Relocating to, or setting up in, the UAE

Read these in this order

10 frameworks. Each one ends in a number rather than an opinion.

1. 01
   Currency risk and the dirham peg

   The dirham has been pegged to the US dollar at 3.6725 for decades, which means a Gulf resident holding dirham property, dirham salary and dollar denominated funds is not diversified across three currencies but concentrated in one, and the exposure only becomes visible when the money is eventually spent somewhere else.

2. 02
   Residency, and the tax that follows you

   Moving to a country with no income tax removes the tax charged by the place you live, and leaves untouched every tax charged by the place an asset sits, the country whose passport you hold, or the country a fund is domiciled in, which is where the surprises come from.

3. 03
   The Golden Visa versus the Portugal D7

   A golden visa and a Portugal D7 are usually presented as two ways of buying residency, and they are not the same kind of thing at all, because one is qualified for with an asset that must then be held untouched for ten years and the other with an income and a requirement to live there.

4. 04
   Wills and succession in the UAE

   Assets held in the UAE by a non-Muslim expatriate do not automatically pass under their home country will, and without a will registered in a recognised UAE registry the default distribution rules apply to those assets regardless of the owner's nationality or intentions.

5. 05
   Corporate versus personal ownership

   In the UAE, rental income earned by an individual from property held personally without a licence falls outside corporate tax entirely, while the same property held through a company is taxable at nine percent above the threshold, which makes the ownership structure a larger decision than most buyers realise.

6. 06
   Fund domicile, and the sixty thousand dollar trap

   For an investor who is not a US person, holding US domiciled funds exposes everything above sixty thousand dollars to US estate tax at rates rising to forty percent, while the identical index held through an Irish domiciled UCITS fund generally carries no such exposure and half the dividend withholding.

7. 07
   Emergency liquidity

   Emergency liquidity is cash held deliberately so that a job loss, a vacancy or a levy never forces the sale of an illiquid asset at the wrong moment, and for a property owner in an expatriate market it needs to be larger than the standard advice because the two risks arrive together.

8. 08
   Rent versus buy

   The only fair rent versus buy comparison is unrecoverable cost against unrecoverable cost: the rent you pay against the interest, service charges, opportunity cost and amortised transaction costs of owning, which together usually come to about five percent of the property value each year.

9. 09
   The home you live in

   A home you live in produces no income and cannot be sold without buying or renting somewhere else, which makes it a consumption asset with an investment attached rather than an investment, and treating it as the latter distorts every other decision in the portfolio.

10. 10
    Insurance and its gaps

    Insurance transfers risks that would be financially catastrophic and is poor value for risks that would merely be inconvenient, which means the useful question is never what am I insured for but which single event would do the most damage and whether anything currently covers it.

Run your own numbers

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Terms you will meet

Each is one sentence, then the trap it hides.

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