United Arab Emirates

Many international residents in the UAE assume that by being resident in the country, they also automatically have tax residency. It’s a common mistake. A residence visa allows you to live and work here, but that doesn’t mean you meet the criteria for tax residency under UAE law or international standards. This mix-up can create problems, especially for those with links to more than one country. Cases of double taxation, treaty denial and reclassification are becoming more frequent. Since 2023, the UAE has applied formal rules to define tax residency. This article looks at what those rules are and how to make sure your status holds up if challenged. Immigration status does not define tax residency Holding a residence visa means you can live in the UAE, open a bank account, apply for utilities, sponsor family and, if your licence allows it, work. It doesn’t confirm where you’re tax resident. That’s a separate issue, dealt with through a different process. Immigration status is administrative. It doesn’t prove where you’re based for tax purposes unless you meet the criteria and can show it. This matters if you’re relying on the UAE as your main country of residence under a tax treaty, or trying to show authorities elsewhere that you’ve shifted your tax base. Without clear evidence, that claim may not stand. What makes someone a UAE tax resident There are three ways to qualify, each with its own threshold and supporting evidence. You only need to meet one. The first is based on where your main ties are. If your work, family, property, income or spending is mainly in the UAE, you can apply on this basis. The tax authority looks at where you normally live, where you earn and spend, and what keeps you tied to that place. You’ll need to show consistent UAE-based activity across things like housing, employment, licensing, schooling, banking and regular movement. This could mean a 12-month Ejari contract in your name, a Dubai salary credited monthly into a local bank account, school fees paid in AED and regular VAT filings under a UAE trade licence. The second route is simple: 183 days in the UAE over a 12-month stretch. Days don’t need to be consecutive. Part days count. If your passport shows enough time in the country and your supporting records back that up, you qualify. This is the most straightforward option but only works if you’re genuinely present long enough. The third option applies to UAE or GCC nationals, residents or UAE passport holders. If you’ve spent 90 days in the country during the past 12 months and have strong links such as a permanent home, employer or owned business in the UAE, you may qualify. You’ll need clear documentation that proves both time and ties. In all cases, it’s about the whole picture. One-off visits, on-paper addresses or irregular presence don’t pass the test. The FTA wants to see where your life actually happens. And if it’s split between countries, they’ll look at which part carries more weight. How to prove tax residency in the UAE To prove tax residency, you’ll need a Tax Residency Certificate from the Federal Tax Authority. For example, a Dubai-based freelancer who bills international clients might need the certificate to avoid 30% withholding tax in their client’s home country. This is what foreign tax authorities recognise when assessing treaty claims or deciding if another country can tax your income. To apply, you’ll need to show at least 183 days of presence in the UAE within the last 12 months, backed by passport entry and exit stamps. You must also provide a copy of your Emirates ID, UAE residence visa, tenancy contract, bank statements showing local activity, and a salary certificate or trade licence, depending on whether you’re employed or self-employed. The application is submitted through the FTA’s online portal. The current fee is AED 1,000 for individuals, plus AED 3,000 for the certificate itself. Without a TRC, your home country may ignore your UAE status entirely. The certificate is often the deciding factor in whether you’re treated as tax resident in the eyes of other governments. Tax residency conflicts and how they’re resolved Claiming tax residency in the UAE doesn’t stop another country from doing the same. If your home country sees enough ongoing ties, it may still treat you as tax resident and try to tax your global income. That’s when conflicts arise. The OECD tie-breaker rules apply when two countries both assert tax residency. They follow a set order. First, where’s your permanent home? If there’s more than one, which country are your personal and economic ties closer to? If that’s still unclear, they look at where you usually live, then your nationality. If none of these settle the matter, the two tax authorities are expected to reach a mutual agreement. This becomes a problem when someone holds a UAE tax certificate, but their family lives abroad, they own property back home, or they’re still active in a business based there. Even if they spend most of the year in the UAE, foreign tax authorities may argue those ties carry more weight than time spent. The result can be a treaty denial or competing tax claims. In practice, the burden of proof tends to fall on the taxpayer. Ties, presence and proof Time on the ground in the UAE helps, but it doesn’t settle the matter. Tax residency depends on where your life is based in practice, not just on paper. Without clear ties and consistent records, a visa won’t carry much weight. This matters most for people with property, business activity or family elsewhere, where conflicting claims can arise. Anyone relying on UAE tax residency should keep clear records of their presence and maintain evidence of local ties. If your bank account is dormant, your lease ends mid-year, or you’re frequently abroad, it could weaken your case. Key indicators the FTA and foreign tax authorities may look at include: Ejari or title deed in your name covering the full 12 months Local salary or revenue credited monthly into a UAE account Active bank account showing regular transactions in AED Consistent physical presence (at least 90 or 183 days, depending on your status) Dependents and schooling based in the UAE Minimal ongoing ties abroad, such as property, directorships or family based elsewhere A proactive review now can help prevent complications with foreign tax authorities later. What matters is consistency, which means time, ties and records that all point in the same direction. When the facts are clear and well documented, residency is much easier to support.

