Until the Türkiye side is resolved, the Dubai side means nothing.

The Turkish tax system taxes an individual by residence, not by nationality. Articles 3 and 4 of the Income Tax Law (Gelir Vergisi Kanunu) set two tests. The first is domicile: a person whose domicile is in Türkiye has full tax liability. The second is time: a person who stays in Türkiye continuously for more than six months within a calendar year also has full tax liability. Someone with full tax liability declares worldwide income in Türkiye, no matter where that income arises.

These two tests are alternatives, not a sum. Getting the day count right is not enough on its own. If your domicile is still deemed to be in Türkiye, full tax liability continues. And domicile is not simply a registered address. Where the family actually lives, the home in continuous use, the children's school, and the center in which economic ties are concentrated are all assessed together. Disputes arise at exactly this point: the individual considers himself to be abroad, while the file points to Türkiye.

The sentence we hear most often is this: “I have an Emirates ID, so I am no longer a taxpayer in Türkiye.” That sentence is wrong. The Emirates ID is an identity document and the UAE residence visa is a residence permit. Neither is a tax residency document. What determines your status in Türkiye is not the card in your wallet but where you actually live and where your domicile is deemed to be. The position is the same on the UAE side: a residence visa alone does not establish UAE tax residency.

Ending full tax liability is not an application procedure; it is the documentation of a change in the way you live. The aim is to be able to build the sentence “from this date onward my center was the UAE” record by record, should an audit ever occur. That is why the file is assembled from day one. Documents gathered after the fact are always weak, because the distance between the date of the document and the date of the event is itself a question mark. The list below is the minimum evidence set we ask for as standard from the entrepreneurs we work with.

On the UAE side, tax residency was put on a written footing in 2022. Cabinet Decision No. 85 of 2022 has applied since 1 March 2023 and defines three separate routes for individuals. Satisfying one of the three routes is sufficient; all three are not required. The critical point is this: a residence visa is none of these routes in itself. The visa is only one of the conditions sought under the second route, and on its own it produces no outcome.

If you wish to benefit from treaty provisions, residency must be documented. The instrument for this is the Tax Residency Certificate, or TRC for short. The TRC is issued by the UAE Federal Tax Authority for a defined period and generally in relation to a specific country. The application relates to a past period. In other words, you must actually have satisfied the conditions for that period before obtaining the certificate. There is no way to correct the past afterward, which is why a residency plan is made at the beginning of the year. The rules in this section are based on Cabinet Decision No. 85 of 2022 and the related administrative guidance; because legislation and practice may be updated, the current position should be confirmed before applying.

Counting days sounds simple, but in practice it is where the most mistakes are made. The 183-day and 90-day thresholds are calculated over a consecutive twelve-month period, not over a calendar year. Whether entry and exit days are counted, together with transits and short business trips, can change the outcome depending on how the record is kept. For that reason, rather than trying to reconstruct your days from memory at year end, we recommend keeping a date-by-date record from the first day.

Dual residency is not a theoretical problem; it is very common. The individual sets up a company in Dubai, obtains a residence visa and rents an apartment in the UAE. But his family is in Istanbul, he spends most of the year in Türkiye and in practice runs the business from there. A residency claim may arise on the UAE side, while full tax liability in Türkiye was never interrupted in the first place. The result is a file in which both countries treat the same person as their own resident.

This is where the double taxation treaty between Türkiye and the UAE comes into play. The treaty does not eliminate tax. It governs which country taxes which income and how double taxation is relieved. In cases of dual residency, the treaty establishes a single residency through sequential tests: permanent home, center of vital interests, habitual abode, nationality and, finally, mutual agreement between the competent authorities. All of these tests rest on documents, not on declarations of intent.

The provision most often misunderstood is article 23. For residents of Türkiye, the treaty adopts the credit method, not the exemption method. That means the income is declared in Türkiye and tax paid abroad is deducted from the Turkish tax calculated. Because there is no personal income tax in the UAE, the amount to be deducted is zero. The conclusion is plain: a person who remains a resident of Türkiye pays the Turkish tax on Dubai-sourced personal income in full. The treaty does not change that outcome.

The treaty is therefore not a shield but a rulebook. For it to work, residency must genuinely have changed first. If residency has not changed, the only thing the treaty delivers is the prevention of the same income being taxed twice, and since there is no tax at the personal level on the UAE side, that risk does not exist to begin with. In other words, the benefit expected from the treaty never arises at all in the scenario most Turkish entrepreneurs are in.

