Europe.  

In summary, Dubai’s taxation landscape extends beyond “zero income tax” slogans but remains exceptionally investor-friendly. With no capital gains, dividend, or inheritance taxes for individuals, limited real estate transaction costs, and a modest 5% VAT, Dubai positions itself as one of the most competitive jurisdictions for expatriates and businesses seeking tax efficiency.

Who Benefits Most from Moving to Dubai?

Dubai’s favorable tax system and business environment make it an attractive prospect for many, but not everyone will find the move equally advantageous. The city’s appeal is highly context-dependent, and the benefits vary depending on personal circumstances, financial goals, and lifestyle preferences.  

Entrepreneurs and Business Owners

One of the most significant groups to benefit from relocating to Dubai are entrepreneurs. The emirate offers zero personal income tax, no capital gains tax, and a corporate tax regime that remains relatively light compared to global standards (with exceptions for certain businesses under the recently implemented 9% corporate tax on profits exceeding AED 375,000 for mainland companies). Free zones provide additional benefits such as full foreign ownership, repatriation of profits, and streamlined regulatory processes. This ecosystem is particularly advantageous for international business owners, startups, and investors seeking a strategic location with access to Middle Eastern, African, and Asian markets.  

Digital Nomads and Remote Workers

Dubai has increasingly positioned itself as a hub for digital nomads and remote workers. With its well-developed infrastructure, world-class connectivity, and the availability of remote work visas, professionals who earn their income abroad can enjoy a tax-free lifestyle while benefiting from Dubai’s amenities. For individuals from high-tax jurisdictions, the absence of personal income tax can significantly increase disposable income. However, one must consider visa requirements, cost of living, and the need to maintain tax residence status outside of one’s home country to secure the full benefit.  

High-Income Earners and Expat Professionals

Executives, consultants, and specialists whose compensation packages are substantial benefit enormously from Dubai’s tax regime. In many cases, highly skilled professionals are able to retain a far larger portion of their salary compared to working in Europe, North America, or other high-tax regions. Coupled with extensive expatriate communities, international schools, and healthcare options, Dubai is particularly suited for those seeking career advancement without the burden of high taxation.  

Retirees

Dubai is an emerging destination for retirees, especially with the introduction of the long-term retirement visa program. Retirees who rely on pensions, investment income, or savings can live without worrying about taxation of their foreign-sourced income. However, the cost of living, requirement to maintain certain financial thresholds for visa eligibility, and the absence of a traditional social welfare system (such as subsidized healthcare) may limit Dubai’s suitability for retirees of more modest means. Wealthier retirees, on the other hand, may find great value in Dubai’s safety, infrastructure, and lifestyle offerings.  

For Whom Dubai May Not Be Suitable  

While Dubai offers clear benefits to many, it is not ideal for everyone. Cost of living—particularly housing, schooling, and healthcare—can be considerably higher than in many countries, potentially offsetting tax savings for lower to middle-income individuals. Those seeking permanent residency or a pathway to citizenship may also find Dubai less attractive, as residency is tied to employment or visa sponsorship rather than offering naturalization opportunities. Furthermore, individuals who prioritize liberal social policies or natural landscapes over urban luxury may find the lifestyle less compatible.  

In short, Dubai is exceptionally advantageous for entrepreneurs, high-earning professionals, and globally mobile individuals who are able to leverage the tax system and business advantages. Retirees with sufficient wealth can also enjoy the benefits, though with more constraints. Conversely, those with lower incomes, strong ties to countries with exit taxes or ongoing tax obligations, or lifestyle preferences that do not align with Dubai’s fast-paced environment may see fewer advantages in making the move.  

Special Considerations for Relocation

Relocating to Dubai involves a number of practical steps that extend beyond tax planning. While its favorable tax regime often attracts expatriates, successful relocation requires attention to immigration procedures, integration into essential systems, and compliance with local regulations.

