Australia to Dubai

G'day, read this first

One thing I have to be blunt about. I'm not a registered tax agent and I'm not a lawyer, in either country. I won't tell you what your tax position is, because I'm not allowed to and because I'd probably get it wrong. What I can do is describe the terrain, tell you where I fell in, and point you at people who are registered to take a position. Use this to get smarter before you pay someone. Don't use it instead of paying someone.

The one decision that determines everything

Before any entity, any free zone, any foundation. Are you staying an Australian tax resident, or are you genuinely going to stop being one?

Everything downstream forks on that. Same boxes, same arrows, completely different answer. And it's why the version of this you saw online is misleading rather than wrong: it sells Path B's numbers to Path A's life.

The six questions

Say these out loud. Hesitate on more than one and you're on Path A, whatever the brochure told you.

1. Will your partner and kids live here with you?
2. Will the Australian house be sold, or let to a real tenant at a real rent?
3. Are you going indefinitely, or do you have a return date in your head?
4. Will you be back in Australia fewer than about 45 to 60 days a year?
5. Will board decisions physically happen here, made by someone who's here?
6. Can you hold that pattern for three years or more?

Does this even fit your business?

Chapter 0 was about you. This one is about what you do for a living, because plenty of businesses simply cannot make this trip, and a fair few that can still shouldn't bother.

Four things decide it. Can the work physically be done from here. Where the people who do it are sitting. Whether the business is tied to an Australian licence or registration. And whether there's enough profit to justify moving your life.

Where it works well

Software and SaaS. Digital products, courses, paid communities. Media, affiliate and ad revenue. Agencies and consultancies where you and the delivery team are genuinely offshore or fully remote. E-commerce fulfilled outside Australia. Broadly: if the business is a laptop and a customer list, it travels.

Then there's a second group that does better than the first, because these sit on the UAE's Qualifying Activities list and can reach 0% rather than 9%: commodity trading, holding shares and securities for investment, group treasury and financing, headquarter services to related entities, logistics, and distribution out of a Designated Zone. Almost nobody chasing this ever looks at that list, which is a shame, because it's the difference between nine per cent and nothing.

Where it works, but at 9% rather than 0%

Consulting, agencies, coaching, professional services, software development sold as a service. Consultancy is not a Qualifying Activity under Ministerial Decision 229 of 2025. You'll still save an enormous amount against 47%, but you won't be at zero, and this is the single most common gap between what people are sold and what they get.

Where it doesn't work

• Anything physically anchored in Australia. Hospitality, retail, trades, construction, clinics, gyms, childcare, Australian property development. I run venues here, so I'll say it with feeling: you cannot operate a café in Perth from an office in Dubai, and the ones who try end up doing neither well.
• Anything tied to an Australian registration. Healthcare billing Medicare, law where you're admitted in Australia, financial advice under an AFSL, real estate agency, migration agents. Somebody commented exactly this under that reel: "can't do that when you're a doctor billing Medicare". They were completely right and nobody answered them.
• Anything living on Australian government money. Contracts, grants, the R&D tax incentive. Moving offshore usually ends eligibility.
• Anything where the value is you being in the room. If the business runs on your personal network in one Australian city, it evaporates when you're not at the barbecue. No structure fixes that.

The floor

Under roughly $250k to $300k of annual profit the maths stops justifying the disruption. At $150k you'd save around $39k a year, and spend somewhere between $15k and $20k running it once you count both countries, so you'd have relocated your entire life for about twenty grand. At $300k it's roughly $93k against the same $20k. At $500k it's about $169k. That's where it starts being a genuine decision rather than an expensive hobby.

And all of that sits before the exit tax, which doesn't care what kind of business you run. Run the numbers below.

The map, in plain English

What each box is for

If you stay in Australia

You can build every bit of this and nobody will stop you. Here's what Australian law does to it while you're still living there.

The Dubai company is probably an Australian tax resident

A company is an Australian tax resident if it's incorporated there, or if it carries on business there and its central management and control is there. That means the big decisions: strategy, major contracts, capital, direction. Not who answers the emails.

If you're in Sydney deciding what the Dubai company does, the Dubai company is centrally managed and controlled in Sydney. It's then an Australian resident taxed on worldwide income at 25% or 30%, and it has an Australian return to lodge. A certificate from a free zone doesn't change any of that.

