In 2018, The Economist explained the following in a piece with the following bi-line “An oasis for the tax-averse beckons in the Middle East”
More than 100 countries have signed up to the Common Reporting Standard (CRS), which requires them to swap information on account-holders that may be relevant for tax purposes. But the enterprising and tax-shy can still exploit loopholes in the system. A popular one is to procure residence in the United Arab Emirates (UAE), set up a company there and use the tax residence that comes with it to block the flow of information to tax authorities elsewhere. … Under the CRS (which is managed by the Organisation for Economic Co-operation and Development), banks must share information with the country where an account-holder is tax-resident. If the account holder is an entity, then the bank must look through it to the “controlling person” and report on that individual. In the UAE, since both the individual and the company have local tax residence, neither need fear having any information passed on to other countries, regardless of whether their money is held in a bank account, a trust or an investment fund.
Add to this that the UAE is largely tax-free and is likely to have to remain ‘mostly’ tax-free to retain its advantage over Saudi Arabia.
📕 “Oasis for the Tax Adverse” →
References
Crisp, J., & Corfe, O. (2023, December 9). Inside the luxurious lives of the Russians of Dubai. The Daily Telegraph. https://www.telegraph.co.uk/world-news/2023/12/09/inside-the-luxurious-lives-of-the-russians-of-dubai/
The Economist. (2018, September 27). Sweet deserts. The Economist, 428(9111), 58. https://www.economist.com/international/2018/09/27/how-the-united-arab-emirates-became-an-oasis-for-tax-evaders
Troianovski, A. (2023, March 15). ‘Russia Outside Russia’: For Elite, Dubai Becomes a Wartime Harbor. New York Times. https://www.nytimes.com/2023/03/13/world/europe/russia-dubai-ukraine-war.html