Crypto Tax-Friendly Countries: Moving to Dubai

It is commonly said that there are two things we can be certain of in life and that’s death and taxes. But what if that wasn’t necessarily true? No, unfortunately, I’m not here to teach you the secret of eternal life and immortality but I can tell you that taxes don’t always have to be a certainty. Not all countries' tax rules are the same and many countries offer favourable tax breaks or no taxes at all on your crypto gains.

‘In this world, nothing can be said to be certain, except death and taxes.’

It’s no secret that taxes are hated by crypto traders. The current regulation and rules that are used were created for traditional finance and unfortunately, don’t cater well to the new cryptocurrency assets. As such, figuring out what is taxable and how much tax is due has become a tiresome and tedious annual event. This is often exacerbated by the fact that the current generation of accountants have very little experience with crypto tax laws. 

Unsurprisingly, when I explained that my NFT Paladin from DeFi Kingdoms in GameFi yielded £500 from mining quests in the latter half of the tax year, my accountant looked at me blankly. I added further that these funds were then lost due to the horizon bridge hack on the Harmony blockchain which the community had tracked and found the culprit to be the Lazarus Group, a North Korean hacker group. Predictably, the 52-year-old accountant from backwoods England looked a little confused.

Not only are the current tax laws unsuitable for the new cryptocurrency asset class, but the people in charge of changing the laws are also unfit to draft new laws. After all, it’s unreasonable to expect the average government employee to understand the tax implications of impermanent loss on a volatile LP position or why ETH gas fees should be considered a cost and thus tax deductible.

Because of this, some people have decided the best approach is to simply move to another country that has more favourable tax laws and continue their Web 3.0 journey elsewhere. This article will discuss moving to the crypto-tax-friendly country of the United Arab Emirates (UAE), more specifically Dubai and discuss the pros and cons and what to expect from the up-and-coming luxury city.

Note that this article is about my personal experience with moving to Dubai and is in no way intended as a guide or advice. I recommend reaching out to a relocation specialist like Offshore Citizen to help answer any questions related to relocating.

Moving to Dubai: What You Need to Know

Moving to any new country is an intimidating prospect. Not only do you have to try and fit all of your life into a 30kg suitcase, but you also need to navigate visas, accommodation, transport, finding a new job and making new friends. 

Despite these sounding like the difficult parts of moving to a new country, they’re actually just the essentials that are required in the short term. The long-term game is where things get difficult as you need to adjust to a new culture, make new friends and continue your hobbies or make new ones in a new country. This is essential because otherwise your quality of life suffers and your new-found adventure will soon turn sour and the thoughts of home and longing for familiarity can often make some people feel homesick.

I see this as an often-overlooked aspect of acclimatising to a new country, typically people's first concerns are a visa, a job and a place to live. Speaking from experience, if you’re a proactive and motivated person, these key problems can be solved quite quickly. The biggest challenge is feeling at home in another country and living harmoniously within that community. This article will attempt to navigate some of those more nuanced issues and detail some of the exciting things that Dubai has to offer as well as provide some key info to navigate a different culture.

Overcoming Three Immediate Problems

In a perfect scenario, it would be best to try and find a job in Dubai before you move out there. Not only would this solve the obvious problem of having a source of income to pay your rent, bills and food etc. it would crucially provide you with a work visa which you can use to get an Emirates ID; a requirement to rent a property. 

Visas in Dubai last two years and they’re not the easiest things to attain or renew. As Dubai doesn’t have income tax or capital gains tax (great for crypto) it has to fund the government through other means and one of those ways is through visas which can be costly for businesses.

Permanent residency via a passport is not achievable for non-native UAE citizens as the only permanent residents in Dubai are Emiratis, who are more casually known as "the locals". As such, if you want to live in the UAE you will need to be sponsored by the company you work for and in turn they are required to issue you with a work visa for your job and specific job sector.

Your visa is very important in Dubai as you will need it to obtain your Emirates ID. Your Emirates ID card is a UAE Government-issued identity card for UAE citizens and residents. It is mandatory for all UAE citizens and residents and you will need it for a lot of the important things in Dubai such as opening a bank account and renting a property.

