Who This Structure Is Not For

This is not a sales page. We state plainly which profiles the Dubai structure does not serve, and which ones it actively harms. The reason is simple: a structure set up incorrectly costs more than one never set up at all. Once license renewal, accounting, corporate tax registration and filing, visa renewals and a possible Turkish tax audit stack up, the total lands well above the incorporation figure discussed at the outset.

The most common mistake we see in the field is that the decision is made against the wrong question. The right question is not "can I set up a company in Dubai." You can. The right question is this: given where my income comes from, where my clients are, where my family lives and how many days of the year I spend where, what does this structure gain me, and what obligation does it impose in return? Those two questions produce different answers.

In the seven profiles below, our answer is usually "no" or "not yet." We say this up front, because setting up a company that will be closed six months later serves no one. The assessments on this page are general; they do not constitute tax, legal or investment advice and are not an opinion tailored to an individual. The final assessment is made on your own file, together with licensed professionals in the relevant jurisdictions. The regulatory information on this page is current as of the date the text was updated; on both the Turkish and the UAE side, rules, rates and thresholds may change, so current confirmation is obtained on every file.

The scenario is clear: your home is in Bursa, your children go to school there, your spouse works there. You travel to Dubai for a week or two a year. You set up a free zone company, obtain a residence visa, and expect the picture to change. It does not. Under Income Tax Law (Gelir Vergisi Kanunu) art. 3 and art. 4, individuals domiciled in Türkiye and those who reside in Türkiye continuously for more than six months within a calendar year have full tax liability; their worldwide income is subject to declaration in Türkiye.

Nothing is automatic on the UAE side either. Cabinet Decision No. 85/2022 (effective March 1, 2023) sets out three routes to tax residency: 183 days of physical presence within any consecutive twelve-month period; 90 days within the same period plus UAE residency or citizenship or GCC citizenship plus a permanent place of residence or business in the UAE; or having one's usual place of residence and center of personal and financial interests in the UAE. A residence visa on its own satisfies none of these conditions. Because the application of this Decision may change, the assessment is made on the text in force at the time of application.

The second assumption people rely on is the double taxation treaty. Article 23 of the Türkiye-UAE treaty applies the credit method for Turkish residents, not the exemption method. Since there is no personal income tax in the UAE, the amount available for credit is zero. In other words, a person who remains a Turkish tax resident pays the Turkish tax on Dubai-sourced income in full. The sentence "thanks to the treaty I pay no tax" is wrong, and every plan built on that error collapses.

So what can be done? There are two honest options. The first is to set the structure up with no tax expectation at all, purely on commercial grounds: proximity to Gulf clients, multi-currency collections, regional partnerships, an international contracting base. The second is to genuinely decide to relocate and to implement that decision at the level of your calendar, your home and your family. There is a third option, no less valid than these: not setting it up for now.

The scenario: you provide software, design or consulting services. All of your clients are companies resident in Türkiye. Your plan is to invoice those same clients from the company you set up in Dubai. In practice nothing changes: you still run the work from your desk in Istanbul, still with the same team. Of all the arrangements, this is the most fragile and the hardest to defend.

The first risk is the place of effective management. Under Corporate Tax Law (Kurumlar Vergisi Kanunu) art. 3, entities whose legal seat or place of effective management is in Türkiye have full tax liability. If the company is in fact managed from Türkiye, not only your own income but the company as a whole may be treated as fully liable to tax in Türkiye. At that point the license, office and accounting fees paid in Dubai turn into pure cost, with no tax outcome in return.

The second risk is transfer pricing. If your Turkish company continues to operate and there is a related-party relationship between it and the Dubai company, the pricing between the two sides must be at arm's length and must be documented. A service fee that departs from the arm's length range may be treated as a disguised profit distribution through transfer pricing. In addition, the withholding tax and documentation aspects of service payments made from Türkiye abroad must be addressed separately. Legislation and administrative practice on these points may change; confirmation is obtained on the text in force.

So what can be done? Reverse the order. First win genuine non-resident clients, then build the structure that carries that income. A Dubai company is meaningful when it is set up as a regional sales and collection center, not as an escape route. If your Turkish client portfolio remains in place, do not close the Turkish company; run the two structures with separate functions, their own contracts and their own teams.

The scenario: you hold a securities portfolio of around USD 300,000. You receive dividends and interest and have no active commercial operation. You are considering moving the portfolio into a company you would set up in Dubai. In this profile the Controlled Foreign Company (CFC) rules land squarely on target, and the structure loses its purpose the day it is created.