Dubai, UAE | 22 July 2025 MB secures EUR 1 million victory for PGM Technologies in DIFC cross-border dispute We are delighted to announce that Matouk Bassiouny’s (“MB”) International Dispute Resolution team successfully obtained a favourable judgment for PGM Technologies in a cross-border breach of contract case before the Dubai International Financial Centre (“DIFC”) Courts. The dispute arose from a breach of contractual obligations, payment defaults, and the enforcement of agreed terms. The DIFC Court awarded our client full recovery of EUR 1,000,000, together with contractual interest at 5% per annum from the date of breach, post-judgment interest at the same rate until payment, and costs totalling USD 100,752.28. The team advising on this case was led by Ahmed Tony (Partner), supported by Youssef Nassar (Senior Associate) and Alia Elraey (Associate). Led by Founding Partner and Group Head of Dispute Resolution, F. John Matouk, our International Dispute Resolution team brings extensive experience in representing clients before the ADGM and DIFC Courts in the UAE. Our team is common law qualified, with F. John Matouk admitted in New York, Ahmed Tony in England and Wales, Youssef Nassar in New York, and Alia Elraey in England and Wales. As part of our commitment to providing comprehensive legal services, we collaborate with specialist barristers to ensure our clients receive the highest quality representation throughout the litigation process.         For more about Matouk Bassiouny, check out our website at https://matoukbassiouny.com/.

Saudi Arabia’s push to diversify its economy has put serious weight behind sectors with long-term global value. Technology, including software development, cloud services and digital infrastructure, is one of the main targets. Backed by state funding, legal reform and large-scale national projects, the Kingdom is opening up to international tech companies in a way it never has before. If you’re looking to enter the market, this article sets out how to establish a software or tech development company in Saudi Arabia, what the process involves and what to get right early on. What counts as a tech company in Saudi Arabia The tech sector in Saudi includes a broad mix of digital and software-based businesses, including: Custom software and mobile app development SaaS platforms and digital marketplaces Cloud infrastructure and data services Cybersecurity providers AI, analytics and IoT-focused solutions   These are typically licensed under activity categories such as “computer programming,” “IT consultancy,” or “information technology services.” The key point is that if your business involves building, supporting or securing software or digital systems, it will fall under one of these regulated activities. Licensing and company setup Setting up a tech company as a foreign investor starts with the Ministry of Investment (MISA). This is where you apply for a foreign investment licence. Most software and IT-related businesses fall under “computer programming” or “IT consultancy” activities. Once granted, this licence allows full foreign ownership and is the entry point to company formation. Next comes commercial registration with the Ministry of Commerce which includes reserving your company name and issuing the national commercial registration (CR). Your MISA licence and CR are linked, so you’ll need to complete both in sequence. If your business is expected to generate more than SAR 375,000 in annual revenue, you must register with ZATCA for VAT. You’ll also need to apply for a municipality licence in the city where you’ll be operating. To legally employ staff, you’ll need to open files with GOSI (for social insurance) and set up your company in the Nitaqat system, which tracks Saudisation compliance. These steps are mandatory even if you’re starting with a small team. Most foreign-owned companies begin with a declared capital of SAR 500,000, unless a specific activity or authority requires more. Some sectors carry higher capital rules, but for general software, tech development or IT services, this amount is typically accepted. While the process involves several authorities, it’s now more coordinated than before and most filings can be handled through legal or corporate service providers. Getting operational: office, hiring and compliance Once your licence is issued, you’ll need a physical office lease to complete setup. Virtual offices aren’t accepted for tech businesses, and the lease must be in place before you apply for the municipality licence. Commercial registration triggers the need for Chamber of Commerce membership, which is handled at the same stage. If you plan to hire, register with GOSI before onboarding staff. Saudization also applies from the start. Minimum Saudi hiring targets depend on your company size, but even one-person operations are expected to comply under