Even if it isn't an Australian resident, the CFC rules catch it

Part X of the ITAA 1936 deals with foreign companies controlled by Australians. A UAE company is a controlled foreign company if five or fewer Australian entities hold 50% or more, or one Australian entity holds 40% or more. You're an attributable taxpayer at a 10% interest.

It escapes only by passing the active income test, which needs a tainted income ratio under 5%. And here's the problem for anyone selling services:

Fail the test and the profit is included in your assessable income whether or not a dirham ever leaves the UAE. No cash, still taxed.

Two more that apply

Personal services income. Where more than half the income under a contract is for your own skills and effort, the PSI rules can attribute it to you personally regardless of which entity issued the invoice, unless you pass the results test or one of the others. An offshore company doesn't change the character of your own labour.

Source. If the work is physically done in Australia, the income can have an Australian source. Source follows where the profit-making activity happens, not where the invoice is raised.

What you have to disclose

What a compliant Path A actually looks like

It exists. It just isn't a tax play.

• A UAE entity serving genuinely non-Australian customers, run by people who are genuinely here, where you're an investor rather than the operating mind
• Full CFC and IDS disclosure, attribution accepted and paid where it applies
• Australian company tax paid on Australian work, with franking credits attaching so you aren't taxed twice

You end up with a real international business and a normal Australian tax bill.

If you actually go

This is the version where the numbers work. It also has a price on the door that nobody puts in the reel. Do it properly, and do it in this order.

1. Pick the date and mean it

   Residency changes on a date and everything keys off it. Choose it deliberately instead of working it out later from your passport stamps.

2. Sort the Australian house

   Sell it, or let it to a real tenant on a real lease. A house kept available for you, or rented to your brother, is the single most common reason a claimed departure falls over. The ATO's ruling gives a retained home less weight if it's genuinely leased to third parties, and more weight where it's kept available and you do in fact go back to it.

3. Move the family

   Immediate family staying in Australia while you work here is, in the ATO's words, often accompanied by increased connections and a settled routine consistent with residing there. The fly-in-fly-out founder with a family in Melbourne is not a non-resident, and no structure changes that.

4. Set up the UAE side before you need it

   Licence, then establishment card, then entry permit, then medical, then Emirates ID, then residence visa. Chapters 5 and 6. You have 60 days from entering on the permit to finish the residency formalities.

5. Get a residential lease in your own name

   Not a hotel, not a mate's spare room. A certified tenancy contract is a documentary requirement for a UAE tax residency certificate and it's the single best piece of evidence that you live here. Mine was the first thing I organised and I'd do it that way again.

6. Work out the exit tax before you leave, not after

   See below. This is the number that ambushes people.

7. Lodge a part-year Australian return

   Declare the date you ceased residency. You get a part-year tax-free threshold: $13,464 guaranteed plus roughly $395 for each month you were resident.

8. Hold the pattern

   Short trips home, no rebuilding of an Australian base, an actual life here. The evidence that matters is boring: leases, school enrolments, DEWA and Etisalat accounts, a local bank, a car, memberships, a gym you actually go to.

CGT event I1, the exit tax

When you stop being an Australian tax resident, section 104-160 deems you to have sold every CGT asset you own at market value. No sale, no cash, still a taxable gain. Excluded: taxable Australian property, broadly Australian real property and interests in it, and pre-CGT assets from before 20 September 1985.

You can elect under section 104-165 to disregard it. The price is that those assets are then treated as taxable Australian property until you sell them or become an Australian resident again, so Australia taxes the whole gain later, including everything it grew while you were here.

The other costs of leaving

Choosing the UAE entity

Three species, and they aren't interchangeable.

A realistic shortlist

Formation sequence

1. Choose the zone and the activity list

   The activities on your licence decide what you can legally invoice for and, if you're chasing free zone status, whether your income can even be qualifying. Get this right first. Changing it later costs an amendment fee and sometimes a whole new licence.

2. Reserve the trade name
3. Initial approval
4. KYC and incorporation documents

   Passport, photo, sometimes a CV and a business plan. MOA and AOA signed.