Residence Permits and Visas

Foreign nationals generally require a residence visa to live and work in Dubai. The most common pathways include employment sponsorship, company formation, property ownership, or a family visa through a resident relative. Employers in Dubai typically take responsibility for securing employment visas and residency permits on behalf of their staff. Alternatively, entrepreneurs and investors can apply for longer-term residency options, such as the 5- or 10-year Golden Visa, which is designed to attract skilled professionals and investors. These processes usually involve medical fitness testing and registration for the Emirates ID, the mandatory identification card used for virtually all public and private services.

Healthcare System  

Dubai operates a hybrid healthcare system with both public and private providers. Residents are legally required to maintain health insurance, and employers must provide at least a basic level of coverage for staff and their dependents. Expatriates not covered by an employer must secure their own insurance plan approved by the Dubai Health Authority. High-quality medical facilities are readily available, with private hospitals offering a wide range of services, though out-of-pocket costs can be significant without adequate insurance coverage. Registering for and maintaining compliant healthcare coverage should be a priority for new arrivals.

Opening a Bank Account  

A local bank account is essential for managing daily life, from receiving salary payments to paying rent and utilities. To open an account, expatriates typically must hold a valid residence visa and Emirates ID. Required documents often include a passport, residence permit, proof of address (such as a tenancy contract), and a no-objection letter from an employer for employee-sponsored accounts. The Central Bank of the UAE regulates local financial institutions, and while a wide range of international banks are present in Dubai, requirements may vary by institution. Planning sufficient time for this step is advisable, as certain processes cannot be completed until residency status is finalized.

Importing Personal Items  

Many expatriates choose to bring personal possessions when relocating. Customs regulations in Dubai are relatively straightforward, but items must be declared on arrival and may be subject to inspection. Household goods and personal effects for individuals with a residence permit are generally exempt from customs duties, provided they are used and not intended for resale. However, strict prohibitions apply to certain items, such as controlled medications, pork products, and materials deemed culturally sensitive. Advance coordination with international movers and careful review of Dubai Customs guidelines can help avoid delays and compliance issues.

In sum, moving to Dubai involves structured and interconnected steps: obtaining the appropriate visa and identification, enrolling in the healthcare system, setting up local banking, and managing the import of personal effects. Careful preparation across each of these areas ensures a smoother transition and helps new residents quickly adapt to life in one of the Middle East’s most dynamic business hubs.

The 'Boris Becker Trap': Avoiding a Sham Relocation

One of the most common pitfalls for individuals seeking to relocate to a low‑tax jurisdiction such as Dubai is underestimating the importance of truly severing ties with their home country. This issue is often referred to by practitioners as the “Boris Becker trap,” named after the German tennis star who was found by German tax authorities to have only pretended to reside abroad while in reality maintaining his life in Germany.  

At the heart of this issue is the concept of the center of vital interests—a principle applied under domestic tax laws and double tax treaties, particularly within German‑speaking jurisdictions like Germany, Austria, and Switzerland. Authorities will look beyond formalities such as a rental contract in Dubai or a resident visa. Instead, they closely assess where an individual’s personal and economic ties are strongest. Relevant factors include where one owns or maintains a home, where the family resides, the location of substantial business activity or employment, where assets are managed, and even where day-to-day social life takes place.  

If those ties remain concentrated in the home country, tax residency may be deemed to continue there, regardless of what formal paperwork might suggest. This would mean that worldwide income remains subject to tax in the home jurisdiction—precisely the outcome most expatriates sought to avoid. Worse still, tax authorities often take a critical view of arrangements that appear contrived. A “sham” relocation can result in retroactive assessments of unpaid taxes, interest on those liabilities, and potentially severe penalties. In high-profile cases, reputational damage and criminal tax investigations have followed.  

By contrast, a genuinely successful relocation to Dubai requires demonstrating that life has substantively shifted there. This often involves moving family members, closing or selling primary residences in the home country, placing significant professional and social activities in Dubai, and making it the unquestionable base of operations. Documentary evidence—such as school enrollment for children, proof of residence, local memberships, and consistent presence in the UAE—plays a crucial role if the tax authorities later challenge the move.  

