Is dubai tax-free for companies?

The United Arab Emirates currently does not have a federal corporate tax regime. However, corporate tax exists at the level of each emirate. Each emirate establishes them through tax decrees, but in practice they are only imposed on foreign oil and gas companies or branches of foreign banks. Most companies in the United Arab Emirates do not pay corporate taxes.

In theory, most Emirates can impose a corporate tax of up to 55%, but this only applies to foreign oil companies and branches of foreign banks. Residential tenants in Dubai pay 5% of their annual rent as rent tax, while 10% is added to commercial tenants. Ultimately, the move puts the United Arab Emirates in line with other competitive economies, said Taufiq Rahim, a non-resident researcher at the Mohammed bin Rashid School of Government in Dubai. In Dubai, residential tenants pay 5% of their annual rent as rent tax, while 10% is added to commercial tenants.

And corporate tax already exists in the GCC, in Saudi Arabia and Qatar, for example, Chris Payne, chief economist at Dubai-based Peninsula Real Estate, told CNBC.