the Nitaqat system. Hosting, IP and compliance There are a few regulatory details to pin down once your business is operational. If you handle user data, especially in sectors like finance or government, check whether data needs to be hosted locally. This comes under CST rules and applies more tightly to certified cloud providers. Software IP can be registered with the Saudi Authority for Intellectual Property. It’s not mandatory, but worth doing if you’ve built proprietary code or platforms. There’s no blanket rule requiring Arabic language support unless your clients include government agencies. That said, localisation matters. Saudi users expect interfaces and content that reflect regional usage, even if the product is built on global architecture. Planning for this from the start, along with the right setup and compliance structure, will save time, reduce risk and keep your business running without interruption. After setup: banking, admin and local hurdles Once your company is fully registered, you’ll need to open a corporate bank account. This can take time, especially for foreign-owned businesses. Banks will ask for the full set of company documents in Arabic, along with details on ownership and signing authority. Processing can take a few weeks, so plan accordingly. You’ll also need to stay on top of licence renewals and ZATCA reporting if registered for VAT. Some of this is automated, but errors in translation or document formatting still cause delays. The municipality stage is another common bottleneck, especially if your office lease isn’t properly registered or linked. Delays in Arabic documentation, last-minute approval requests, or unclear KYC steps can all slow things down if not planned for. Planning for this from the outset, including the right setup and compliance structure, will save time, reduce risk and help you stay operational without disruption. How can The Knightsbridge Group help? With over a decade of experience supporting international clients across the Gulf, we help businesses enter and operate in Saudi Arabia with confidence. We work closely with Saudi regulators to ensure each setup is structured correctly from the start. Our team handles the full process, from MISA licensing and commercial registration to Saudisation planning, tax setup, office leasing and visa support. We also advise software, cloud and tech-driven companies on how to meet local data, IP and compliance requirements without overcomplicating operations. If you would like expert assistance with launching a tech company in Saudi Arabia, or help with any other structuring or licensing matter, contact us at [email protected].

Introduction: In the UAE, it is legally permissible for banks to close a customer’s account if multiple checks are returned due to insufficient funds. All the banks and financial institutions in the UAE are regulated by the Central Bank of the UAE. The central bank of the UAE issued a circular for the UAE Central Bank’s Consumer Protection Regulation (circular no. 8/2020) for all the banks in the UAE. According to this circular, the banks are obligated to inform customers in writing about the consequences of returned cheques. It stipulates the responsibility of all the banks to inform customers in writing about the consequences of returned cheques. These consequences include applicable fees, potential closure of the current account, and negative reporting to the Al Etihad Credit Bureau. Furthermore, the central bank has stipulated that a customer's account may be cancelled for two years if four cheques are returned within a year due to insufficient funds. If this happens again, the cancellation period is extended to three years, and any unused cheques must be recovered. In the event that if customer's account has been cancelled by the bank due to bounced cheques, the bank will be reported to the Al Etihad Credit Bureau. The customer's credit score might decline as a result of this report. Moreover, this poor credit score could make it more difficult for them to get cheque books or open new accounts from other banks. According to central bank regulations, all financial institutions must investigate creditworthiness before providing such services. What are the suggested courses of action? If anyone has concerns that their bank account would be closed as a result of bounced cheques, they should first review the terms and conditions of their bank regarding cheque returns. Further individual can contact their bank’s customer service or relationship manager to understand specific policies. It is important to ensure sufficient funds are maintained in their account to cover issued cheques. Conclusion: It is possible for the customers to take preventative steps, and it will assist in protecting the individual's credibility and maintaining a favourable standing with the bank. Author: Dr. Hassan Elhais