5. Lease or flexi-desk agreement
6. Licence issued

   Three to ten working days in the fast zones. RAKEZ advertises 24 hours on Biz Starter, Meydan advertises 60 minutes on Fawri, both assuming your documents are clean, which mine never were the first time.

Visa, Emirates ID, and actually living here

Nothing immigration-related starts until the company has an establishment card. That's the company's registration with immigration and it's the gate everything else queues behind.

1. Establishment card and immigration file

   AED 1,000 to 3,000 in free zones, often bundled. Eight to fourteen business days.

2. Entry permit

   One to five working days, valid 60 days. Add two to five days if you're already here on a tourist visa and need a status change. ICP quotes AED 100 application, AED 100 permit, AED 100 smart services, AED 500 status adjustment.

3. Medical fitness test

   Blood test and chest X-ray. One to three working days.

4. Emirates ID biometrics

   In person. Nobody can do this for you.

5. Residence visa issued

   Two to seven working days. Health insurance is mandatory in Dubai and Abu Dhabi.

6. Emirates ID delivered

   Five to ten working days after biometrics, express available.

Add the steps up and a clean run from engagement to Emirates ID in hand is three to eight weeks. Since 2022 there's no visa sticker in your passport, the Emirates ID is your proof of residence. Finish the formalities within 60 days of entering on the permit or it's AED 50 a day.

Banking

Much easier than it used to be. The UAE came off the FATF grey list in February 2024 and the EU removed it from its high-risk AML list in 2025, and the digital banks have changed the bottom end completely.

What they want: trade licence, MOA and AOA, shareholder and UBO identification, board resolution, and source of funds, meaning statements, signed contracts, audited financials. Enhanced due diligence on complex ownership and anything offshore.

What you'll actually pay here

Small Business Relief, and why you should have it in your calendar

Revenue at or under AED 3m in the current and all previous tax periods. Elective, treats you as having no taxable income. You still register and still file a simplified return, and you can't carry forward losses or disallowed interest from an election period.

Qualifying Free Zone Person, all seven conditions

1. Be a free zone person, incorporated or registered in a free zone
2. Maintain adequate substance in the free zone: core income-generating activities conducted there, adequate assets, adequate full-time qualified employees, adequate operating expenditure
3. Derive Qualifying Income
4. Not have elected into the standard 9% regime
5. Comply with the arm's length principle and transfer pricing documentation
6. Pass the de minimis test: non-qualifying revenue at or under the lower of 5% of total revenue or AED 5m
7. Prepare and maintain audited financial statements, whatever your revenue

Audited accounts

Under Ministerial Decision 84 of 2025, for tax periods from 1 January 2025, audited financial statements are required for taxable persons over AED 50m revenue, every Qualifying Free Zone Person regardless of revenue, and every tax group regardless of revenue, as audited special purpose financial statements.

Transfer pricing

Arm's length applies to every taxable person with related party dealings. There's no size exemption from the principle. The thresholds are about documentation:

• Return disclosure: related party transactions schedule once aggregate RPTs pass AED 40m, then per-category disclosure above AED 4m. Connected persons schedule at AED 500,000
• Master file and local file: where group consolidated revenue is AED 3.15bn or more, or the entity's own revenue is AED 200m or more. Produced within 30 days of an FTA request

The holding layer: do you need it?

The Australian holdco

The real reason to have one, which the marketing never names: under Subdivision 768-A of the ITAA 1997, a foreign equity distribution received by an Australian resident corporate tax entity is non-assessable non-exempt income where it holds a participation interest of 10% or more in the foreign company. UAE profits can come up to an Australian holdco without Australian tax at that step.

Two more things about an Australian holdco:

• Director residency. Section 201A of the Corporations Act requires a proprietary company to have at least one director ordinarily resident in Australia. If you're the sole director and you move here, you're in breach. You need a genuine Australian-resident co-director who does real governance, and then that person's involvement has to be squared with the corporate residency test. It's a live tension, not a box to tick.
• Company tax rate. 25% if aggregated turnover is under $50m and no more than 80% of assessable income is base rate entity passive income, otherwise 30%. A holding company whose income becomes mostly dividends, interest and rent can fail that 80% test and flip to 30%, which also changes the franking rate. Somebody needs to be tracking it.