To rent a property in Dubai you are required to complete an ‘Ejari’ which is a series of legally binding documents which include copies of your Emirates ID and work visa that you and your landlord must complete in order to obtain an Ejari certificate. The Ejari certificate is a legally binding contract between you (the tenant) and your landlord and serves as a form of protection for you as the tenant, the landlord and the landlord’s property. 

Although the Ejari can be quite a lot of work to complete for both parties involved, it’s a useful piece of legal documentation to make sure everyone plays by the rules and that there are no grey areas in terms of what both parties expect from one another.

If you are interested in Guy's take, he put together this great video on the Top Tax-Free Jurisdictions and talks about Dubai from personal experience:

What To Do If You Can’t Find a Job Before Moving to Dubai

Herein lies the problem as it’s essentially a chicken and egg dilemma. The easiest way to get a job in Dubai is by living in Dubai, networking with people and meeting them face-to-face for job interviews. In fact, from my personal experience, if you can’t meet up in one of the malls for a chat/consultation/interview it’s actually challenging to get your foot in the door and be considered for a job. How you conduct yourself, your ability to hold a conversation properly and speaking intelligently on your subject matter go a long way.

So, if I can’t rent a property without a visa and I can only get a visa by having a job, what am I supposed to do? Thankfully, there is a solution to this problem as Dubai offers tourist visas upon arrival for most countries which are free of charge and last up to 30 days. 

My recommendation would be to treat the journey as an extended working holiday, rent a property using Airbnb and hire a car. Car hire is not expensive in Dubai and hiring a car to explore the local area will give you an understanding of what it would be like to actually live there and experience the day-to-day lifestyle. It’s all too easy to view Dubai through rose-tinted spectacles if you’re on holiday for 7 days staying in a 5-star hotel on The Palm, taking taxis everywhere and only eating in restaurants in Madinat Jumeriah. 

Hiring a car will also allow you to meet your potential employer anywhere that’s convenient for them which will help make a good first impression.

I’ve Secured a Job, What’s Next?

Now you have your job and your working visa you can decide on your accommodation. Your budget and where your work is situated will largely dictate where you would like to live but thankfully Dubai is a relatively small city spread along the coast, so you’re never far from the main business/tourist areas. 

It’s possible to drive from the southern point of the coast to the top area of the city in Business Bay and Downtown in as little as 30 mins by car via the main highway Sheikh Zayed Road and the drive is essentially a straight line, making navigation easy. The highway is as big as 8 lanes in some places which allows for seamless travel through the heart of Dubai with landmarks and towers on either side of the highway. 

Keep a lookout for tourist hotspots such as the Burj Al Arab, often referred to as ‘the sail’ and the Burj Khalifa, the tallest building in the world Downtown. As with any big city, there is always rush hour traffic and Dubai is prone to car accidents so long delays can happen, having a quick check on google maps might be worthwhile as there are numerous routes available to travel through and around the city.

Despite Dubai being a luxurious and extravagant city, it has a surprisingly wide range of accommodation available from the obviously very expensive high-end range such as penthouses to the much more affordable lower end of the range with studio apartments. What’s great about Dubai is even the lower end of the range accommodation is very nice, clean and of a good standard. Most apartment complexes will have a small gym, which is free to use and many have small swimming pools, so you really do get good value for money. 

My main piece of advice is although it might be tempting to live in one of the classic, fancy tourist areas such as The Dubai Marina, Jumeriah Beach Residence (JBR), The Palm or Downtown, don’t be afraid to venture further afield. Accommodation outside of the main areas further inland are often overlooked and are great value for money. Dubai Motor City, Dubai Sports City or Town Square Park are an example of some of these areas and others like it are much cheaper and aren’t as busy at peak times which is often favourable for working life. Just expect a slightly longer commute with a small 10-minute drive inland as they’re further from the coast and main working/business areas.

The standard of living in Dubai is very high with low crime rates, great infrastructure, amazing places to visit and great health care. The medical care that you receive in Dubai is exemplary and very competitive because private medical care is big business. Medical care in Dubai is private and very expensive if you’re not insured, but thankfully, it is a legal requirement for your employer to provide you with medical insurance. 

Upon reviewing your employment contract it’s worth taking the time to double check your medical insurance is up to scratch, but typically your medical insurance will be in-line with your salary, so if your salary is reasonably high then your medical insurance will match that. 