In short, establishing a real center of vital interests in Dubai is not just a legal formality but a decisive factor in securing the intended tax benefits. Attempting to create a paper relocation while daily reality continues unchanged in the home country invites scrutiny and, ultimately, substantial tax exposure.

What Makes Dubai an Attractive Place to Live?

Dubai’s appeal as a place to live goes far beyond its well-publicized tax advantages. Over the past few decades, the emirate has positioned itself as a dynamic global hub, combining modern infrastructure, cultural diversity, and lifestyle amenities that attract both expatriates and long-term residents.  

One of Dubai’s most defining characteristics is its cosmopolitan culture. More than 80% of the population consists of expatriates, creating a unique environment where residents can experience a mix of global traditions, cuisines, and languages in daily life. This diversity has also fostered a reputation for openness and tolerance, with international schools, cultural festivals, and a wide range of community activities catering to different backgrounds.  

Lifestyle is another major draw. Dubai is internationally recognized for its luxury offerings—world-class shopping, fine dining, and entertainment—but beyond that, it offers a balanced lifestyle with something for everyone. Families can enjoy highly rated schools, extensive recreational facilities, and family-friendly neighborhoods, while professionals benefit from a vibrant social scene and opportunities for networking. For those who enjoy an active lifestyle, the city promotes fitness through widespread sports clubs, marinas, desert adventures, and beach activities.  

Climate and geography also shape daily life in Dubai. While summers can be extremely hot, the emirate enjoys long stretches of warm, sunny weather that make outdoor living feasible for much of the year. Beyond the urban skyline, residents can easily explore desert landscapes, natural reserves, and a scenic coastline with pristine beaches. This mix of city living and proximity to nature provides a range of leisure options in a relatively compact setting.  

Safety is another cornerstone of Dubai’s attractiveness. The city consistently ranks among the safest globally, with low crime rates and strict enforcement of laws. This sense of security is a critical factor for families and individuals seeking a stable environment, particularly when combined with the modern healthcare system and advanced emergency services.  

Finally, Dubai’s infrastructure is exceptionally well developed. World-class airports and airlines make travel convenient, while modern public transport systems, including the Metro and extensive road networks, ensure mobility within the city. High-quality healthcare facilities, expansive shopping malls, advanced telecommunications, and a steady commitment to smart-city initiatives contribute to a standard of living that rivals leading global cities.  

Taken together, these elements make Dubai more than just a tax-efficient destination—it is a thriving, secure, and engaging place to live, offering residents a lifestyle that blends cultural richness with modern convenience.  

Cost of Living

When considering relocation to Dubai, the cost of living is often one of the most decisive factors, particularly for expatriates accustomed to Western European standards. Dubai is generally perceived as more affordable in terms of taxation and personal income obligations—thanks to its tax-free salaries—but its everyday expenses vary widely depending on lifestyle choices.  

Housing is typically the largest expenditure. Rental prices in Dubai can rival or even exceed those of major Western European cities, though there is significant variation by neighborhood. For example, a one-bedroom apartment in Dubai Marina or Downtown—prime expatriate areas—often ranges from AED 7,000 to 10,000 per month (approximately €1,750–€2,500). By comparison, similar centrally located apartments in cities like Paris or Amsterdam may be between €1,500 and €2,200 monthly. More suburban areas of Dubai, such as Jumeirah Village Circle or Al Barsha, offer considerably lower rents, sometimes closer to AED 4,000–6,000 (€1,000–€1,500), a level that would be difficult to find in most European capitals.  

When it comes to food and groceries, Dubai presents a mixed picture. Dining out in mid-range restaurants is generally cheaper than in London or Zurich, with meals for two typically costing AED 200–300 (€50–€75), compared to €70–€100 in many Western European cities. Supermarket pricing is strongly influenced by the fact that much of Dubai’s produce is imported. Basic staples—such as bread, rice, and local dairy—are relatively inexpensive, but imported goods, particularly European-brand cheeses, wines, or specialty health products, can cost significantly more than in their countries of origin. On average, a family of four might spend around AED 2,500–3,500 (€620–€870) monthly on groceries, which is broadly comparable to grocery bills in Western Europe, though with higher variation for international goods.  

