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Dubai / Dubai Taxes Private Individual

Withholding Tax in Dubai

Capital Gains Tax in the United Arab Emirates

This advantageous regulation benefits both natural persons residing in the UAE and companies based there.

Furthermore, the United Arab Emirates maintains a strong and continuously expanding network of Double Taxation Agreements (DTAs) with other states. In terms of withholding tax, these DTAs often result in favourable taxation or even zero taxation.

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Withholding Tax in Practice

The United Arab Emirates (UAE) are considered a tax-free country and indeed, no withholding tax is levied either in Dubai or any of the other Emirates of the UAE.

Withholding Tax in Practice

Let’s assume you live in Germany and invest in a stock of a company based in the USA and receive a dividend. In this case, the source state, the USA, would withhold a withholding tax on the dividend, known as capital gains tax.

Each source state, such as the USA in the example above, sets its own withholding tax rate. The following examples thus provide a simplified overview of which capital gains tax is applied in which country for foreign investors:

If you live in Dubai and receive dividends from your company in the United Arab Emirates, withholding tax is not relevant for you.
If you live in Germany and receive dividends from your company in Dubai, the UAE imposes no withholding tax.
If you live in Cyprus and receive dividends from your company in Dubai, the United Arab Emirates imposes no withholding tax.
If you live in Dubai and receive a dividend from the UK.

And the same applies to income from interest and royalties. Wherever the source is, that’s the applicable withholding tax rate.

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Aspect	Dubai Freezone Company*
Jurisdiction	The free trade zones are independent economic zones with their own administration. Each zone has its own procedures for formation, licensing and supervision.
Ownership	100% foreign ownership is possible. A local sponsor is not required.
Scope of activities	The freezone is ideal for internationally active companies that operate outside the United Arab Emirates or maintain business relationships with other freezones. Direct trade on the local market is generally not provided for, but can be enabled through supplementary models (e.g. distribution partners or additional license).
License / Business purpose	Each freezone offers industry-specific licenses, e.g. for trade, services, technology or production. The granting is done directly by the respective freezone authority.
Office / Establishment	Each freezone company requires an establishment – e.g. Flex-Office, Shared Desk or an own office. We offer Full-Service packages that already contain a complete solution and enable immediate operational readiness.
Visa / Employees	Entrepreneurs and employees can obtain Residency visas. The number depends on license and office size.
Corporate tax (Corporate Tax)	Profits up to AED 375,000 per year remain tax-free. Only the profit exceeding this is taxed at 9%. Companies in a freezone that meet the legal requirements can continue to apply the tax rate of 0% on qualifying income. Small businesses with an annual turnover of up to AED 3,000,000 are completely exempt from corporate tax until the end of 2026.
Profit transfer / Withholding tax	Profits and capital can be transferred abroad without restriction. No withholding tax is levied.
Costs	Formation and ongoing costs are usually cheaper and clearly calculable. After individual consultation, we determine the optimal location and, upon request, submit a tailor-made offer that includes all services.
Conclusion	A Freezone company in Dubai is the ideal structure for entrepreneurs who are internationally active or want to conduct business with partners worldwide from Dubai. It offers full ownership rights, tax advantages and a modern, business-friendly environment.

Aspect	Dubai Mainland Company*
Jurisdiction	The mainland is subject to the state authority Department of Economy & Tourism (formerly DET) and other onshore authorities. These control all economic activities within the UAE.
Ownership	In many cases, 100% foreign ownership is also possible. In individual, regulated areas, special approvals may be required.
Scope of activities	Mainland companies may conduct business without restriction within the entire UAE. They are therefore the right choice for companies that want to be locally present and offer their products or services directly on site.
License / Business purpose	Licenses are granted centrally by the state onshore authorities. The procedures are more extensive and often subject to additional requirements.
Office / Establishment	On the mainland, a fixed business location is mandatory. As a rule, stricter area requirements and rental obligations apply here.
Visa / Employees	Mainland companies can also apply for visas for owners and employees.
Corporate tax (Corporate Tax)	For mainland companies, the same principle applies: profits up to AED 375,000 remain tax-free, above that the rate of 9% applies. This regulation ensures moderate tax burden and high planning security.
Profit transfer / Withholding tax	Mainland companies can also transfer profits freely. No withholding tax is levied either.
Costs	Formation is more complex and generally more cost-intensive. State fees, rental costs and administrative requirements are higher.
Conclusion	A Mainland company is suitable for entrepreneurs who want to be locally business active in the UAE – for example in trade, gastronomy or services for customers within the emirates.

Withholding Tax in Dubai

Capital Gains Tax in the United Arab Emirates

Withholding Tax in Practice

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