Corporate Tax Law (Kurumlar Vergisi Kanunu) art. 7 requires four conditions to be met together, for fully liable individuals and entities alike: direct or indirect control of at least 50% in the foreign participation; at least 25% of gross revenue consisting of passive income; a total tax burden on commercial balance sheet profit below 10%; and total gross revenue of the participation exceeding the foreign currency equivalent of TRY 100,000. In a small, single-shareholder structure with entirely passive income, all four are met at the same time. These conditions and amounts may be updated by legislative change.

The third condition in particular is misread. You cannot say "there is a 9% corporate tax in the UAE now, so the low-tax discussion is over." Nine percent sits below the 10% threshold in the CFC rules. If you hold Qualifying Free Zone Person (QFZP) status the picture is clearer still: the rate on qualifying income is 0%. Moreover, passive and investment income mostly falls outside the definition of qualifying income; in that case the income is subject to 9% from the first dirham, because the AED 375,000 0% band does not apply to a QFZP.

The result is arithmetic. Undistributed profit is taxed in Türkiye, and in return you pay the annual license, accounting, tax registration and filing, and visa costs. Tax paid abroad may be credited under Corporate Tax Law art. 33/2, but that only prevents double taxation; it does not recover the cost of the structure. On a small portfolio, cost consumes a meaningful share of the return.

So what can be done? Keeping the portfolio where it is and declaring it properly in Türkiye is, in most cases, both cheaper and calmer. If your real objective is residency rather than the portfolio, the ten-year investor residency obtained through real estate (Golden Visa) is a separate subject and is assessed against its own threshold of AED 2,000,000 (approximately USD 545,000). At that threshold, the property must be titled in the name of the individual applicant, not the company; a portfolio moved into a company does not satisfy this condition. The outcome of the application is at the discretion of the competent authority. Do not conflate these two subjects.

This is the least emotional of the profiles we turn away. It is pure arithmetic. The cost of a Dubai structure is not one-off; it recurs every year and is fixed regardless of your income. When profit falls, cost does not. So the threshold question is this: is the annual total burden of this structure a negligibly small slice of your annual net profit, or a line item you can feel?

Let us speak in indicative figures. First-year cost moves across a wide band depending on the free zone: SPC Free Zone starts at approximately AED 13,000, a Meydan license at approximately AED 12,500, a RAKEZ license at approximately AED 6,000; IFZA typically sits in the AED 25,000 to 31,500 band; at DMCC, registration is approximately AED 9,020 and the annual license approximately AED 20,285. These are indicative amounts and do not constitute an offer; they vary with package content and visa count, and current confirmation is obtained on every file.

Recurring items sit on top: license renewal, office or flexi-desk space, accounting and annual financial statements, corporate tax registration and filing, VAT registration and periodic returns where required (the VAT threshold looks at taxable turnover, not profit), visa renewal and Emirates ID every two years, and any minimum balance the bank may require to be maintained on the account. Add to this the obligations on the Turkish side: under Decree No. 32 (32 sayılı Karar) and the Central Bank Capital Movements Circular, the initial export of capital made in order to establish a company abroad must be notified to the relevant ministries within the following three months.

Here is a rough threshold logic, not a precise figure. Think of the recurring annual total as an indicative band of AED 25,000 to 60,000 (approximately USD 6,800 to 16,300). Keeping that burden below 10% of annual net profit is a reasonable limit. Run the arithmetic and you will see that in a business whose annual net profit stays below a few hundred thousand AED, the structure mostly does not finance itself. Remember the ratio rather than the figure; the ratio does not mislead.

So what can be done? Wait until the scale grows. That wait is not wasted: win genuine non-resident clients, bring your contracts up to international standard, put your collection infrastructure in order. Make the decision to set up the structure at the point where profit comfortably carries the cost. A company set up early and closed a year later costs more than money; winding it up also takes time.

We do not work with this profile, and we write that without softening it. We say no to requests that come to us in order to conceal real income, to move an activity carried out in Türkiye to Dubai on paper only, to issue invoices not backed by a real service, or to make account movements invisible. There is a moral dimension to this, but what we really want to explain is the technical one: these arrangements no longer work.

The assumption of secrecy is wrong. The UAE is within the scope of the automatic exchange of financial account information; under the CRS framework, account information can reach Türkiye. Add to that the KYC process at account opening, the ultimate beneficial owner declaration, and the free zone's UBO records. The trail you leave when the structure is set up is your trail; it cannot be erased afterward. The sentence "Dubai provides secrecy" does not reflect today's reality.

The response on the Turkish side is severe. Tax evasion offenses under Tax Procedure Law (Vergi Usul Kanunu) art. 359, in particular issuing or using false documents, carry prison sentences. Tax loss penalties and late payment interest are added on top. MEY also has its own obligations: corporate service provision and real estate brokerage in the UAE fall within the DNFBP scope, which requires goAML registration and an AML/KYC program. Suspicious transaction reporting is not a choice, it is an obligation.