For services, Dubai often offers better value. Domestic help, childcare, and personal assistance—services that can be prohibitively expensive in countries like Germany or France—are comparatively affordable due to the availability of an international labor force. Hiring full-time household help might cost AED 2,000–3,000 per month (€500–€750), whereas in Western Europe, costs for similar support can easily exceed €2,000. At the same time, private healthcare and international school fees, both essential for many expatriates, can be among the highest in the world. Annual school fees in Dubai range from AED 30,000 to 100,000 (€7,500–€25,000), in line with or above private school costs in cities like London or Geneva.  

In sum, Dubai’s cost of living can feel comparable to or slightly higher than major Western European capitals, especially once rent and education are factored in. However, the competitive pricing of services and the absence of personal income tax mean that many expatriates find their disposable income further stretched in Dubai than it would be in Europe, provided they make prudent housing and lifestyle choices.  

Tax Aspects of Leaving Your Home Country (e.g., Germany, Switzerland, Austria)

When moving from high-tax jurisdictions such as Germany, Switzerland, or Austria to a low-tax environment like Dubai, it is not enough to simply relocate physically. One must carefully manage the tax consequences of exiting the home country, since several provisions can create residual tax exposure even after departure.  

In Germany, the most prominent hurdle is the exit tax regime (Wegzugsbesteuerung). This provision targets individuals who hold a substantial participation in companies, generally defined as owning at least 1% of the shares in a corporation within the last five years. Upon giving up German tax residency, these individuals are deemed to have sold their shares at fair market value, triggering capital gains taxation—even if no actual sale takes place. Recent legislative changes have tightened rules around deferral and installment options, meaning entrepreneurs and investors must prepare for a potentially significant liquidity burden. Special relief may apply if the move is within the EU/EEA, but relocating to Dubai falls outside these benefits, making planning essential.  

Beyond the exit tax, individuals leaving Germany may continue to face limited tax liability (beschränkte Steuerpflicht). This applies to certain categories of domestic income, such as rental income from German real estate, income from German business operations, or specific types of capital income sourced in Germany. Even if one becomes a tax resident of Dubai, Germany retains taxing rights over such income under domestic law and, where relevant, double taxation agreements.  

Austria and Switzerland have similar concepts. In Austria, exit taxation rules also apply to substantial shareholdings, though deferrals may be available under EU law. Switzerland does not impose an exit tax in the same way, but taxpayers must be mindful of ongoing limited liability on Swiss‑sourced income, as well as wealth tax assessments up to the date of emigration.  

Ultimately, leaving one’s home country for Dubai should not be approached as a clean break without obligations. Entrepreneurs, investors, and property owners in particular must anticipate how exit taxation and ongoing limited tax liability can continue to connect them to their former jurisdiction. Strategic pre-departure planning—ranging from restructuring shareholdings to timing the emigration—can help mitigate costly surprises and ensure compliance with both the home state’s and Dubai’s requirements.  

Correct Preparation for the Move

Before relocating to Dubai, careful planning is essential to ensure that both the administrative and tax-related aspects of the move are properly managed. Unlike simply booking a flight, moving abroad requires a clear roadmap of preparatory steps that minimize legal, financial, and logistical risks. The following checklist highlights the critical actions individuals should take before departure.  

Checklist for Preparing Your Move to Dubai  

1. Clarify Visa and Residency Requirements 

• Research which type of visa is most suitable—employment visa, investor visa, freelance visa, or family sponsorship.  

• Confirm the eligibility criteria, documentation required (e.g., passport validity, employment contract, proof of investment), and expected processing times.  

• If moving under employment sponsorship, ensure your employer takes care of the visa application and provides clear guidance.  

