The new 9% tax in Dubai and the UAE has everybody scared as it may look like a bait and switch tactic. Come to Dubai, zero tax, but now you need to pay your 9%. This applies to free zone companies, mainland companies or anybody making any business income. But what about crypto, capital gains, stocks or precious metals? How do you still pay zero tax legally? This blog will focus specifically on crypto but do take note that it does not serve as tax advice.

Crypto and Tax in the UAE: What’s the Situation?

What’s important to differentiate is swing trading, buying and holding, investing in crypto, versus having a crypto business. If you buy Bitcoin and you sell it after a couple of days, or couple of weeks, or if you buy and hold, even if it is for years, crypto is still not taxable legally in the UAE.

So, if you buy Bitcoin at 50,000 and it goes to 100,000, that 50K profit is still at 0% tax. If you currently live in a country that requires you to pay a tax of 30% and upwards, you can move to the UAE and pay 0% on your crypto earnings. But of course there is a process behind it, you’d have to set up your company and give yourself employment under that company. The whole process will take over a month as you’d have to get your Emirates ID, set up a bank account and obtain your tax residency.

Trading vs. Holding: Tax-Free Crypto Gains in the UAE

Now, if you have a business related to crypto, like high-frequency trading or bot trading where you do 20 to 30 trades per day, even if it’s in your personal account, that could be considered a one-person business and that would be subject to the 9% tax.

If you’re a buyer and holder who sells after a few days to a few weeks, you do not need to worry. Regardless of how you obtain residency, whether you start a company just to secure a visa or invest $550,000 in property to get a 10-year golden visa, you will be covered. You can cash out your crypto to buy more property, luxury cars, or even convert it to cash through local banks. As long as it’s seen as an investment into crypto, there won’t be any tax implications.

When Does Crypto Business Income Become Taxable?

If you make a business income, there are ways to reduce your tax through certain exemptions. For every free zone company, your first 100K US of profits will be 0% tax. So let’s say you have 500K in revenue, 400K expenses, 100K profit. You’ll pay 0% tax.

Corporate Tax Exemptions for Free Zone Companies

Now, you will still have to register for corporation tax, and you will still have to submit a tax return and have proper accounting records. But you will pay 0% tax. Anything above that, you’ll pay 9% on the extra. So it’s not like you’re paying 9% on all of it. You’ll just pay 9% on the extra. That’s the main or the first exemption.

Understanding Small Business Relief for Corporate Tax

The second is what’s called small business relief. In order to help companies with the transition from no corporate tax to corporate tax, they’ve given companies with revenue under the equivalent of about 816K US, if you have revenue under 816K US per year, then you qualify as a small business under the small business relief.

Now, what that means is that regardless of what your profit is, whether that’s 200, 300, 400K, you will pay 0% tax because you qualify for this relief. This is only valid until the end of December 2026, but it does mean if you’ve got profits over 100K, in the interim, there’s a bit of a buffer for you to figure out if you want to stay in Dubai or potentially structure and go from there.

Why Relocate to Dubai Before Bitcoin Prices Skyrocket

Bitcoin recently hit $64,000. We’re seeing how powerful these institutional investors, ETF investors, and overall, the movement towards the crypto bull rush. So if you’re looking at huge crypto prices and you’re seeing a potential 200X, 1000X growth, don’t wait until you have that 1000X profit and you’re paying that tax to the UK, to Australia or wherever you are in the world.

Go to a place like UAE, move your residency legally, and then cash out here. As long as you become a tax non-resident in your origin country. When you leave that country, that’s when your taxes stop.

It’s not like you buy your crypto in your origin country, you wait for it to go up, and then you cash out in the UAE without paying that capital gains tax. No, you still need to pay that until the day when you leave your country.

Don’t wait until the high prices of 2025, 2026. Because then you will pay that capital gains tax or you will still pay that crypto tax. Go to a place like UAE if you’re a buyer and holder, a long-term investor, and cash out once the prices are super high at that 0% crypto tax rate.

Disclaimer: Stay Compliant with UAE Tax Laws

We do not advise anyone to try any tax evasion techniques or think, “Oh, the UAE is new at collecting tax. I can just avoid it.” The UAE has harsh penalties on any crime or loopholes so always ensure that you are staying compliant.

How can SetHub Help?

If you are a crypto investor or trader that seeks to move your operation to Dubai, SetHub can offer you some great advice if you are looking for that starting point. Our team has experience in setting up cryptocurrency related businesses, so we understand the questions and concerns you may have. We also have tax experts in our team who understand the nuances of Taxation in the UAE. We strive to ensure that every client stays compliant so that their business journey in Dubai moves forward without any red tape. Reach out to us now for some tailored advice!