So what can be done? There is a single path: sit down with a licensed professional and correct the past and the present. Whatever must be declared in Türkiye is declared, the capital export notification is made, and the structure is set up correctly. A lawfully established structure already benefits from the UAE's low-tax regime in a compliant manner. There is no rational reason to put that at risk.

Company setup and bank account opening are two separate processes. Even with the free zone license in hand, approval of the account opening rests entirely with the bank's compliance department; no intermediary can undertake this or guarantee an outcome. In certain activity areas that discretion runs systematically against the applicant, and saying so at the outset is better than saying it months later.

Virtual assets and Web3 are the hardest. Virtual asset activities in Dubai are subject to a separate regulatory framework; a free zone trade license on its own is not sufficient to carry on the activity, and the permission of the competent regulator (VARA in Dubai, and federal-level authorities where applicable) is also required. A company set up without that permission has poor prospects before a bank. Currency exchange, foreign exchange transfers and remittance-type activities fall directly within the field of financial regulation and cannot be carried on under an ordinary trade license. Regulation in this area is updated frequently; the current framework is confirmed before application.

High-risk e-commerce is the third breaking point. Dropshipping, aggressive subscription models, high return or chargeback rates, target markets in countries carrying sanctions risk, an unintelligible payment flow. The bank's question is always the same: who is the money coming from, what contract is it based on, where is it going? A file that cannot answer those three questions with documents is closed.

So what can be done? Simplify your activity description and align your license scope with the work you actually do. In the first phase, consider operating with a regulated payment institution account, and make the bank application once the operation has matured. As genuine client contracts, invoices and supplier records accumulate, the file gets stronger. If a regulated activity is involved, obtain the permission first and go to the bank afterward; reversing that order is a waste of time.

The process runs on the timetables of external authorities, not on yours. License approval depends on the free zone authority, visa approval on the competent immigration authority (GDRFA in Dubai, ICP at federal level), and account opening on the bank's compliance department. In none of these can an intermediary party accelerate the timetable. Anyone who says "a company in seven days" is speaking only about the first step of that sentence, and that step is a small part of the whole.

The realistic ranges are these: the license generally 1 to 3 weeks, the residence visa process 2 to 4 weeks, the bank account 2 to 8 weeks, the end-to-end picture 4 to 10 weeks. These ranges vary with the readiness of the file, the apostille and translation status of the documents, the complexity of the shareholding structure and the bank selected. Visa approval is at the discretion of the competent authority; account opening is at the discretion of the bank's compliance department. A time estimate is an estimate, not an undertaking.

Haste is usually tied to a date coming from outside: a lease, a school enrollment, a contract signature, an investor meeting. The problem is not the length of the process but the absence of a buffer. When no buffer is left, people choose the wrong free zone, the wrong license category or the wrong bank. Correcting those choices takes far longer than making them correctly at the outset.

So what can be done? Build the timeline backward. Mark the critical date, add at least four weeks of buffer on top of it, and put document preparation first. Passport validity, apostilles, notarized translations, clarification of the shareholding structure and ultimate beneficial owner information can all be completed within the first week. The real bottleneck in the process is usually not administrative approvals but missing documents.

Let us balance the picture. A Dubai structure is meaningful for an entrepreneur whose income is genuinely sourced abroad, who is building a regional client or supplier network, who can actually move the operation there, and whose annual profit comfortably carries the compliance cost. When family relocation, a real office, a local team, multi-currency collections and regional contracts complete the picture, the structure becomes both defensible and sustainable.

Even in that profile, the structure is set up as a business decision, not as a tax arrangement. Corporate tax in the UAE applies to tax periods beginning on or after June 1, 2023: the rate is 0% on the first AED 375,000 of taxable profit and 9% on the portion above that amount; there is no personal income tax. That 0% band does not apply to a QFZP's qualifying income. The advantage is real, but it is not automatic; it is preserved through the right status, the right registration and regular filing. Rates and thresholds may be updated by legislative change; current confirmation is obtained on every file.

Our work begins here: process coordination, file preparation, and working together with licensed professionals in the relevant jurisdictions. We do not give the tax, legal or investment opinion; we bring you to the same table as the party who does and manage the process end to end. On the real estate side, we proceed with authorized parties, through licensed broker matching.

If you are one of these profiles, we can still talk; only with the right expectation. We will not propose setting up a structure we consider unsuitable for you. Sometimes the most valuable outcome is a company that is never set up.