UAE – A Destination for Digital Nomads

                                                                                             LISTEN TO THIS ARTICLE

We live in interesting times, where working remotely is gaining recognition amongst employers and employees. Despite the never-ending debate on the pros and cons of remote working, there is a continuous increase in the number of people who wish to work remotely while pursuing other interests.  

Like Spain and Japan, the UAE also offers special visas and multiple benefits to individuals working remotely in the UAE. Let’s understand the details.  

Virtual Work Residence Visa 

Foreigners employed outside the UAE are permitted to live in the UAE legitimately with a virtual work visa. This visa is valid for 1 year. It allows them to enter the UAE under self-sponsorship and work in the UAE, subject to the conditions specified in the visa. 

To procure this visa, an individual must provide proof that: (i) he/she works remotely for an organisation outside the UAE, and (ii) receives a monthly income of USD 3,500. 

Virtual Working Programme 

Under the virtual working programme, an individual may relocate to the UAE (from outside the UAE) and continue to work for an existing organisation that he is already working for, remotely. He/she may relocate to the UAE with family.  

The virtual working programme is suitable for people who live and work outside the UAE as well as for entrepreneurs and start-up companies who meet the eligibility criteria. 

This programme is also valid for 1 year and can be renewed.   

In order to apply for the programme, an individual must (i) have a passport with a validity of minimum 6 months, (ii) health insurance, (iii) proof of employment, minimum monthly salary of USD 5,000 etc. for individuals in employment and (iv) proof of ownership of .the company for at least a year, average monthly income of USD 5,000 etc. for individuals having their own business setup.  

Benefits  

Individuals with such visas are considered as residents in the UAE. Thus, they benefit immensely from UAE’s policy of no personal income tax on individuals. This leads to substantial saving on tax outgo as compared to their home countries where the effective tax rates may be as high as 30% to 40%.  

Besides, an individual having these visas can procure all utilities and services for self and family. This includes accommodation, access to basic utilities and advanced digital infrastructure, medical and schooling.  

The UAE is one of the most developed countries in the world as well as a meting point of people from different cultures. Such work visas allow individuals to explore the country, its culture as well as provide immense networking and personal growth opportunities.  

Considerations for the Employer 

The UAE has recently introduced corporate tax on at 9% on domestic companies and foreign companies having a permanent establishment (PE) in the UAE. When employees work remotely in the UAE, it is extremely important for foreign companies to evaluate the PE exposure in the UAE. Any income attributable to the UAE PE (as a result of the employee working remotely in the UAE) may be subject to corporate tax in the UAE.  

Conclusion 

The UAE's innovative approach to remote work through its Virtual Work Residence Visa and Virtual Working Programme offers digital nomads an unparalleled opportunity for both professional and personal development. With its tax benefits, diverse culture, and world-class infrastructure, the UAE stands as a beacon for those seeking a dynamic and enriching remote working experience. However, both individuals and employers must navigate the complexities of tax regulations to ensure a seamless transition. 

Disclaimer: Content posted is for informational and knowledge sharing purposes only, and is not intended to be a substitute for professional advice related to tax, finance or accounting. The view/interpretation of the publisher is based on the available Law, guidelines and information. Each reader should take due professional care before you act after reading the contents of that article/post. No warranty whatsoever is made that any of the articles are accurate and is not intended to provide, and should not be relied on for tax or accounting advice.