Emigrating to Dubai 2022 – All the Pros and Cons

Dubai – the land of unlimited opportunities, cheap taxes, and recently, the celebrity hotspot amid the corona pandemic.

Thanks to the influencer emigration craze, Dubai is now more in the spotlight of intentional emigrants than ever before. Influencers like the Harrisons, Fiona Erdmann, Sami Slimani and Georgina Fleur live in Dubai and show the city from its most beautiful side, attracting more and more emigrants and tourists.

 

Dubai – the city that is currently on everyone’s lips.

Emigrating to Dubai: The ultimate luxurious desert metropolis with summer temperatures all year round and a 0% tax regime? The dream of the rich and beautiful?

At least that’s the impression one currently gets of Dubai. But can Dubai really deliver everything it seems to promise? Are there really only advantages or does the city also have a catch?

Let’s explore these questions together and immerse ourselves in Dubai’s life and culture.

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CHAPTER 1

Some basic facts about Dubai

Before we start, I will give you some basic information about Dubai in this chapter.

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The geographical location of Dubai

The United Arab Emirates and therefore also Dubai are located outside the EU and belong to the Asian continent. The UAE borders Saudi Arabia and Oman and lies south of Iran, separated from the Persian Gulf.

Germany Dubai

Dubai is an emirate of the United Arab Emirates (UAE)

Dubai is a city – the largest – in the United Arab Emirates and the capital of the Emirate of Dubai.

The United Arab Emirates (UAE)

The United Arab Emirates on the Persian Gulf has a total of seven emirates. Emirate is the term used to describe the domain of an emir and is historically a province administered by a prince. Meanwhile, there are also emirates that are considered states.

An emir in turn translates as „ruler“, „prince“ or „governor“. The term originally meant the commander of a group of Muslim soldiers who took the governor’s place after conquests and sought recognition from the caliph. A caliph used to be considered the ruler of the entire Islamic empire, which is why the ruler was also called caliph. Meanwhile, a caliph is a ruler of an independent Islamic state. An emir, on the other hand, is a commander or prince whose dominion is called an emirate.

The capital of the United Arab Emirates is Abu Dhabi.

Dubai is about 140 km from Abu Dhabi and can be reached in 1.5 hours by train, which runs every 20 minutes.

Dubai DWP

The UAE’s seven emirates

The seven emirates of the United Arab Emirates are:

Abu Dhabi (capital)
Dubai
Sharjah
Ajman
Umm Al Qaiwain
Ras Al Khaimah
Fujairah

Now I admit that I have digressed a bit. However, I think it’s important to have some knowledge about the history of Dubai. So from here on, let’s get back to Dubai.

Flight connections between Germany and Dubai

Several aircraft fly daily from Germany to Dubai. Although the actual flight time from Dubai to Germany is 6 h 15 min, it is often longer due to the lack of direct connections. To be honest, though, I must point out that Corona may also be to blame for this state of affairs.

In any case, if you book early, you can find flights starting at 280 euros. For my example, I looked today (01.03) for early November, a good half-year in advance.

Flight Germany

Screenshot (from Germany to Dubai)

Foreigners in Dubai

Dubai has flourished in recent years. Not least because of the tax advantages, an increasing number of foreigners are emigrating to the country, so that the foreigner quota is now almost 90%. About 60% of the total population comes from South Asia.

In total, more than three million people live in Dubai. Over 90% of the population of the Emirate of Dubai lives in the city of the same name.

According to auswandern-info.com, 15,026 Germans officially emigrated to the UAE between 2008 and 2017, of whom 11,576 returned to Germany. In other words, almost 77% of emigrants turned their backs on Dubai within 10 years. Why? Please read on for the answer.

Economy

Dubai is considered to be a very rich region. Due to its oil wealth and liberal economic policies, the emirate has experienced extraordinary growth. Meanwhile, the sale of oil only accounts for about 50% of the economy. Dubai is also a trans-shipment centre for gold and diamonds.

Dubai is best known for its spectacular building projects, almost all of which are privately financed.

As a kind of landmark, the Burj Khalifa has adorned the city’s skyline since 2010. With a height of 828 m, this skyscraper is by far the tallest building in the world. A focal point of Downtown Dubai, the skyscraper is home to the world’s largest shopping centre. In total, Dubai has over 200 skyscrapers with a height of more than 150 m, of which 20 are over 300 m high.

In addition, Dubai has one of the leading commercial ports in the southern Gulf.

Although Dubai recorded enormous economic growth until 2008, this development has slowed since the financial crisis: the building boom cooled down, and the knowledge of the finiteness of its oil resources also led to tensions. Since then, Dubai has been concentrating on tourism.