KEYK is the Controlled Foreign Company (CFC) regime set out in article 7 of the Corporate Income Tax Law (Kurumlar Vergisi Kanunu). Its purpose is simple: to prevent Turkish tax from being deferred indefinitely by accumulating profit in a low-taxed company abroad and never distributing it. If four conditions are met at the same time, the earnings of the foreign subsidiary are taxed in Türkiye even if they have not actually been distributed. If one condition is missing, the regime does not apply. That is why the assessment is made condition by condition, not in general terms.

In Dubai structures, the third condition is the one most often debated. In the UAE, the corporate tax rate is 9 percent on taxable profit above AED 375,000 (approximately USD 102,000), and 0 percent applies below that amount. For a company holding QFZP (Qualifying Free Zone Person) status, however, that 0 percent band does not apply; qualifying income is taxed at 0 percent and non-qualifying income at 9 percent from the first dirham. As a result, the effective burden on commercial book profit remains below 10 percent in most scenarios, and the third condition is typically met.

What is usually decisive is the second condition: whether at least 25 percent of gross revenue consists of passive income. Items such as interest, dividends, rent, license fees and gains from the purchase and sale of securities are treated as passive. By contrast, in a company that has real staff, an office and customers in Dubai and actually sells goods or services, this ratio is usually not exceeded. In other words, KEYK does not automatically penalize a structure with genuine activity; it penalizes an empty one.

If the four conditions are met together, the portion of the subsidiary's corporate earnings attributable to you is declared in Türkiye even where no profit distribution takes place. The approach of “I will keep the money in Dubai and never bring it to Türkiye” therefore does not change the outcome under this regime. The only thing that changes is that undeclared earnings surface years later, together with late payment interest. The same earnings are not taxed a second time when they are subsequently distributed. Taxes paid abroad may be credited under article 33(2) of the Corporate Income Tax Law.

The practical meaning of that last sentence is this: the assessment and payment documents for the 9 percent corporate tax you pay in the UAE are records that must be retained on the Türkiye side. No credit can be claimed for tax without documentation. In the same way, the subsidiary's financial statements, its revenue breakdown and the analysis showing the passive income ratio are kept on file for each year. When a KEYK assessment is made retrospectively and all you hold is a bank statement, you lose the argument.

Everything up to this point concerned the individual's tax status. This heading concerns the company itself, and its impact is far greater. Under article 3 of the Corporate Income Tax Law (Kurumlar Vergisi Kanunu), companies whose legal seat or place of effective management is in Türkiye have full tax liability. The word “or” is decisive here. Even if the company's registered seat is in Dubai, if its place of effective management is found to be in Türkiye, the entire company may be treated as a fully liable taxpayer in Türkiye.

The place of effective management is the place where operations are in fact concentrated and directed. The question is this: where is this company really run from? Where are strategic decisions taken, where are contracts negotiated and signed, who speaks to customers and from where, where does the staff sit, who instructs the bank account and from where? In single-shareholder, single-manager structures, the answer is usually wherever the manager actually is. A mailing address in Dubai and two visits a year is a weak answer to that question.

This risk is heavier than KEYK, which is why it deserves a heading of its own. KEYK only brings the earnings attributable to you into declaration in Türkiye. A finding on the place of effective management turns the company's worldwide earnings into the earnings of a fully liable Turkish company. The problem grows from a single income item into an entire legal entity. That is why a decision on where management will actually sit must be taken before the structure is set up, and once taken, life must be arranged in line with it.

The place of management is proven not by a sentence written after the fact but by records that accumulate over time. The items below are not decisive on their own; they acquire meaning when they are consistent and taken together. The weakness we see most often is documents that contradict one another: the minute book says Dubai, but the manager's passport shows an entry into Türkiye on the same day. A contradiction of that kind casts doubt on the rest of the file as well.

In most structures, the existing company in Türkiye and the new company in Dubai provide services or sell goods to each other. Software is developed in Türkiye and the invoice is issued from Dubai. Or the Dubai company invoices the Turkish company for management, brand or advisory services. All of these are related party transactions and are subject to transfer pricing rules. The rule can be summed up in a single sentence: the price may not depart from the price that would arise between unrelated parties for the same transaction.

Pricing that is not arm's length leads to the conclusion that profit has been distributed in a disguised manner. The mistake we see most often in practice is that the real work is done by the team in Türkiye while most of the profit is left in Dubai. If the functions performed, assets used and risks assumed weigh toward Türkiye, the profit must largely remain in Türkiye as well. If you cannot show that the Dubai company's share is proportionate to the functions it performs and the risks it bears, the pricing is not defensible.

Documentation must not be neglected. Related party transactions are reported on the annual transfer pricing form; for taxpayers exceeding certain thresholds, annual documentation and, depending on group size, country-by-country reporting obligations come into play. The scope of these obligations varies with turnover, transaction volume and the structure of the group. Thresholds, form content and the reporting calendar may change with legislative updates. What the scope is in your particular file is clarified on the basis of actual figures with the licensed professional you work with in Türkiye.