The UAE holdco

The Foundation

A UAE foundation is a body corporate with separate legal personality, no shareholders and no members. It is expressly not a trust: the legislation in all three jurisdictions says the property isn't held on trust. It behaves economically like one, which is exactly where the trouble starts.

In all three you can reserve substantial powers: amend the charter and by-laws, change objects, direct investments, appoint and remove council and guardian, add or exclude beneficiaries, wind it up. In all three those reserved powers expire on your death, or after 50 years for a corporate founder. In all three you can sit on the council but you can't be council member and guardian at the same time.

The Australian problem nobody can answer

This is the largest unresolved issue in the whole structure and it isn't a gap in my research. There is no ATO public guidance on how a UAE foundation is characterised for Australian tax purposes.

Property and SPVs

The Dubai Land Department doesn't publish one statutory list of acceptable corporate owners. Eligibility gets extended jurisdiction by jurisdiction through memoranda of understanding, then operationalised through DLD's own company registration service, which issues a reference number without which nothing completes.

The fees that matter

Getting the money out

Every "0%" claim is really a claim about tax inside the structure. The number that matters is what you pay to get money into your own hands, and it depends entirely on which path you're on.

Division 7A, in one page

Division 7A treats amounts a private company provides to a shareholder or associate as an assessable unfranked deemed dividend. Payments, loans, and forgiven debts. It applies to non-resident private companies too.

• "Payment" includes providing a company asset for use, under section 109CA. The company apartment, car or boat is caught the moment you first use it.
• "Loan" is broad: an advance, a provision of credit, any other form of financial accommodation, or any transaction that in substance effects a loan.
• The escape (s 109N): a written agreement in place before the company's lodgment day, interest at or above the benchmark rate, and a maximum term of 7 years unsecured or 25 years secured by a registered mortgage over property worth at least 110% of the loan. Then minimum yearly repayments.
• Benchmark rate 2026-27: 8.77%, up from 8.37%.
• Ceiling: total deemed dividends can't exceed the company's distributable surplus.

The compliance calendar

Two countries, two calendars, no overlap. This is the running cost people forget when they compare a setup quote to their current tax bill.

UAE, assuming a calendar tax period

Australia, if you keep any connection

What it costs

One-person consultancy, one visa

Realistic all-in first year: AED 20,000 to 25,000 for a lean RAK or Sharjah setup, AED 25,000 to 35,000 for a Dubai address through Meydan or IFZA, AED 46,000 to 52,000 for DMCC, where the licence alone is 39,402 and blows straight past the licence line in the table above.

Holdco plus opco

What goes wrong

The five failure modes, in order of how often I see them

1. The departure that wasn't one

   House kept available, family still there, frequent trips back, a return date in mind. Australia never let go, so the whole structure sits inside the Australian net and you've paid for the privilege.

2. Central management and control never actually moved

   Minutes signed in Dubai, decisions made on a phone in Perth. The UAE company is an Australian tax resident and hasn't lodged anything.

3. Nobody ever ran the active income test

   Australian clients billed through Dubai while still living there, so the income is tainted services income, the test fails, the profit is attributed. Usually surfaces years later.

4. QFZP status assumed rather than tested

   Consultancy isn't a Qualifying Activity. De minimis blown. Five tax periods at 9%, and an audit requirement that was being ignored the whole time.

5. The foundation was funded before anyone asked what it was

   Assets moved in, then someone finally asks whether Division 6AAA applies. By then the transfer has happened and the attribution has been running quietly.

Part IVA

The general anti-avoidance rule applies to a scheme where a taxpayer gets a tax benefit and, on the eight factors in s 177D(2), you'd conclude someone entered into it for the dominant purpose of getting that benefit. The test is objective. What you privately intended isn't the point.

What the ATO says it's watching

There's no taxpayer alert naming the UAE or Dubai. The ATO frames its warnings by arrangement type. Its "what attracts our attention" page for privately owned and wealthy groups lists, almost word for word:

• Entities incorrectly declaring residency status
• Wealthy individuals shifting residency to other jurisdictions alongside major income events
• Individuals and companies moving tax residency before or during restructures or asset disposals
• Unpaid taxes when entities cease being Australian residents
• Non-lodgment of the IDS where required

That second one is the archetype. Relocate, then sell. If your timeline has a departure date and a sale date sitting close together, work on the assumption that somebody will look.