Leisure

In addition to the countless construction projects, many amusement parks provide leisure time fun. Also worth seeing are the water shows of the Dubai Mall Fountain Show with 6,000 lights or a ride with the „Abra“ water taxi on Burj Lake. And, of course, dune and camel safaris are also on Dubai’s to-do list.

Luxury in Dubai

It is not without reason that Dubai is one of the most visited cities in the world and has the highest tourism revenue worldwide.

However, Dubai doesn’t only attract tourists but also wealthy people from all over the world. Yes, Dubai is rich and luxurious – a real luxury paradise that leaves nothing to be desired. Dubai appeals with its modern architecture, luxurious hotels, huge shopping malls and grand fountains.

Dubai – a city of superlatives. In Dubai, everything seems possible.

CHAPTER 2

Life in Dubai

If you are considering Dubai as a business and corporate location, you should think about factors such as the climate, official language, religion and culture.

I will also briefly touch on how the cost of living compares to Germany.

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The climate in Dubai

The Arabian Peninsula of Dubai has an arid, subtropical climate, i.e., a desert climate. This means it is extremely hot and dry. As you can see in the climate table below, the average high temperature is 40° C, and at night the average low temperature is 30° C. The temperature of the Persian Gulf water ranges from a warm 22° to 32°.

But when exactly is the best time to travel to Dubai?

The best time to visit Dubai as a tourist is in „winter“. However, one cannot speak of a real winter in Dubai because, for us Europeans, even the „winter temperatures“ in Dubai are on a summer level.

For us, pleasant temperatures prevail from November to April, which is also the peak tourist season.

On the other hand, summer is so hot that you quickly want to escape to an air-conditioned mall. Of course, this also varies from person to person.
Weather Dubai
Source: https://www.reise-klima.de/klima/dubai 

 

The official language in Dubai

The official language of the emirate and the city is Arabic. Nevertheless, you are not at a loss in Dubai as many residents are proficient in English, so it’s easy to communicate with the international language. It should also be remembered that Dubai has a high proportion of foreigners, whose common denominator is English. Still, you should be prepared to learn Arabic and get acquainted with Islamic culture.

Religion in Dubai

Dubai is a Muslim country. Although Christians, Hindus and Buddhists also live here, they are in the minority with 25% of the total. The Emirate of Dubai is the only one that has a Hindu temple and a Sikh gurdwara.

Culture in Dubai

If you are interested in Islamic culture, Dubai is the place to be, where ancient tradition meets modernity. You will find museums where you can learn about the roots of the culture.

Of course, in Dubai, as in any other country, you have to adapt to the culture of the country. This means, for example, that you should refrain from wearing short clothing when visiting mosques.

Another important aspect is Ramadan. During Ramadan (usually from mid-April to mid-May), different rules apply: eating or drinking in public is not allowed. Buying chewing gum is also prohibited.

Currency in Dubai

In Dubai, as in the other emirates, the official currency is the Dirham (abbreviation: AED, Dh, Dhs and DM). 1,000 euros is equivalent to AED 4,028.48.

Judicial system and rules in Dubai

Yes, the judicial system in Dubai is a difficult topic, which is why I will list the most important applicable laws and rules without comment.

Dubai’s jurisprudence is based on Sharia law. Sharia describes „the totality of all religious and legal norms, mechanisms for norm finding and rules of interpretation of Islam“. (source).

For example, this means that exchanging caresses and kisses in Dubai can be punished by imprisonment, fines or deportation. Likewise, extramarital sex is punishable.

Unless you are married to your partner, cohabitation with your partner is also punishable.

Stricter rules also apply in the underground: eating and drinking are forbidden there, as is chewing gum.

Swearing in public and carrying alcohol are also considered punishable offences.

Safety in Dubai

Even though there is a certain scepticism towards Muslim countries, you can still walk the streets without fear.

Cost of living (incl. flat) in Dubai

Of course, it’s always difficult to make a general statement about the cost of living, as it varies depending on your personal lifestyle. Nevertheless, I did some research and came across the following information:

A two-room flat costs between AED 100,000 and AED 140,000, which is 22,615 or 31,661 euros per year, or 1,884 or 2,638 euros per month. There are also additional costs of AED 1,200 to AED 5,000, or 271 to 1,130 euros per month.

The cost for schooling ranges from AED 20,000 to AED 40,000.

According to emigration-info, one needs about 3,993.42 euros (AED 17,793.51) to maintain a standard of living similar to that in Germany with 3,700 euros (source).

Although consumer prices are 8.53% lower than in Berlin, due to high rents, total consumer prices are almost 8% higher than in Germany.

