Knowledge

“Afridi & Angell have a very qualified team who are well versed with the local laws and provide correct advice to their clients. They are very prompt and efficient and always well researched.” - Legal 500 EMEA

UAE Welcomes Digital Nomads: live and work from anywhere policy

Afridi & Angell inBrief

By Saurbh Kothari

The COVID-19 pandemic has changed the traditional thinking of employers that employees must physically work from the office. More and more employers around the world are revising their policies and are now permitting their employees (whose duties do not require them to be physically in the office) to work remotely. In some cases, an employee may even reside in and work from a country different from that of the country of the employer.

 

As times are changing, revising these policies to create more flexibility in the traditional way of working helps employers attract and retain talent (who are increasingly looking for flexible working conditions).

 

Airbnb has recently announced a live and work from anywhere policy. Among many benefits, Airbnb’s policy allows employees to work from any foreign country for up to 90 days a year in each location.

 

However, moving to a different country to live and work is not always straight forward. There are various issues which an employer and an employee will need to consider. For example, if an employee moves to a country in which the employer is not licensed to do business, will the employer be seen as operating from that country? This could entail registration, licensing or even taxation issues with the relevant authorities of that country.  There could also be income tax consequences for an employee living and working for extended periods of times in a foreign country other than the country of residence.

 

With time, as more and more individuals explore living and working from a foreign country, solutions to such issues will emerge and processes and requirements will become simpler.

 

Many countries around the world are already competing to attract digital nomads by offering remote working visas. From the early days of the COVID lockdown, Dubai was one of the leaders in encouraging people who work remotely to move to Dubai.  It has implemented a remote working visa policy which permits an individual (either an employee of an employer based outside of the UAE or a business owner based outside of the UAE) to obtain a UAE residency visa to live and work from the UAE. Such an individual can obtain a one-year UAE residency visa through the Dubai Corporation for Tourism and Commerce Marketing. In order to obtain such a UAE residency visa, the individual will be required to satisfy certain requirements such as submission of an employment contract with the foreign employer and having a minimum monthly salary of USD 5,000.

 

Considering that there is no personal income tax in the UAE, there are minimal consequences for any individual who wishes to live and work from the UAE. Subject to the tax laws of the home jurisdiction, such an individual may even be able to claim tax benefits in that jurisdiction.

Download inBrief as PDF