One more warning. Issuing an invoice does not prove that a service was provided. Particularly for management and advisory services, the authorities first ask whether the service was actually received, and only then discuss its price. Service invoices with no deliverables, no correspondence and no record of who spent how many hours are therefore the most fragile item of all. Sign the contract before the work begins and leave a trail of the service within the natural flow of the work.

Where persons resident in Türkiye set up a company abroad or acquire a shareholding in an existing one, this is subject to notification under Decree No. 32 (32 sayılı Karar) and the Capital Movements Circular of the Central Bank of the Republic of Türkiye. This is a notification, not an authorization. Your investment is not blocked; it is placed on record. The obligation is to notify the relevant ministries within three months following the first export of capital. In subsequent periods, information on the activity and the shareholding structure is also expected to be updated.

In practice, this is the step most often skipped. The activity on the Dubai side overshadows a one-page form on the Türkiye side. Yet a missing notification will make life harder later, when you have to explain the source of the capital outflow. The description on the bank transfer must be consistent with the notification and with the company records in the UAE. The notification channel, the form and the required annexes may change with legislative updates, so in every file the current position is confirmed before the transaction.

The real value of this step is evidentiary rather than bureaucratic. When you are asked years later where the capital of the Dubai company came from, you need a chain consisting of a dated notification, a bank receipt and incorporation documents. If one link in the chain is missing, the discussion shifts to the source of the capital, and the subject moves from tax into a far more burdensome area. The notification is the cheapest and easiest link in that chain.

The sentence “Dubai gives you privacy” is a habit left over from before 2015 and it is not true today. The UAE falls within the CRS regime for the automatic exchange of financial account information. Banks in the UAE identify the tax residency of the account holder, obtain a self-certification form and report information on reportable accounts to the competent authority. That information may reach Türkiye within the framework of automatic exchange. In other words, an account being in Dubai does not mean the account is invisible.

The set of reported information is broader than most people assume: the account holder's identity details, tax identification number, account number, period-end balance and certain types of income credited to the account during the period. For corporate accounts, the controlling natural persons are also identified. An account opened in the name of a legal entity therefore does not place the person behind it outside the scope. If the bank's compliance function sees an inconsistency between the residency you declare and the information in the file, it will ask for additional documents or decline to open the account.

The conclusion to be drawn from this is not negative; if anything, it points the way. A structure aiming to be invisible can still be set up today, but it cannot be sustained. A visible and consistent structure delivers a benefit in both directions: it makes opening a bank account in the UAE easier, and it is defensible on the Türkiye side. The latter is how we work. Building a file in which every document confirms the next, and which tells the same story whoever asks, is both less stressful and cheaper over the long term.

Our reason for writing this page is straightforward. There are many players selling Dubai setups, and almost none explaining the Türkiye side. Yet the entrepreneur's real risk sits on the Türkiye side, and that risk is managed when the decision to set up is taken, not afterward. We put this picture on the table at the first meeting. Some of our meetings end with the sentence “a Dubai structure does not make sense in your situation right now.” For us that is not a failed meeting; trying to fix a badly built structure years later is far more expensive.

Our role is process coordination. Comparing free zone and mainland options, selecting a license that matches the activity code, running the incorporation and license application, the residence visa and Emirates ID process, preparing the file for a bank account, and matching you with licensed brokers on the real estate side. For the real estate route to the Golden Visa, the minimum AED 2 million property is expected to be registered with the title deed in the name of the applying individual, not in the name of a company. Matters of tax status, filing and documentation on the Türkiye side are handled with licensed professionals in Türkiye. We take on the coordination with those professionals and the preparation of the file.

Let us also be clear about timing and outcomes. The license process generally takes 1-3 weeks, the residence visa 2-4 weeks and opening a bank account 2-8 weeks. End to end, a range of 4-10 weeks is realistic. These timelines are indicative; they are not a commitment and they vary with the state of the file. In Dubai, residence and Golden Visa procedures run through GDRFA Dubai; in the other emirates the process runs through the federal ICP. Visa approval is at the discretion of the competent authority. Bank account approval is at the discretion of the bank's compliance function. No provider can guarantee these two outcomes; a provider who says otherwise has told you something untrue on day one.

One final note. This page is for general information purposes; it does not constitute tax, legal or investment advice and does not replace an assessment specific to your circumstances. Legislation changes, thresholds are updated, and the details of your file change the outcome. What each heading you have read here means in your own situation is clarified together with licensed professionals in Türkiye, such as sworn financial advisers, certified public accountants and lawyers. We clear the path to that clarity, coordinate the process between the two countries and assemble the file.