Perspective

Moving to Dubai From the USA:
What Americans Need to Know About Residency, US Tax and Company Setup

The UAE does not tax individual income, but the IRS still expects a return from US citizens wherever they live. What the official sources say, what they leave open, and where a UAE company fits in.

By Imran Mirza·Founder & CEO, XILLION Group UAE
26 October 2026
9 min read
Imran Mirza, Founder & CEO of XILLION Group UAE, beside the headline "No UAE income tax. The IRS still expects a return."

Most Americans who ask me about moving to Dubai start with the same sentence: "I hear there is no tax." That is half true. The UAE government portal states that the UAE does not levy income tax on individuals. But the IRS says that your worldwide income is generally subject to US income tax regardless of where you are living. Both statements are on official pages, and a move that ignores either one tends to go wrong later.

I was born and raised in the UAE, and I have 18+ years of working life here, including nearly seven years at Barclays and ADCB working with business clients and account opening, and 12 years in business setup. I am not a tax adviser, and nothing here is tax or legal advice. This piece sticks to what the authorities have published, says where I am giving a view, and says where you need a US tax professional. Rules and fees change, so check the current official pages before you act.

Why the question is coming up now

On 18 September 2026 a US presidential proclamation extended the requirement of a USD 100,000 payment for certain H-1B petitions. The proclamation takes effect on 21 September 2026 and expires after 12 months unless extended. Mintz's summary lists the exemptions, including people already holding H-1B status, and notes that litigation over the earlier fee is still pending. I mention it only because changes like this make people ask where else they could be based. This article takes no position on US immigration policy.

What the UAE side gives you

On personal income, the answer is simple. The government portal says individuals are not subject to income tax in the UAE. A company is a different matter. Corporate tax is 0% on taxable income up to AED 375,000 and 9% above it, for financial years starting on or after 1 June 2023. So if you own a UAE company, the company has its own tax position, separate from you as a person.

You can also ask the Federal Tax Authority for proof of UAE tax residency. The FTA's Tax Residency Certificate page says a natural person must have resided in the UAE for at least 180 days, lists the documents (passport, residence permit, Emirates ID, a certified lease, proof of income and six months of UAE bank statements), and gives a fee of AED 1,000 for a person who is not tax registered. Verify those details on the day you apply. The rules for tax residency itself are covered in our piece on tax residency and the days you need.

A UAE tax residency certificate proves where you are tax resident for UAE purposes. In my reading, it does not remove a US citizen's filing duties, because those come from US law.

What the US side still asks of you

The IRS filing requirements page for people abroad says that citizens abroad generally have to file income tax returns the same way as those in the US, based on gross income from worldwide sources. Moving to a country without personal income tax does not, by itself, end that obligation.

The tool most Americans ask about is the foreign earned income exclusion. The IRS explains that it applies to foreign earned income, meaning pay for personal services, that you need a tax home in a foreign country, and that you must pass either the bona fide residence test or the physical presence test. You claim it on Form 2555. For 2026 the limit is USD 132,900, and the foreign housing base amount is USD 21,264, according to IRS Notice 2026-25.

The two tests work differently. The physical presence test requires 330 full days in a foreign country during any period of 12 consecutive months, and the days do not have to be consecutive. The bona fide residence test asks for residence in a foreign country for an uninterrupted period that includes an entire tax year, and the IRS weighs your intent, your activities abroad and the nature of your stay. Living abroad for a year does not automatically qualify you. If you plan to travel a lot, count your days from the start.

There is a point here that matters for founders. The exclusion covers pay for personal services. Whether and how a given payment from your own company fits that definition is a question for a US tax professional, and it is worth asking before you decide how to pay yourself, not after.

The IRS foreign tax credit page explains that foreign income taxes paid can be claimed as a credit on Form 1116. My view: with no UAE personal income tax, there is usually little personal foreign income tax to credit, so the exclusion is the question most people end up asking. Your adviser will tell you if that is right in your case. Also, the IRS list of US income tax treaties does not include the UAE, so do not assume a treaty will settle a question for you.

Accounts, FBAR and FATCA

Opening a UAE account as a US person brings reporting on both sides. On the US side, the IRS FBAR page says a report is required when the combined value of foreign accounts exceeded USD 10,000 at any time during the calendar year. It is due on 15 April for the previous year, with an automatic extension to 15 October. Separately, Form 8938 has its own thresholds for people living abroad: for a single filer, more than USD 200,000 on the last day of the tax year or more than USD 300,000 at any time during it. The two filings are different, so ask your adviser which apply to you.

On the UAE side, the Ministry of Finance explains that the UAE signed an intergovernmental agreement with the US on FATCA, and that UAE reporting financial institutions must identify and report accounts held by US persons, with the information exchanged with the IRS. The Ministry's FATCA FAQ says banks ask for a self-certification that records your tax residency and any US taxpayer identification number, and that they generally have to report the US TIN of US account holders.

In practice, this means an American applicant should expect questions, and should arrive with the paperwork in order. A bank decides whether to open an account, and no one can promise that outcome. If you want to understand the usual process, we explain it on our bank account page.

