A company is considered to be tax resident in Dubai (United Arab Emirates) if it is incorporated in the United Arab Emirates and provided that it can establish that:
- all the shares of the company are beneficially owned by residents of the United Arab Emirates; and
- all or substantially all of the company's income is derived from the active conduct of a trade or business, other than an investment business, in the United Arab Emirates.
However, United Arab Emirates offer several free trade zones where foreign shareholding of companies is permitted. The most popular free trade zone is in Dubai, the Dubai International Financial Centre ("DIFC"). Our analysis below covers only taxation of DIFC companies.