Dubai is probably the safest place I have ever visited/lived in and I have been to many different countries across the world. This isn’t very well reported and you can see the bias for European or Asian countries in a lot of online articles, but coming from someone who lived in Dubai for 5 ½ years I can tell you with absolute certainty that it really is one of the safest places in the world. 

Every mall and apartment building has a security team and there are surveillance cameras on every corner. If you’re visiting a friend in an apartment building you must sign in to the guest book/clipboard and show them your Emirates ID before you’re allowed access to the lifts and in some apartment buildings, you need security to scan their access card for you to use the lift. 

One of the main reasons Dubai is so safe is because the repercussions for committing a crime are so severe. Unless you’re a local, if you commit a serious crime, you will not only be deported, visa cancelled and banned from entry again, but you’ll also be fined and must serve a prison sentence before they deport you. 

To put it simply, it isn’t worth the risk of committing a crime in Dubai, it’s more fruitful to simply work hard and save your money, something which Dubai is great for because the salaries are generous and there’s no income or capital gains tax. Saving is made even easier as expenses can be cheap provided you use common sense and know where and how to shop frugally.

A cost-of-living comparison doesn’t work very well with other countries because you get so much more for what you pay for in Dubai. As mentioned previously, apartment complexes will have a security team and gym as standard and some will have a swimming pool + sunbathing area. Your apartment typically comes with a basement car parking space, which is very useful for the summer months when the weather can reach temperatures of up to 45 degrees Celsius or 113 degrees Fahrenheit. 

In summary, Dubai accommodation is not cheap compared to other countries but you do get a lot for your money and there are always cheaper options available if you’re willing to live outside of the tourist hotspots.

Some great sites to use when looking for a property are:

• Bayut 
• Dubizzle 
• Property Finder

Navigating Dubai Culture & Language Barriers

If you are moving to Dubai from a Western country as I did, you should prepare yourself for some cultural changes as there are some big differences that you will need to adapt to. Dubai is a part of the United Arab Emirates (UAE) and the local religion is Islam. Unlike many Western countries, where religion is often in the background of daily life, for Dubai, it is right at the centre of its day-to-day life and at the heart of decision-making, acceptable behaviour and culture.

If you’re planning on moving to Dubai, it’s advisable to do some research on what is and isn’t acceptable behaviour. After all, if you’re going to assimilate into the cultural fabric of Dubai and enjoy it for all it can offer then you need to be on the same page as everybody else.

Here are the top 5 rules for making sure you don’t accidentally get yourself in trouble when moving to Dubai.

1. Control Yourself and be Respectful When Drinking Alcohol

Contrary to what many people think, drinking alcohol in Dubai is not illegal but that doesn’t mean to say there aren’t rules that you must adhere to. As with any country, you should always treat everyone with respect and conduct yourself in an appropriate manner. Drinking alcohol is prohibited in the Islamic religion, as such, it’s only legal to drink alcohol for non-Muslims in licensed premises such as bars, restaurants and at home provided you have an alcohol license. It’s easy to obtain an alcohol license, you’ll just need your Emirates ID and pay the annual charge of 270 Dirhams, about $73.

2. Keep Calm and Don’t Road Rage

Dubai is a busy and bustling city full of people with fast cars and places to be. Everyone is trying to get to their destination and the combination of traffic, congestion, and tourists who aren’t sure where they’re going can often lead to disagreements about who should or shouldn’t be doing what and who is or isn’t in the wrong. In Dubai, road rage incidents can lead to fines or imprisonment, so it’s important to keep your feelings to yourself as shouting or swearing at other drivers is prohibited and will not be tolerated under law.

3. Zero Drugs

Like most other countries, the buying, selling, or taking of drugs is a criminal offence and is strictly prohibited under any circumstances with severe penalties. Do not attempt to bring drugs into the country under any circumstances and do not take any drugs whilst living in Dubai. Pretty simple. 

4. Do Not Take Photos of People in Public Without Their Permission

Do not take photos of people in public places, especially women and children without obtaining their permission and rather obviously, don’t take pictures of military areas, courts, palaces, embassies and other sensitive locations. Just use your common sense on this one.

