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How Can Dubai Be Tax-Free, While the US and Europe Are Not? Can Income Taxes Remain at 0% Forever?

Dubai is located in the United Arab Emirates (UAE), a country in which 90% of the population is foreigners.

These foreigners do not pay any income taxes but also do not qualify for any benefits. There are no public schools for foreigners, there is no government healthcare, and there are no welfare benefits of any kind for them.


The minimal public services these foreigners receive (e.g., streets, sewage treatment, etc) are paid for through service charges of the buildings they live in. However, these fees are minimal.


For the UAE, gaining a foreigner is never an expense, as the country's current economic system does not allow foreigners to extract government resources of any kind. This is why the country is now the world's most open to international immigrants.


10% of the UAE's population is comprised of local nationals. These also do not pay income taxes but get lots of welfare and free services (e.g., free education, free health care, etc.).


This is paid for through the profits of the few government-owned businesses (usually in the oil and gas sector, and in telecommunications).


Abu Dhabi, the largest emirate in the UAE, for example, has built up so much in savings from the profits of their state-owned corporations that their sovereign wealth fund now holds savings of $1mill+ per national.


The dividends from these savings, managed by Abu Dhabi's sovereign wealth fund (the Abu Dhabi Investment Authority (ADIA)), are enough to pay for the benefits of locals even in case oil runs out or is not in demand anymore.


As a result, keeping the current 2-tier system of foreigners and locals, without any income taxes, is sustainable in the long term.



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Contrary to what many are saying, the UAE is financially very sustainable - definitely more so than most Western countries. No need for income taxes!


The US and most of Europe are very different.


The class of foreigners who don’t pay income taxes and do not receive free health care, welfare, or free education does not exist.


Everyone is part of the second group, having the right to get everything for free (or heavily subsidized). As a result, government expenditures are MUCH greater.


An additional problem is that Western countries, with the exception of Norway, do not have sovereign wealth funds of a large size, and therefore do not have investment incomes to pay for services.


The money has to come from elsewhere, namely very high taxes and debt.


High debt levels greatly reduce economic growth, as governments are now stuck with very high annual interest payments. Governments are paying interest, instead of spending money to build infrastructure.



Why Saudi Arabia is different


Places like Saudi Arabia and Oman are a bit different. Contrary to the UAE and Qatar, Saudi Arabia has roughly 30% foreigners and 70% locals. As a result, the country is much more at risk (and financially unstable) than the UAE and Qatar.



The UAE is the world's most attractive place to emigrate to


The UAE has now become the world’s number 1 place for tax-optimized investments and international relocation. In 2022 alone, around 4000 high-net-worth individuals relocated to the UAE, primarily to Dubai. High net-worth individuals are people with a net worth of at least $1mill.


At 4000 people, more high net-worth individuals are relocating to the UAE than the entire United States. Imagine that! The UAE has a population of just 9 million, while the US has a population of 330 million.


We support businesses and individuals alike in relocating to the UAE and investing here profitably. With a background in finance from the London School of Economics, I am here to develop effective and profitable strategies. Why not check out our services here:






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