Restaurant prices are also higher than in Germany.

Interestingly, electrical appliances are cheaper than in Germany because import duties are low. Cars are also very cheap because of the low import duties. Overall, buying and maintaining a car is inexpensive in Dubai, and petrol prices are comparatively low.

The table below shows you different indices: the cost of living index of Dubai and Berlin, as well as Abu Dhabi.

Lebenshaltungskosten Dubai, Deutschland

Own illustration, based on: : https://www.numbeo.com/cost-of-living/rankings_current.jsp

CHAPTER 3

Entering Dubai

What do you need to bear in mind when entering Dubai? Are there any other things you have to be aware of? How does searching for a flat work? Here is a brief overview.

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Entering Dubai

To enter Dubai, you need a passport, but not a visa, as this is issued automatically on entry. You can find more detailed entry requirements here: link

Tourist visa

There is a tourist visa that is issued on entry and is valid for 90 days. It can be extended once for another 30 days.

Travelling to Dubai during Corona

Tourists can currently enter Dubai with foreign health insurance and a negative Covid-19 PCR test that is not older than 96 hours. The result must be printed in English and Arabic.

Residence permit in Dubai: Residence Visa

To live in Dubai, you need a Residence Visa. There are three ways to obtain a residence permit.

  • Become an employee (Residence Visa)
  • Buy a property (minimum value > 1 million) + proof of income (Investors Visa)
  • Establish/participate in a company (Investors Visa)

When setting up a company in Dubai, you will incur approximately 4,000 euros in set-up fees and a further 4,000 euros in annual costs.

Work Visa in Dubai

In Dubai, you can apply for a Work Visa for AED 200 per year. The prerequisite for this is an invitation from a company. Employees with a permanent job receive a residence and work permit.
According to auswanderlust.de, you also need to have your school or university leaving certificate legalised at the UAE embassy and undergo a medical examination. In addition, proof of health insurance must be provided.

Such a residence permit is usually valid for three years and is renewable. An unlimited residence permit is almost impossible to obtain in the UAE and can only be acquired through an influential employer, for example. Moreover, persons over 60 years of age are no longer granted a work permit.

Working in Dubai

The high proportion of foreigners suggests the job market in Dubai has a lot to offer. Although it is officially stated that UAE workers are preferred, your chances on the job market are good. Specialists and academics such as doctors, nurses, pharmacists, engineers, IT specialists and managers have especially good prospects.
The working week in Dubai is five days or 48 hours. Lunch breaks are usually between 2 pm and 5 pm. Friday and Saturday are the official weekend in Dubai.
Overall, salaries in AED are lower than in Germany, even though employees in Dubai only have to pay 5% social security contributions – regardless of how much money is earned.

Emigrating to Dubai – what you need to know

Since Germany and the UAE do not have a social security agreement, and Dubai or the UAE do not have a statutory pension scheme, you will have to take care of yourself privately from now on. Since there is no statutory insurance system in the UAE (Emirate of Abu Dhabi being an exception), emigrants should take out health insurance abroad.

Living in Dubai

First of all, it is important to note that – as already mentioned above – you are only allowed to live with a partner if you are married.
There is also a big difference compared to Germany when it comes to looking for a flat, which has to do with the timing of the search. In Dubai, the search for a flat is primarily for the short term. It is rather unusual to rent a flat months in advance. In Dubai, people view several flats and usually decide immediately afterwards whether they want to move in or not.

CHAPTER 4

Taxes in Dubai

This chapter gives you an overview of all of Dubai’s tax advantages.

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The reason why Dubai is the emigration destination of many wealthy entrepreneurs and individuals is (most probably) partly due to the lucrative tax model and the prevailing tax exemption in Dubai. Yes, you heard me right. You do not pay income tax, business tax, corporate tax or VAT in Dubai. UPDATE: as of June 2023, Dubai will levy 9% taxes.

There is no income tax in Dubai, so any kind of income such as salary, pension or capital income is tax-free. There is also no wealth tax in Dubai. Likewise, no tax has to be paid on property you own, and no property gains tax is levied. Only a transfer tax of 4% has to be paid. Inheritance and gift taxes are also not payable. Furthermore, for a long time, there was no VAT – since 2018, a VAT of 5% has been levied.

Important Note: The 0% tax regime does not always apply. For example, companies engaged in the extraction of oil or the manufacture of petrochemical products and also banks are exempt.

CHAPTER 5

The catch with Dubai

Dubai – the city that lures with luxury, low prices and tax exemption.

At least that’s how it seems at first glance. But as the saying goes: all that glitters is not gold.