2. De-Register From Home Country Obligations  

• Notify tax authorities in your home country of your departure; some jurisdictions require official de-registration to establish non-resident tax status.  

• Close or update social security, health insurance, or pension contributions, depending on the rules in your country of origin.  

• Cancel local registrations such as municipal or population registers, if applicable, to prevent ongoing liability for local taxes or insurance.  

3. Understand Tax Residency Implications  

• Investigate how your home country determines tax residency and what criteria may continue to tie you to its tax system (e.g., maintaining a home, spouse or dependents, or extended stays).  

• Review any applicable double taxation agreements between your home country and the United Arab Emirates to understand how income will be treated.  

4. Review Financial and Banking Arrangements  

• Inform your bank of your move to avoid account freezes caused by suspected unusual activity abroad.  

• Explore whether you will need a local bank account in Dubai for salary deposits and day-to-day expenses.  

• Check if your home-country credit cards and insurance will continue to function internationally and whether fees or limitations will apply.  

5. Health and Medical Preparation  

• Ensure continuity of medical coverage by researching Dubai’s mandatory health insurance regulations, which require all residents to have compliant policies.  

• Obtain medical records and prescriptions before departure for easier integration into the local healthcare system.  

6. Housing and Practical Logistics  

• Research housing options in Dubai, including rental contract procedures and security deposit requirements.  

• Understand tenancy laws and landlord–tenant protections before entering into agreements.  

7. Education and Family Considerations  

• If relocating with children, review international schools in Dubai and apply early, as spaces can be competitive.  

• Prepare documentation such as academic transcripts, vaccination records, and guardianship papers where relevant.  

8. Professional and Business Preparations  

• If planning to establish a business, review the licensing structure (mainland vs. free zone) and assess corporate tax obligations under the UAE’s recently introduced corporate tax regime.  

• Align business plans with residency status, as company ownership may affect visa sponsorship.  

9. Practical Transition Matters  

• Redirect mail and cancel subscriptions in your home country.  

• Assess whether to ship household goods or purchase anew in Dubai, considering the cost and import procedures.  

• Confirm on-the-ground arrival requirements, such as Emirates ID registration, medical checks, and biometric procedures, which must be completed soon after arrival.  

Preparing correctly for the move to Dubai is not only about securing a visa but also about responsibly disentangling from tax and administrative ties at home while integrating smoothly into the framework of your new residence. Addressing these matters systematically significantly reduces the risk of double taxation, unintended liabilities, or regulatory complications during and after the transition.  

Automatic Information Exchange (CRS)

Dubai, as part of the United Arab Emirates (UAE), participates in the OECD’s Common Reporting Standard (CRS) framework. The UAE formally committed to the CRS in 2015 and began its first exchanges of financial account information in 2018. This means that financial institutions in Dubai—including banks, custodians, certain investment entities, and some insurance companies—are required to gather and report information on accounts held by non-resident individuals and entities. That information is then shared automatically with the tax authorities in the account holder’s country of tax residence, provided that jurisdiction has a reciprocal exchange agreement with the UAE.  

For foreign individuals considering Dubai as a financial hub, this has important implications. Opening a bank account in Dubai no longer guarantees confidentiality from one’s home tax authority. If the individual is tax resident in a country that is a CRS participant, details such as account balances, interest, dividends, and other relevant financial information will be reported annually to that jurisdiction. While Dubai does not itself levy personal income tax, foreign account holders remain subject to their home country’s tax compliance obligations, and CRS data helps foreign tax authorities enforce those rules.  

In practice, this means that using a Dubai bank account as a way to shield assets from disclosure is no longer feasible for most international investors or expatriates. Tax planning involving Dubai must therefore be structured around transparency and compliance, leveraging the jurisdiction’s tax-free environment within the boundaries of international reporting standards rather than attempting to avoid them. This shift underscores the importance of professional tax advice for individuals holding offshore assets, ensuring that any financial presence in Dubai is aligned with both local regulations and global reporting obligations.