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The challenges of becoming a ‘global citizen’: could the UAE be the answer?

Global political and economic instability, as well as tighter jurisdictional regulations, present several challenges and barriers for high-net-worth individuals (HNWIs) seeking to live, invest and operate legally and safely around the world.

Offering a stable economy, a favourable tax environment, unrivalled lifestyle, and secure haven, it’s easy to see why the UAE’s open world approach is attracting many wealthy individuals looking to grasp the global citizen dream.

Here, we look at the challenges HNWIs need to consider, and why the UAE can offer the freedom and opportunity to become a truly global citizen.

Residency and Citizenship

A fundamental need for many HNWIs is to secure the right to live, travel and do business freely on a worldwide scale without the constraints of boundaries and borders. One of the best ways to gain global freedom is to obtain a coveted Golden Visa.

A Golden Visa is a ‘long-term’ residency visa, providing many exclusive lifestyle and business opportunities. Holders and their families can benefit from a secure and alternative haven, and the highest standard of living, with access to world-class infrastructures, healthcare systems and education facilities.

The UAE Residence by Investment Golden Visa offers investors and entrepreneurs one of the quickest and easiest ways to obtain long-term residency in the Emirates. Recent changes to eligibility rules have increased the benefits for HNWIs and their families, making Dubai one of the most desirable locations in the world to settle.

Benefits of the UAE Golden Visa include:

    • • No sponsorship required to obtain the 10-year renewable visa

 

    • • Residency extended to spouse and children, regardless of their age

 

    • • Residency also extended to key domestic staff with no limit on numbers

 

    • No restrictions on the duration of stay in other countries

For the first time, the UAE is also granting citizenship in exceptional cases to wealthy individuals of ‘special merit’, including investors. Eligibility for citizenship is also extended to a UAE passport holder’s spouse and minor children. Under the new rule, in most cases, citizens can obtain dual citizenship without having to give up the existing passport of their native country.

A UAE passport allows visa-free entry to 175 countries, including EU Schengen states, the UK, China and Canada.

In an ever-changing, politically volatile world, a second passport can offer a lifeline and insurance for individuals and their families, providing a haven in a safe and beautiful country they can call home.

Taxes

The complexities of multi-jurisdictional taxes and obligations have always been a pain point for global citizens. In recent years, the Organisation for Economic Co-operation and Development (OECD) has introduced several measures to address globalisation and subsequent tax issues. In a bid to comply with international tax standards, participating countries are implementing measures to reduce harmful tax practices and improve tax transparency – benefitting both the domestic and global economy.

For global individuals and enterprises with international footprints, the need to be compliant and transparent with regard to tax liabilities and obligations has never been greater.

The challenge for HNWIs is to seek out jurisdictions compliant with OECD international tax standards, while offering a legal and favourable tax regime. One such country is the UAE.

The benefits of the UAE tax system for global citizens include:

    • • Exemption from income tax and inheritance tax

 

    • • The 9% corporate tax, due to come into effect from 2023, is one of the lowest in the world

 

    • • The UAE has double tax treaties with 139 countries, providing relief from certain tax compliance obligations and foreign taxation in other jurisdictions

 

    • High revenue corporations that pay foreign taxes can offset them against the new UAE corporate tax, avoiding the risk of double taxation

Global banking and investment

With different assets in different jurisdictions, it’s imperative that global citizens can seamlessly manage their banking needs across borders. Thanks to the rise of digital banking, cross-border global accounts are accessible to all.

Offshore banking offers a greater choice of the best banks and currencies to safeguard assets and hedge against risks. HNWIs have more flexibility to diversify their investment portfolios and gain access to a wider range of investment opportunities.

The growing number of high-wealth individuals moving to Dubai is impacting traditional private banks, which are beginning to see the growth opportunities in the MENA region. One such banking group is HSBC, which is heavily investing in the region.

There are many benefits to banking in Dubai:

    • • Often cited as leading global financial hub, Dubai is one of the best places in the world to do business

 

    • • Dubai offers a fantastic infrastructure for business and is home to several international banks offering a variety of business-friendly products and services

 

    • As a global leader in cryptocurrency and blockchain technologies, Dubai offers the benefits of a well-regulated decentralised finance ecosystem and is considered one of the world’s most blockchain-friendly nations

Succession planning

While succession planning should be a priority, it’s not top of the list for many HNWIs, surprisingly. A recent wealth and asset management survey revealed that only 24% of Middle East HNWIs have a full estate plan in place to pass on to the next generation.

The uncertainty brought about by the COVID-19 pandemic serves to emphasise the importance of succession planning. HNWIs, in particular, need a clear plan to ensure their wealth is transferred as they would wish, while minimising tax liabilities for their successors.

The benefits of succession planning in the UAE include the following:

• There is no inheritance tax in the UAE
• The UAE’s financial free zones have their own legal systems, which offer greater privacy and asset protection than many other jurisdictions
• Free zones boast some of the most advanced trust and foundation laws in the world
• Will registration in the Dubai International Finance Centre (DIFC) allows the inclusion of an individual’s worldwide assets


Business setup Dubai

Thanks to its modern infrastructure, stable economy and progressive government initiatives, Dubai is an ideal ecosystem for business setup, offering a range of licences and locations on the Mainland, Free Zones and offshore.

However, the unique needs of HNWIs and their families go beyond business setup and visa processing. That’s where we come in. As Dubai’s largest and most trusted business setup advisory firm, Creative Zone now offers a bespoke Premier Service providing an end-to-end Global Corporate Structuring solution for our valued clients.

Our comprehensive fiduciary services cover all aspects of global wealth management, including Global Tax Advisory, Accounting, Banking, Investment and Asset management. Our international experts can help you protect and grow your assets, mitigate risks, and seek out new opportunities on a truly global scale. From Dubai to beyond, we can help you achieve your dream of becoming a truly global citizen.

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