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Why Relocating to UAE is the Best Option?

Owner's Profile

Judith Mariya

Published on January 31, 2024, 11:24:24

77

uae, dubai, uae residents, relocation, tax free

Do you wish to relocate to another country and start your life afresh? The UAE would be your first-choice destination.
What draws investors and expatriates to the UAE? Is it the luxurious lifestyle, living expenses, well-developed infrastructure, real estate opportunities, business-friendly environment, regulatory framework, or a combination of all these elements?
In addition to these considerations, it is the country’s tax-free environment that significantly attracts a large number of expatriates. Flexible flight charges, abundant job opportunities, stable economy and supportive government programmes also woo expats. Indians are the largest expat community in the UAE, covering over 30 per cent of the total population in the country.

Tax Fears

However, there has been a buzz that a certain tax is being charged on the money transferred back to home by non-resident Indians (NRIs). Under the current regulations, Indian residents have the authorisation to transfer funds abroad or engage in overseas expenditures through the Liberalised Remittance Scheme (LRS), with an annual limit of $250,000 (equivalent to Dh918,262). NRIs have the privilege to repatriate funds up to $1 million (Dh3.67 million) annually.

LRS primarily encompasses the remittances for investments abroad that Indian residents are permitted to undertake. Beyond remittances, individuals can also utilise the foreign exchange facility for purposes such as medical expenses or travel, falling within the scope of LRS.
Only resident individuals are qualified to transfer funds outside India under the LRS scheme, subject to specific terms and conditions. The scheme does not apply to NRIs, corporates, partnership firms, trusts and similar entities.
Amid various speculations indicating a 20 per cent tax on foreign outward remittances without clear eligibility criteria, causing concerns among NRIs, it is essential to clarify that these LRS rules are exclusively applicable to resident Indians and not NRIs.
NRIs can continue to avail themselves of the $1 million (Dh3.67 million) limit for repatriation of funds overseas, adhering to the conditions specified for them. As an NRI, there is no need for concern regarding this tax.

William Russell Report

According to a recent report published by a renowned insurance firm, the UAE ranks fourth globally among the 12 tax-free countries for expatriates to consider relocating in 2024.
With a monthly cost averaging around Dh3,590 and an average monthly net salary of approximately Dh13,015, the UAE has emerged as a top choice among zero-tax countries, the ranking published by expat insurance provider William Russell.

Oman tops the list followed by Kuwait and Bahrain as the most affordable tax-free places.
UAE, with a relocation score of 5.84/10 and a population of about 10 million, sees expats paying approximately $154 for a one-way economy ticket from London to Abu Dhabi. For those flying from New York, the cost for the same ticket is around $530, according to the report.
In the UAE, renting an apartment averages around $1,016 per month. Expats can anticipate spending about $169 monthly on utilities, with total monthly costs in the country averaging around $959. The average monthly net salary in the UAE is approximately $3,474, as per the William Russell report.

Oman stands out as the most economical country for purchasing or renting an apartment, and it also boasts the lowest monthly costs (excluding rent). Monthly utility bills in Oman are around $103, and the average monthly net salary is approximately $2,205.

In second place is Kuwait, with a relocation score of 6.49/10. Kuwait ranks as the fourth cheapest country for apartment rentals, averaging around $775 per month. Additionally, it is the second most affordable country for both monthly costs and utility bills, tying with Brunei. The average monthly net salary in Kuwait is around $2,743.
Bahrain, earning a relocation score of 6.36/10, is the second cheapest country for purchasing an apartment, with an average cost of around $173 per square meter. It also ranks as the fifth most affordable country for both monthly costs and utility bills, with an average monthly net salary of $2,072.

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