So, let’s take a look at Dubai’s drawbacks together.

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No, that’s not quite true.

After reading this article, you may now be thinking: „Wow, this is paradise. I’ll set up a company in Dubai and won’t have to pay tax on my income. Then I’ll have a lot of money in my account that I can spend at home in Germany and live like a king in France.“

Well, then I’m afraid I have to disappoint you at this point. It’s unfortunately not that simple.

Taxes in Dubai and other countries

Currently, there are no double taxation agreements with the United Arab Emirates. This means that you may be liable to pay tax in Germany under certain circumstances. You are probably wondering under which circumstances. Let me give you an example.

If you earn rental income in Germany, for example, or if you reside in Germany for the most part, the German tax authorities may require you to pay tax on your income earned in the Emirates.

There is really only one solution to this: emigrate completely to Dubai and move your centre of life there.

For such a set-up to continue beyond that point, you need to be able to prove that your place of business is in Dubai. This means you must have your own premises, staff and a local business address, i.e., everything that is necessary for a business. You will also need to actively manage your business from Dubai.

If you think this is not a problem for you, please read on, as there are even more restrictions.

Dubai, outside the EU

If you emigrate to Dubai, you are effectively turning your back on the EU. This also means that you are forsaking the benefits of the EU. You may have forgotten, but living in the EU brings with it a number of advantages: from the single currency, to social benefits such as social security systems or basic health care in an EU host country, to the free internal market that allows for free trade across national borders. The advantages of the EU, on the one hand, are corresponding disadvantages outside the EU on the other.

The distance to Germany

Then, of course, there is the short distance to the home country. In Dubai, you live very far away from your family. You should be aware of this as it will not be easy to fly to Germany for a short time.

Social security agreement

Within the EU, pension rights are also preserved. A social security agreement even preserves pension rights between the EU and America. No such social security agreement exists between Dubai and Germany.

In addition, emigration involves a lot of bureaucracy anyway. A move outside the EU comes with additional hurdles, such as applying for a visa, which can take up to six months. A move from Germany to Dubai is also not easy and involves an inordinate amount of work, so that the solution of „selling everything“ is usually chosen.

Furthermore, one should be aware that after a certain period of time, certain entitlements may expire, such as the entitlements to reduced earning capacity protection or unemployment benefit I.

Perhaps another interesting point to note: According to wmn, internet celebrities who emigrate to Dubai have to sign a contract stating that they are not allowed to speak badly about Dubai in any form (source: https://www.wmn.de/buzz/diese-influencer-sind-bereits-in-dubai-id57991). While this may not affect you directly, I didn’t want to withhold this point from you.

Chapter 6

Conclusion

I hope this information has given you a good overview of Dubai and that you can now form your own opinion. However, I’d like to conclude by sharing my personal opinion with you in this section.

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I hope this information has given you a good overview of Dubai and that you can now form your own opinion. However, I’d like to conclude by sharing my personal opinion with you in this section.

As you have read, while Dubai offers a number of advantages, there are equally a number of disadvantages that you should not lose sight of.

For me personally, Dubai would not be an option as a business or residential location as I feel very comfortable and safe in the European culture. The Arab culture may also have its merits, but I would not feel comfortable there with my family due to the strict regulations. Also, even though Malta gets very warm in the summer, I still think Dubai is a lot hotter.

So, from one entrepreneur to another, I would advise you to look at other alternatives besides Dubai, such as Malta.

Malta is within the EU, is a short distance from Germany and is not blacklisted despite having an effective tax rate of 5%. Malta also has a favourable Mediterranean climate. Moreover, since the official language is English, there is less bureaucracy than in some other so-called tax havens, where you sometimes have to hire translators.

If you want to know more about Malta, I recommend the following article: link.

Living in Malta – The Ultimate Guide About Emigration (2022) (philippsauerborn.com)

In closing: Do you have questions or need advice?

I know: It’s a lot of input!

A lot of work went into this overview and I hope it was helpful to you.

Is anything still unclear? Or do you need more information on a specific topic?

My offer to you: Book an initial consultation with me in the adjacent form.

I’m looking forward to your inquiry. Until then, with sunny greetings from Malta, I am

Yours,
Philipp Sauerborn

About Philipp M. Sauerborn

Philipp Maria Sauerborn is a certified tax advisor and expert in International Tax & Blockchain. As CEO of Dr. Werner & Partner in Malta, he has already advised over 3000 clients on their tax situation.

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Disclaimer

The above-mentioned article is simply based on independent research carried out by Philipp Sauerborn and cannot constitute any form of legal advice. If you would like to receive further information, please contact us for an appointment.

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