This year, the UAE is expected to attract the most billionaires in the globe, surpassing major countries such as Australia, Singapore, Israel, Switzerland, the United States, Canada, New Zealand, the United Kingdom, and others. According to the most recent Henley Global Citizens Report, 4,000 millionaires will relocate to the UAE by 2022.
Russia, China, India, Hong Kong, Ukraine, Brazil, the United Kingdom, Mexico, Saudi Arabia, and Indonesia are among the ten nations expected to have the greatest net outflows of HNWIs.
According to the survey, at least 8,000 superrich Indians will leave India this year, with Dubai and Singapore being their top two favoured destinations. India does not enable dual passports, and most HNWIs prefer resident permits or multiple entry and long-term visas over full citizenship.
At a time when India has emerged as the world’s third largest startup ecosystem after the US and China, several of India’s tech entrepreneurs have been emigrating to the UAE using the country’s golden visa programme, drawn by the ease of setting up business, complete waiver on personal income tax, and a friendlier policy environment. Indians make up more than 30% of Dubai’s startup ecosystem, and the city hopes to recruit even more Indian digital expertise.
It is offering 100,000 “golden visas,” which allow entrepreneurs and technology investors to stay in the country for up to ten years, which is longer than regular visas, and has even established a national small-business programme to assist startups in finding funding, partnering with established companies, and marketing their products overseas.
What exactly is this golden visa?
The golden visa, which is valid for five or ten years, is effectively a long-term residency permit in the UAE. The visa permits foreigners to live, work, and study in the UAE without the need for a national sponsor and with complete control of their firm. Golden Residence for new entrepreneurs and investors
Entrepreneurs/investors can now obtain a 10-year resident visa in the UAE by investing in a start-up. However, the startup must be registered in the UAE as a small and medium firm (SME) and have an annual turnover of at least AED 1 million (about.
Also, founders or co-founders of any start-up can apply for a Golden Residence visa if their firm has been sold for AED 7 million or more. Not just Dubai, but also Abu Dhabi, is eager to house more Indian start-ups.
In addition to Dubai, the Emirate of Abu Dhabi wants to house additional Indian businesses in its ‘Hub71’ ecosystem. But what is the most significant benefit of relocating to Dubai?
To begin, taxes are lower in Dubai for both launching and running a firm. Residential real estate leases are taxed at a set rate of 5%, while commercial real estate leases are taxed at a fixed rate of 10%. Despite the fact that landlords must pay licence fees, there is no capital gains tax in Dubai.
One of the primary reasons that Indian startup founders migrate to Dubai is because the taxes that a startup may face when establishing a firm are significantly lower in comparison to India, particularly in Dubai. Another huge draw is that there is no personal tax.
Individuals in Dubai are not taxed on their earnings from work, real estate, equity investments, or other sources of personal income unrelated to a UAE trade or enterprise. Businesses are also excluded from paying capital gains and income taxes on shareholdings.
However, beginning in June 2023, the United Arab Emirates will levy a federal corporation tax on business earnings for the first time. To “help small enterprises and startups,” the country’s statutory tax rate will be 9% for taxable income over 375,000 UAE dirhams ($102,000), and nil for taxable income up to that level.
According to Nikhil Varma, Managing Partner of Miglani Varma & Co – Advocates, Solicitors, and Consultants, what makes it even more appealing for technologists is the UAE’s almost benevolent tax structure, which provides for a complete exemption from personal income tax and a minimum capital gains tax, in stark contrast to India’s onerous direct (and indirect) tax regime.