5. No Public Displays of Affection

According to the ‘Dubai Code of Conduct' published in 2009 by the Executive Council of the Government of Dubai:

 ‘Displays of affection among couples – whether married or not – in public places does not fit the local customs and culture. Holding hands for a married couple is tolerated but kissing and petting are considered an offence to public decency. Public displays of affection, as well as sexual harassment or randomly addressing women in public places, are liable to be punished by imprisonment or deportation’.

These rules may be considered strict for some people so if you’re unhappy with them or don’t feel like you can abide by them then Dubai simply might not be for you. Having lived there for 5 and ½ years, I can tell you they are simply guidelines that have been put in place to ensure that the cultural traditions are respected, which makes perfect sense to me.

As for language barriers, you would be hard-pressed to find a common language that isn’t spoken in Dubai as it’s a melting pot of multiple cultures. The official language of Dubai is Arabic and virtually everyone speaks English. The other most commonly used languages throughout the UAE are Urdu, Malayalam and Hindi due to the large populations of Indian and Pakistani peoples.

Weather and Lifestyle

If sunning yourself on the beach, partying on a boat or sampling numerous cultures' cuisines at an all-you-can-eat brunch is your thing then you will absolutely love Dubai. For those of you who want to eat great food and party, Dubai offers arguably the best brunches in the world. The stunning scenery, warm weather and generous food and drink choices made brunching a common pastime for me and my friends. Brunches usually run from 12-4 pm and depending on the package, cost 500 dirhams ($136) with unlimited food and drink within the four-hour window.

If you’re feeling more adventurous, you could rent a jet ski for the day or even hire a boat to party on with friends. It’s actually very easy and cheap to hire a boat and the captain and crew will take you out through the Dubai Marina and anchor just offshore near JBR beach, barasti and zero gravity. Interestingly, the first time I learned how to do a backflip was off the top of the boat but this is not advised! The most cost-effective way to hire a boat is to take as many people as possible to split the cost.

Although going to the beach, boat parties and brunches are obviously a lot of fun, sometimes after a long week at work it’s the last thing you want to be doing at the weekend. This is where Dubai really comes into its own and surprised me. I’m from the UK countryside, so I’m naturally a big fan of the outdoors and I love hiking so when I decided to move to a city in the middle of a desert with no trees or rivers, I was unsurprisingly in for a shock.

After the initial excitement of the brunches and boats wore off, I was craving the outdoors. I never considered a barren desert just outside Dubai as a fix for my outdoor countryside cravings but I could not have been more wrong. There are so many beautiful places both in Dubai and in the surrounding Emirates such as Ras Al Khaimah and Sharjah that are within a few hour's drive from central Dubai which you can travel to and from freely. 

One of my favourite spots to go hiking was Showka Dam, which has multiple loops of different difficulties and lengths. You can go for a scenic stroll or a full-on hike across the mountains which overlook the small lake for which the dam was built; anywhere from 1 hour to 5 hours of walking is available. I would also recommend mountain biking in the Hatta region of Dubai and if you fancied a challenge you could consider the Hatta Hills Run in March with 21, 10, and 5km runs available. I’ve run the 10km route twice and stayed at the JA Hatta Fort Hotel afterwards, I would highly recommend it and it’s a great way to spend the weekend.

If all of that wasn’t enough to get you excited for some outdoor activities in Dubai then perhaps you would prefer a more laid-back approach. Take your car out to Al Qudra desert, just 45 minutes outside of Dubai centre, grab some matches and firewood from the local fuel station, take a stroll into the dunes and find a place to light a fire and make camp. Watching the large groups of local Emirati families arrive in their Nissan Patrols to set up their camp with picnic blankets and homecooked food provides a wholesome family-friendly feeling that I’ve not experienced in other cultures and it’s an experience I will forever be thankful for.

It’s safest to build your camp and fire on the top of a dune where people can easily see you as many 4x4 enthusiasts like to drive around the dunes. To be safe, make sure you’re not hidden in a ditch with no lights and look around for nearby off-roaders before you make camp to try and stay out of the way of their off-road route.

One of the drawbacks of being able to enjoy the Arabian nights on the dunes is, of course, the climate. Dubai is built on the coast but surrounded by desert. It does rain in Dubai in the winter months which lasts from December to February, but some years there’s only mild rain or none at all. The mountainous regions do experience more rainfall and that is noticeable in its fluvial landscapes and increased level of vegetation and wildlife, but for most of the year Dubai is hot and I mean, HOT.

