Dubai, known for its luxurious lifestyle and booming economy, has emerged as a hotspot for cryptocurrency investors. In this guide, we’ll walk through Dubai’s crypto tax policies and break down what you should know about the city before you consider a move!
Is Dubai Crypto Friendly?
In recent years, crypto investors and crypto companies have moved to Dubai due to friendly tax policies and clear regulations.
- Tax Benefits: Dubai offers significant tax advantages for cryptocurrency investors. The city imposes zero percent personal income tax and capital gains tax, which extends to gains from cryptocurrency disposals, staking, and mining for individuals.
- Regulatory Environment: In the United States, crypto companies are subject to unclear regulations. Meanwhile, Dubai has set up what CoinDesk calls a ‘progressive and responsive’ digital assets regime with clear rules and guidance.
Why Do Crypto People Move to Dubai?
Besides favorable tax policies, Dubai is considered a booming city that offers low crime rates and an exceptional lifestyle.
Tax-Free Gains: Dubai’s 0% capital gains tax can help wealthy investors save significant portions of their profits. In contrast, wealthy crypto traders may be required to pay up to 37% tax on their short-term capital gains in the United States.
Remember, you are required to spend at least 183 days of the year in Dubai to be considered a ‘tax resident’.
Lifestyle and Infrastructure: Dubai's high standard of living, combined with its state-of-the-art infrastructure, makes it an attractive destination for high-net-worth individuals and digital nomads.
How Can I Move to Dubai?
To stay in Dubai long-term, you’ll need to obtain a Visa — which in most cases, are granted when foreigners work for a company registered in Dubai. Types of Visas include:
- Employment Visa: If you work at a company registered in Dubai in the private sector or a free zone, you may qualify for an Employment Visa.
- Remote Work Visa: Foreigners who work remotely and earn a monthly income of at least 3,500 USD a month may qualify for a Remote Work Visa.
- Property Owner Visa: Foreigners who own property equal to or more than AED 750,000 may qualify for a Property Owner Visa.
- Golden Visa: There are several ways to qualify for a Golden Visa — including investing 2 million AED in an investment fund credited in the UAE or being a ‘specialized talent’. Examples of specialized talent include doctors, scientists, athletes, and ‘creative people of culture and art’.
What Should I Know Before Moving to Dubai?
Here are a few things you should keep in mind before you move to Dubai.
- Cultural Adaptation: Dubai's culture is deeply rooted in Islamic traditions. It's important to respect local customs, especially regarding public behavior and dress codes.
- Weather: Be prepared for the hot climate. In the summer months, Dubai can reach temperatures up to 113 °F (45°C).
- Lifestyle: Dubai offers a blend of outdoor and luxury activities, making it an exciting place to live and work. Popular attractions include the Burj Khalifa, the world’s tallest skyscraper, and the Dubai Mall, the world’s largest shopping mall.
Do I have to pay American taxes in Dubai?
If you’re an American citizen, you may be required to pay American income and capital gains tax — even if you spend the entire year in Dubai. America is one of just two countries who taxes overseas income for citizens.
If you find yourself in this situation, you may be able to reduce your taxes using the foreign earned income exclusion for income earned in Dubai.
Where Else Do Crypto Millionaires Live?
Remember, Dubai isn’t the only tax haven for crypto investors.
Other tax-friendly jurisdictions for crypto investors include the United Arab Emirates, Singapore, and certain Caribbean islands, each offering unique lifestyle and financial benefits.
One popular tax haven for US-based investors is Puerto Rico. Because Puerto Rico is a territory of the United States, investors are not taxed on overseas income.
For more information, check out our guide to the best countries for crypto tax.
Frequently asked questions
Let’s cap things off by answering some frequently asked questions about cryptocurrency taxes.
Which country has no tax on cryptocurrency?
Is cryptocurrency legal in Dubai?
How do I buy Bitcoin in Dubai?
Is Dubai a tax haven?