The most on-point alert is TA 2021/2, on disguising undeclared foreign income as gifts or loans from related overseas entities. It nominates s 6-5, Part X, s 47A, Division 7A, s 99B, s 8-1, Part IVA and the promoter penalty rules, with penalties up to 75% of the shortfall and possible criminal sanctions.

Promoter penalties: aimed at the seller, useful to you as a filter

Division 290 of Schedule 1 to the TAA 1953 targets entities that market or encourage a tax exploitation scheme, meaning one where the sole or dominant purpose was a scheme benefit that isn't reasonably arguable at law. Maximum civil penalties since 1 July 2024 are, for a body corporate, the greater of 50,000 penalty units, three times the benefits received, or 10% of aggregated turnover capped at 2.5 million penalty units. The limitation period went from four years to six.

Vetting the adviser

You're not buying a structure. You're buying two opinions that have to agree with each other, from people who carry professional indemnity cover and are registered to give them.

The twelve questions

Anyone who can't answer all of these on the spot is selling you a structure, not advice.

1. Are you a registered Australian tax agent or an Australian legal practitioner? What's your registration number?
2. Who signs the advice, and what professional indemnity cover sits behind it?
3. Where will the directors physically be when the big decisions get made, and how will that be evidenced?
4. Show me the active income test calculation. What's the projected tainted income ratio, and what share of revenue comes from Australian residents?
5. Which UAE entity type and free zone, and does my income meet the Qualifying Income definition, activity by activity, under Ministerial Decision 229 of 2025?
6. What's my Small Business Relief position for the period ending 31 December 2026, and what happens in FY2027?
7. Is the foundation a trust or a company for Australian purposes? Are we getting a private ruling? If not, why not?
8. What's my CGT event I1 exposure at departure, and do you recommend electing to defer? Show me both, including the 1 July 2027 changes.
9. What happens to my SMSF?
10. What's the plan to get money into my hands, and what's the all-in effective rate on that path?
11. Has this been assessed against Part IVA and the promoter penalty rules, in writing?
12. Total setup and annual running cost, all entities, both countries, all filings, for three years.

Glossary

What I don't know

Everything above is sourced. This is the part that isn't. Confirm any of these directly before you rely on them, and be suspicious of anyone who states them with more confidence than this.

Sources

Australia, primary

• TR 2023/1, residency of individuals
• TR 2018/5 and PCG 2018/9, central management and control
• CFC measures and the active income test
• Listed countries for CFC purposes
• Transferor trust measures
• PCG 2024/3, section 99B compliance approach
• s 104-160 and s 104-165, CGT event I1 and the election
• ATO on the 2027 CGT and negative gearing changes
• ATO: what attracts our attention, international
• Promoter penalty laws and s 177D
• Division 7A loans and the benchmark rate
• SMSF Australian superannuation fund test
• Treasury: Australia's income tax treaties, no UAE on it
• ATO: Common Reporting Standard
• Corporations Act s 201A, resident director requirement

UAE, primary

• Corporate Tax Law, consolidated to January 2026
• Ministerial Decision 229 of 2025, Qualifying and Excluded Activities
• Cabinet Decision 55 of 2023, Qualifying Income
• Ministerial Decision 73 of 2023, Small Business Relief
• Ministerial Decision 84 of 2025, audited financial statements
• Ministerial Decision 97 of 2023, transfer pricing documentation
• MoF: Economic Substance Regulations cancelled
• FTA: tax residency certificate requirements
• DLD: company registration, sale registration, gift registration
• RAK ICC Foundations Regulations, consolidated 2025
• ADGM Foundations Regulations 2017
• FTA Family Foundations Corporate Tax Guide, May 2025

Commentary I leaned on

• PwC Middle East on the Free Zone Persons Guide and MD 84 of 2025
• KPMG on Dubai Executive Council Resolution 11 of 2025
• Boodle Hatfield and Burges Salmon on foundation characterisation
• Morgan Lewis and DLA Piper on DIFC Prescribed Companies
• Allens on FCT v Bendel [2026] HCA 18
• PwC Australia on the 2026-27 CGT reform
• PwC on Harding v FCT