The temperatures in the summer months can become unbearable as they can reach as high as 50 degrees Celsius, 122 Fahrenheit. Thankfully, Dubai is very well equipped to handle the heat as nearly everything has very powerful and efficient air conditioning including sealed and air-conditioned bus stops. That being said, the humidity from the sea does make for an unpleasant outdoor experience between the months of mid-May to mid-November so most expats living in Dubai use it as a chance to go home and the locals will take holidays to cooler climates.

The winter months are a very different picture. October until arguably mid-May will see much lower temperatures and can reach as low as 18 degree Celsius or 64 Fahrenheit, especially on a cold foggy winter morning on kite beach (the best time and place for running. You’re welcome). Dubai is the perfect place to be in the winter months as tourism is booming and outdoor activities, events, and festivals are in abundance such as The Dubai Fitness Challenge, which takes place every year and runs from 28th October to the 26th November. 

The appropriately named 30x30 challenge was created by Sheikh Hamdan and takes place across all of Dubai with its headquarters on Kite Beach. The Dubai Fitness Challenge provides free classes and constant fitness motivation for 30 days to encourage Dubai residents to get fit whilst the cooler temperatures are around.

In summary, it is said there’s no better place to be in winter and no worse place to be in summer than in Dubai and I would have to agree.

Crypto Tax in Dubai

Dubai has all this fancy and extravagant stuff with brunches, boat parties, nice housing and good infrastructure, so surely taxes are through to the roof to pay for all this, right?

Actually, no. As it currently stands there is zero, yes zero, tax on cryptocurrency in Dubai. There is no income tax, no tax on staking and no capital gains tax, so it is not surprising that crypto traders, businesses and influencers have been moving over there in droves.

As we covered earlier, not only is paying tax in most countries a very difficult procedure due to outdated laws and regulations, but it is also very costly.

Something to consider when calculating how much tax you’re paying each year is how it adds up over time. Let me explain. If you’re interested in crypto, taxes, and finance, I’m sure you’ve heard of compound interest and the powerful advantages that compounding interest can do for your finances. Well, every time you pay your tax each year, that’s money you’re losing that can’t be used for reinvesting to benefit from compound interest. 

You see, there’s an opportunity cost to not reinvesting that tax money and compounding it, and it really starts to add up over time; we’ll run through some basic hypotheticals to demonstrate this later. You probably haven’t taken this into consideration yet when moving and if you’re on the fence about whether or not to go, this might just sway your decision.

Below is a basic example of how the money you could save from not paying taxes over time adds up to be a large figure over just a 5-year period.

For this example, we’ll use 20% income tax on a salary of $40,000, which equates to $8,000 a year or $666.6/month in taxes.

Rather than pay these $666.6/month in taxes, what if we could reinvest them into a very boring and low-rate savings account at 4%, compounding every year?

Let’s take a look using TheCalculatorSite.

As we can see from the table above the results are quite shocking. At the end of a 5-year period in total you would have an additional total amount of $44,194.90 of which $39,996.00 is money saved from not paying taxes and $4,198.90 is the amount in accrued interest.

These are conservative calculations using a modest salary, reasonable tax deductions and only earning 4% annual interest. To put that into perspective, if we look at the returns for the S&P 500 for the years 1992 to 2021, the average stock market return for the last 30 years is 9.89% (7.31% when adjusted for inflation).

Conclusion

With all these considerations I’m sure you can appreciate that the decision to move to Dubai is multi-faceted. From this article, you’ve hopefully gained an understanding of what living in Dubai is all about and can use this as a guide to help make a more informed decision.

I enjoyed my time in Dubai immensely and I achieved my goal of saving enough money for a down payment on a house back in the UK. Overall, I benefitted greatly from the financial freedom that zero tax provided me and after 5 years the gradual tax savings really added up, especially during the crypto 2021 bull run.

If you are planning to depart your home country and want to take care of your taxes beforehand, or if Dubai doesn't sound like the place for you, you may find these two articles helpful:

• Crypto Tax Tools: Software to Help Make Crypto Taxes Easy
• Top Tax-Free Jurisdictions in the World

As with any choice, there are always advantages and disadvantages to moving your whole life to a new location. If you want to experience something truly different and immerse yourself in Arab culture then Dubai is the perfect place to go.