How To Live Tax Free and Travel the World?

Table of Contents
Introduction

In today’s interconnected world, running a business entirely online is more feasible than ever. This flexibility allows entrepreneurs to operate from anywhere in the world. If you can provide your services remotely, why remain in a high-tax jurisdiction like the UK, Canada, or most European countries where corporate taxes can exceed 20% and personal income taxes can climb as high as 50%? At that rate, you could be working for the government for half of the year. It’s time to consider optimizing your tax situation to keep more of your hard-earned money.

We specialize in helping people set up companies in Dubai, obtain residency visas, open bank accounts, and achieve personal tax residency to start paying no taxes at all. In this article, We’ll provide a step-by-step plan to help you minimize your taxes, work from anywhere, and expand your business.

Step 1: Becoming a Non-Resident of Your High-Tax Country

The first step in optimizing your tax situation is to become a non-resident of your high-tax country. This essentially means exiting your home country or the high-tax jurisdiction where you currently reside. The general rules for becoming a non-resident include:

  • Physical Presence: Ensure you are not physically present in your home country for more than 183 days per year.
  • Cutting Ties: This might involve selling real estate, moving your family or dependents, closing bank accounts, and discontinuing healthcare services in your home country. Specific requirements can vary depending on your country of origin.

 

Physical Presence

To effectively become a non-resident, your physical presence in your home country must be limited. The 183-day rule is a common threshold used by many countries. If you spend more than half of the year in your home country, you are generally considered a tax resident. Thus, you need to carefully track your time spent within your home country.

Cutting Ties

Cutting ties with your home country is crucial. This process can include:

  • Selling Real Estate: Owning property can be a significant tie to your home country. Consider selling or renting out any real estate you own.
  • Relocating Family: If you have dependents, relocating them is often necessary to demonstrate that you no longer maintain a significant presence in your home country.
  • Closing Bank Accounts: Close or significantly reduce activity in your home country bank accounts.
  • Healthcare Services: Discontinue any healthcare services tied to your home country, opting for international health insurance instead.

By taking these steps, you demonstrate your intention to reside elsewhere, reinforcing your non-resident status.

Step 2: Establishing Residency in a Low-Tax Jurisdiction

After exiting your high-tax country, the next step is to establish residency in a low-tax jurisdiction. Dubai, in the United Arab Emirates (UAE), is an excellent choice due to its favorable tax policies. Dubai offers 0% personal income taxes and 9% or 0% corporate income taxes, depending on your company’s situation.

Setting Up a Company in Dubai

Setting up a company in Dubai is straightforward and offers numerous benefits. By establishing a company in Dubai, you can obtain a residency visa and sponsor yourself to live in Dubai. This process involves:

  • Company Formation: Choose the appropriate company structure and complete the necessary registration processes.
  • Residency Visa: Once your company is set up, apply for a residency visa under your company’s sponsorship.
  • Bank Accounts: Open business and personal bank accounts in Dubai to manage your finances effectively.

Dubai’s business-friendly environment and strategic location make it an ideal base for your operations.

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Step 3: Becoming a Tax Resident of Your New Jurisdiction

To fully benefit from Dubai’s tax policies, you need to become a tax resident of the UAE. This involves obtaining a Tax Residency Certificate (TRC), which requires:

  • Physical Presence: Spend at least 90 days per year in Dubai.
  • Documentary Evidence: Provide proof of your physical presence, such as utility bills, tenancy contracts, and travel records.

By meeting these requirements, you officially become a tax resident of Dubai, allowing you to enjoy the UAE’s tax benefits.

Step 4: Operating Your Business Globally

With your new tax residency in place, you can operate your business globally with significant tax savings. Here’s how:

Providing Services Internationally

As a Dubai-based company, you can provide services to clients anywhere in the world. The beauty of this arrangement is that you don’t need a physical office or significant presence in Dubai to operate your business. Your company can be entirely virtual, allowing you to manage operations from anywhere.

Maintaining Tax Residency

To maintain your tax residency status in Dubai, ensure you meet the 90-day physical presence requirement each year. During the remaining months, you are free to travel or reside in other countries, provided you do not trigger tax residency requirements elsewhere. This flexibility is particularly appealing for digital nomads and entrepreneurs who prefer a nomadic lifestyle.

Step 5: Living the Nomadic Entrepreneurial Lifestyle

Dubai’s summer temperatures can be quite extreme, leading many expatriates to seek cooler climates during these months. Here’s how to manage your time effectively:

Seasonal Living

Winter in Dubai: Spend 8 to 9 months of the year in Dubai, enjoying its mild winter climate.

Summer Travel: For the remaining 3 to 4 months, travel to other countries or establish a secondary base in a cooler climate.

This approach allows you to meet Dubai’s residency requirements while enjoying diverse living experiences around the world.

 

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Benefits of This Tax Optimization Strategy

Implementing this tax optimization strategy offers several significant benefits:

Tax Savings

  • Zero Personal Income Tax: Enjoy 0% personal income tax in Dubai.
  • Low Corporate Tax: Pay only up to 9% in corporate taxes, depending on your company’s structure and income.
  • Retain Earnings: Keep more of your business profits and personal earnings, allowing you to reinvest in your business and personal growth.

Global Mobility

  • Travel Freedom: As a Dubai resident, you have the flexibility to travel and live in different countries throughout the year.
  • Business Opportunities: Access a global network of clients and business opportunities without being tied to one location.

Quality of Life

  • Modern Infrastructure: Dubai offers world-class infrastructure, healthcare, and education.
  • Safety and Security: Enjoy a safe and secure environment for you and your family.
  • Lifestyle Options: Experience a luxurious lifestyle with access to top-tier amenities and leisure activities.
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Conclusion

If you’re running a business completely online and can provide your services from anywhere, optimizing your tax situation is a smart move. Why continue living in high-tax jurisdictions when you can legally reduce your tax burden and enjoy greater financial freedom? By following this step-by-step plan, you can eliminate high taxes from your company and personal life, live and work from anywhere in the world, and even expand your business.

At Genzone, we specialize in helping entrepreneurs set up companies in Dubai, obtain residency visas, open bank accounts, and achieve personal tax residency. If you’re ready to take control of your financial future, book a call with us today, and let’s get started on your journey to tax optimization and global freedom.

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