A Case Study: Relocating to Dubai as a UK-based HNW Entrepreneur

While it can be difficult to say goodbye to your home country, it isn’t hard to see why so many people are considering relocating to Dubai, especially HNW entrepreneurs and their families. The sheer amount of opportunities the city holds, from innovative investment to seamless business set up, beautiful homes to excellent schools and an unrivalled quality of life that is safe, diverse and brightened by year-round sunshine.

But no matter your motivations, relocation is a serious undertaking and it is important to have as much information at your disposal as possible so you can make informed choices that best suit your circumstances and will protect you, your family and your assets long-term.

To help answer some of those questions, Daniel Dronsfield sat down with David Bell from PCD to discuss key considerations for UK-based entrepreneurs and HNWIs who are looking to relocate to Dubai. They are joined by Sean Bannister from the law firm Edwin Co in London and take you through a variety of elements including UK residency status and capital gains tax on share sales, tax on UK rental income, UAE immigration pathways, family sponsorship, business set up, finding a home and even the importance of mapping out the school run! This is a must-watch for any UK-based entrepreneurs who are interested in the opportunities on offer in Dubai and the UAE.

Relocating to Dubai Case Study Profile: A UK entrepreneur interested in moving to Dubai with his wife and children

Here are the key details:

• UK entrepreneur (45) and wife (42)
• Two children aged 15 and 13
• Plan to relocate for the start of the school year in September or January
• Jointly own shares in UK fashion company
  • £50m turnover
  • Ian is director but Angela no longer involved
  • Experienced management team in UK
• Ian seeks new venture in UAE
• £5m family home in London
• £2m buy to let in Manchester
• Extended family in UK

Here are some key takeaways:

Residency status and tax implications

• Multiple tests taken in order to establish residence or non-residence on an automatic basis. A new role in the UAE would automatically give him non-residence status and he could spend up to 90 days in the UK (30 of which he could work) without triggering any residency issues
• If automatic test not suitable, a sufficient ties test must be done
• This will completely determine any tax implications
• Tracking is essential
• No tax charge on UK dividend tax as a UAE resident if
  • Being able to claim disregarded income treatment
  • Not being within the temporary non-residence provisions
• No capital gains unless deriving 75% or more of value from UK land and property

UAE immigration routes

• A popular choice is the Golden Visa
  • Fixed deposit – AED 2 million in a local bank account that must remain for at least 2 years
  • Property investment – purchase a property worth at least AED 2 million
  • Both give you a 10 year residency visa
• Golden Visa allows for family sponsorship and beyond the traditional cap of 18 years of age for male children
• Sponsorship of dependents requires significant paperwork and attestation, so planning is essential

Schooling

• People can arrive all year round, though ideally planning for a September start would give your children a full school year
• Places can be hard to come by and mid-year can be an option, especially for preferred schools

Corporate activity

• Vast jurisdiction options within Dubai and the UAE – around 50 to 60
• Freezone, mainland and financial zones like DIFC and ADGM
• Need to determine business goals to identify best jurisdiction – ie retail, trade, e-commerce etc
• Need to be aware of tax position of new entity including UAE corporate tax (9%) and which business activities would be non-qualifying

Maintenance

• EER Middle East can assist with banking, governance, registration and annual renewals. Also essential compliance elements and local regulations like WPS that need to be adhered to in order to avoid blocks, penalties or fines. The processes evolve regularly, so it is important to be kept up to date on what is required so you can successfully maintain the entity and deal with all relevant authorities

Home search

• Finding the right property is key to ensuring the relocation goes well
• Location and community will impact lifestyle and happiness, so it is important to get to know which area is the right fit and cover aspects like amenities, utilities and even how easy the school run is, so things are easier on a day-to-day basis

Ultimately any UK-based entrepreneurs or HNWIs who are thinking of relocating to Dubai need to ensure they have a trusted partner to assist them at every stage. If you have questions about relocating to Dubai and want to find out more about our relocation, immigration and corporate services, please reach out to our expert team today on info@eerme.com or +971 4 421 1819.