Taxation in Dubai for foreign investors (complete guide 2025)

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The real estate investment market in Dubai is a prime destination for foreign investors seeking a favorable tax environment and growth opportunities. While the city is often associated with luxury and skyscrapers, it offers a unique tax environment that differs significantly from that of many Western countries, including France. Understanding the ins and outs of taxation in Dubai is essential for any investor wishing to embark on a real estate project in the United Arab Emirates.

Our experts guide you through the key aspects of this system, emphasizing the advantages and steps to follow.

Why does Dubai's tax system appeal to foreign investors?

Dubai's appeal is based primarily on one simple principle: virtually non-existent taxation on personal income and capital gains. This major advantage, which has made the emirate's reputation, is a powerful lever for maximizing the profitability of your investments.

Zero income tax and capital gains tax

One of the biggest advantages for investors and expatriates is the complete absence of personal income tax. Whether you are a resident of the United Arab Emirates or a foreign investor, the income you generate personally is not taxed. This includes rental income from your property in Dubai.

In addition, Dubai stands out for its lack of capital gains tax on real estate. Unlike countries such as France, where capital gains on the resale of property are subject to high tax rates, you can resell your property in Dubai and keep 100% of the capital gains. This right to net capital gains is a compelling argument that makes the market all the more attractive.

No recurring property tax

In Dubai, there is no annual property tax equivalent to the housing tax or property tax known in France. Property owners are not subject to this recurring charge. The only costs to be expected are condominium fees, which vary depending on the size of the building and the services offered, but which are not local taxes imposed by the government.

VAT in Dubai: a point of vigilance for businesses

Since January 1, 2018, VAT has been introduced in the United Arab Emirates, with a standard rate of 5%. While this tax does not directly apply to the purchase of new residential property or the resale of existing property, it does apply to most goods and services. For investors who set up a business or company for the purpose of managing their real estate portfolio commercially, it is crucial to understand the implications of VAT.

Our experts can assist you in setting up your structure and completing the administrative procedures to ensure your project complies with regulations.

Fees and taxes related to buying property in Dubai

Even though Dubai's tax regime is very advantageous, buying property is not without costs. It is essential to factor these into your budget to avoid any surprises.

● Registration fees (DLD Fee): This is the main cost when purchasing a property. The Dubai Land Department (DLD) charges a property transfer fee of 4% of the purchase price. These fees are usually shared between the buyer and seller, but it is customary for the buyer to pay the full amount. For example, for the purchase of a property worth AED 1 million, the registration fee will be AED 40,000.

● Agency fees: Real estate agency fees are generally around 4% of the purchase price.

● Administrative and legal fees: The assistance of a lawyer or law firm is recommended to secure the transaction, particularly to verify title deeds and contract compliance. Fees may vary, but this is an investment that guarantees the success of your project.

Corporate taxation and Free Zones

Dubai recently introduced a corporate income tax at a rate of 9% for annual revenues exceeding AED 375,000. This measure, which came into effect in 2023-2024, aims to bring the United Arab Emirates into line with international standards.

However, it is important to note that many companies established in Free Zones can continue to benefit from a 0% tax rate under certain conditions. These Free Zones, numbering around 40, offer an extremely favorable business environment, with full repatriation of capital and profits, and no corporate or income tax.

If you are considering setting up a structure for your real estate investments, our partner lawyers and tax experts can guide you towards the best option.

French-Emirati tax treaty: avoiding double taxation

For French investors wishing to expatriate their investments, the tax treaty signed between France and the United Arab Emirates is a crucial document. Its purpose is to avoid double taxation and clarify the tax regime applicable to different types of income.

● Real estate income: Under the agreement, rental income and capital gains on real estate are taxable in the country where the property is located, i.e., Dubai. This means that a French investor will not pay tax on their rental income in Dubai, nor will they be taxed on this same income in France. However, they will have to declare this income in France for the calculation of the effective tax rate on their other French income (the tax credit principle). The CSG/CRDS social security contributions are still payable (17.2%).

● Capital gains on real estate: Capital gains realized on the resale of a property in Dubai are exempt from tax in Dubai but are taxable in France.

● Property owned in Dubai by a French tax resident must be declared to the IFI (Impôt sur la Fortune Immobilière, or Real Estate Wealth Tax).

These provisions make buying real estate in Dubai an excellent wealth optimization tool for French investors, but creating a real estate holding structure allows investors to optimize their investment beyond the scope of the agreement.

For more information: Visit our Investing in Dubai from France page for a comprehensive guide to investment conditions and specific procedures for French citizens.

Becoming a resident and obtaining an investor visa

Buying property in Dubai can open the door to residency status and obtaining a long-stay visa. These visas, such as the Golden Visa, are available to investors who meet certain investment criteria. Obtaining a residence visa not only facilitates extended stays, but also simplifies opening a bank account, accessing public services, and completing administrative procedures.

For more information: Our article Visa for Dubai details the investment amounts required, the necessary documents, and the steps to follow to obtain your visa.

Conclusion: a favorable tax framework to secure your investment

Dubai's tax system is a real asset for foreign investors. The absence of personal income tax and capital gains tax, coupled with the absence of recurring property tax, makes the net return on real estate investments particularly attractive. Although purchase fees and a new corporate tax exist, the overall framework remains very favorable compared to most global real estate markets.

However, it is essential not to go it alone. Laws can change and each tax situation is unique. Using a specialist consulting firm such as ours is the best way to secure your project, benefit from advice, and avoid pitfalls. At Hawk Invest, our experts are on hand to support you from start to finish, from evaluating your project to finalizing the legal and tax procedures.