Residency: the routes the government lists

Residency is a separate question from tax. For long-term residence, the UAE government's Golden Visa page, updated 28 July 2026, lists categories: investors, entrepreneurs, exceptional talent, outstanding students, and humanitarian pioneers and frontline heroes, with validity of five or ten years depending on the category. The Federal Authority for Identity, Citizenship, Customs and Port Security describes the benefits, including residency without a sponsor and permits for spouses and children. Each category has its own conditions, and the authorities decide every application.

For example, GDRFA Dubai's entrepreneur service says applicants must be nominated by the Dubai Future Foundation and meet one of the stated project criteria, and that nomination alone is not final approval. Someone may qualify under one of these routes, subject to authority approval and current requirements. Our Golden Visa guide goes through the categories in more detail.

Setting up a company as an American

Setting up a company is a separate step from residency. The licensing authority decides the company, and the immigration authority decides each visa.

On ownership, free zone companies can be fully owned by foreign investors. The same page says free zone companies are treated as outside mainland jurisdiction, so direct sales on the mainland generally need the appropriate mainland licences or approvals. For the mainland, the government states that foreign investors can fully own onshore companies for most activities, with a published list of restricted ones. Which route suits you depends on your activity and your customers. We compare them in mainland or free zone.

One point on the US side, and I will keep it general. The IRS Form 8938 page refers to other reporting forms, such as Form 5471 for foreign corporations, which tells me that owning a foreign company can bring extra US reporting. Ask a US tax professional before you incorporate, not after.

Where I land

The honest summary for an American is this. The UAE side is fairly clear: no personal income tax, a defined corporate tax regime, defined residency routes, and a banking system that will ask for FATCA paperwork. The US side does not go away, and it is the part that deserves the most careful advice. I would speak to a US tax professional first, then settle the residency route, then the company structure, and then the bank. Doing it in that order saves expensive corrections.

If it would help to talk through your own case, contact us. We are here. Accounting and tax services are coordinated through external professional partners, and approvals, licences and bank accounts are decided by the authorities and the banks, so nobody can promise them.

Frequently Asked Questions

Do Americans pay tax in Dubai?
The UAE government portal states that the UAE does not levy income tax on individuals. A company is taxed separately: corporate tax is 0% on taxable income up to AED 375,000 and 9% above it. None of this changes US rules, because the IRS says worldwide income is generally subject to US income tax regardless of where you live.
Does moving to the UAE stop US tax for a US citizen?
No. The IRS filing requirements page says citizens abroad generally file income tax returns the same way as those in the US, based on gross income from worldwide sources. A UAE tax residency certificate shows UAE tax residency only. Speak to a qualified US tax professional about your own position.
What is the foreign earned income exclusion and how much is it for 2026?
It lets qualifying US citizens and residents exclude some foreign earned income, which means pay for personal services, if they have a tax home in a foreign country and pass the bona fide residence test or the physical presence test of 330 full days in 12 consecutive months. IRS Notice 2026-25 sets the 2026 limit at USD 132,900 and the foreign housing base amount at USD 21,264. You claim it on Form 2555.
Do I have to report my UAE bank account to the US?
Possibly. The IRS says an FBAR is required when the combined value of foreign accounts exceeded USD 10,000 at any time during the calendar year, and Form 8938 has separate thresholds. On the UAE side, banks must identify and report accounts held by US persons under the FATCA agreement, and they ask for a self-certification that records your tax residency and any US taxpayer identification number. A bank decides whether to open an account, and no one can promise that outcome.
Can a US citizen get a UAE Golden Visa?
A US citizen may qualify under one of the categories the UAE government lists, which are investors, entrepreneurs, exceptional talent, outstanding students, and humanitarian pioneers and frontline heroes. Each category has its own conditions, and every application is subject to authority approval and current requirements. Check the official pages before you apply.
Can an American own a UAE company fully?
The UAE government states that free zone companies can be fully owned by foreign investors, and that foreign investors can fully own onshore mainland companies for most activities, with a published list of restricted ones. Free zone companies generally need mainland licences or approvals for direct mainland sales. Owning a foreign company can also bring extra US reporting, so ask a US tax professional before you incorporate.

Sources

All pages accessed 26 October 2026.

United States (official)

United Arab Emirates (official)

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Related reading: Can a Free Zone Company Work in Mainland Dubai? · Why Entrepreneurs Are Moving to Dubai in 2026 · UK and European founders leaving for Dubai · UAE Golden Visa guide · UAE corporate tax guide · mainland or free zone · what business setup costs · tax residency and days needed · Golden Visa services · business setup in Dubai · free zone company setup · mainland company setup · UAE bank account support · contact us

Imran Mirza, XILLION Group UAE
Imran Mirza
Imran Mirza is the Founder and CEO of XILLION Group UAE. He has 18+ years in the UAE, including nearly seven years at Barclays and ADCB working with business clients and account opening, and 12 years in business setup. He writes about company formation, Golden Visas, corporate tax and banking.
This article is for general information only and is not legal, tax or immigration advice. Visas and residency are subject to authority approval, and rules can change. Your tax position in your home country depends on its own laws, so speak to a qualified adviser there before you act.