One of the most common misconceptions is the belief that if a business owner relocates to the UAE, their UK company somehow ceases to be subject to UK corporation tax. Unfortunately, it is rarely that simple.
A UK-incorporated company will generally remain within the UK corporation tax regime, regardless of where its shareholders or directors reside. Simply moving abroad does not automatically change the company's UK tax position. The issue also becomes more complex when key decision-makers relocate and begin running the business from another jurisdiction.
Where a company's strategic decisions are made can be just as important as where it is incorporated. If directors are based in the UAE and are making significant commercial decisions there, the UAE authorities may consider the company to be managed and controlled from the UAE.
This can create a situation where both the UK and the UAE assert taxing rights over the company, resulting in uncertainty, additional compliance obligations, and the risk of disputes between tax authorities. Many assume that a double tax treaty automatically resolves these issues. However, where a company is considered resident in both jurisdictions, determining treaty residence may require agreement between the UK and UAE competent authorities, with such processes being time-consuming, costly and uncertain.
Many business owners focus on where they live but overlook where their company is genuinely managed. Tax authorities increasingly look beyond paperwork and examine the reality of decision-making. Questions often include:
• Where are board meetings held?
• Where are strategic decisions made?
• Who is exercising real control over the business?
• Are directors simply rubber-stamping decisions made elsewhere?
The answers to these questions can have significant tax consequences.
For businesses seeking to preserve UK tax residence, it is critical that central management and control remains demonstrably in the UK. This typically requires:
• Properly constituted board meetings in the UK.
• Strategic decisions being made by the board in the UK.
• Comprehensive board minutes and governance records.
• UK-based directors exercising genuine decision-making authority.
• Consistency between the legal documentation and the practical reality of how the business operates.
Corporate residence is often overlooked until it becomes a problem. We help business owners and internationally mobile entrepreneurs assess residence risks, review governance arrangements, and ensure management and control is aligned with their intended tax position. If you're relocating to the UAE while retaining a UK company, feel free to get in touch.
How can Sanctuary help?
Relocating to the UAE while retaining a UK company can create complex corporate residence and tax issues. The key question is not only where the owner lives, but where the company is genuinely managed and controlled, and whether the practical decision-making matches the intended tax position.
At Sanctuary, we help business owners and internationally mobile entrepreneurs review corporate residence risks, governance arrangements, board procedures and UK/UAE tax exposure. We can also advise on whether existing structures remain appropriate following relocation and what steps may be needed to reduce uncertainty.
Visit our Tax & Advisory service page to find more about our tax & residency advisory services, or contact us for a bespoke consultation via the contact form or email us at: hello@sanctuary.ae.
For UK businesses considering opportunities in Saudi Arabia, the following steps outline the overall process:
1. Business Activity: Determine the appropriate business activity which will aligns with your business and satisfies all undertakings you will engage with in the Kingdom.
2. Local Partnerships: Consider any potential opportunities for collaborations with established local businesses to ease market entry and meet regulatory requirements.
3. Documentation: Gather the required documentation for incorporation in KSA.
4. Company Registration: Work with experts and the relevant governing bodies to assist with the incorporation process, ensuring compliance with local laws and regulations.
5. Other Requirements: Consider any other requirements for establishing in Saudi Arabia such as capital and tax requirements.
Saudi Arabia's Vision 2030 represents a significant opportunity for UK businesses to engage with an expanding market with vast potential. As the Kingdom continues to diversify its economy and expand its global influence, UK companies are well-positioned to support and benefit from this transformation. With the right strategy, partnerships, and local support, there are a wealth of possibilities.
By aligning your business with Saudi Arabia’s Vision 2030, the benefits for UK and international businesses looking to Saudi Arabia have never been greater.
At Sanctuary, we specialise in assisting businesses looking to expand into Saudi Arabia. We help navigate the complexities of the Saudi market, ensuring that you have the expertise needed to best prepare for success, so get in touch today.
Our expert team offers comprehensive support across a range of services, from company registration, advisory services, and more. Explore our services to discover how we can help you.
Vision 2030 is a strategic framework designed to diversify Saudi Arabia’s economy, reduce its dependency on oil, and transform the Kingdom into a global business hub.
Key points include economic diversification, social reforms, investment in technology and infrastructure, sustainability, and creating a competitive workforce.
The main focus of the Saudi Arabian Vision 2030 strategy is to build on key economic sectors such as hospitality, travel and tourism and build economic stability and sustainability.
Saudi Arabia’s Vision 2030 initiative is aimed at diversifying its economy through strategic investments into the non-oil sector and ensuring a more sustainable economic future.
Saudi Arabia has committed over $500 billion to Vision 2030, funding projects that span a variety of sectors, including energy, tourism, and infrastructure.
Yes, with its growing economy, reform initiatives, and investment incentives, Saudi Arabia is a highly attractive destination for foreign businesses seeking growth opportunities.
Key growing industries include renewable energy, tourism, healthcare, technology, and education.
Saudi Arabia permits foreign owned businesses and investment into the Kingdom, which has been elevated by the Vision 2030 initiative. A MISA licence is required for foreign investors or businesses to establish.
As a result of the diversification efforts of Saudi Vision 2030, the non-oil and private sector in the Kingdom have witnessed unprecedented growth in the past few years. The private sector continues to grow each quarter and the non-oil sectors continue to reach record contributions for the Kingdom’s GDP.
