The co-founder of Revolut, has reportedly become the latest entrepreneur to leave the UK and become a tax resident in Dubai.
There are a host of countries offering perks for people who want the freedom to work and travel; but Dubai is becoming the destination of choice for UK founders to make home.
The latest high-profile move is Nik Storonsky, the co-founder of Revolut. This week, it was reported that Storonsky has left the UK and now lists Dubai as his primary residence.
While there are plenty of options for digital nomads around the world, the tax regime and luxe lifestyle in Dubai seems to be attracting high net worth individuals; as well as ambitious founders.
Why are entrepreneurs leaving?
The key reason for many, according to Forbes, is the Government’s decision to scrap special tax privileges for non-domiciled residents in April. The loophole allowed these residents (whose domicile or home is another country) to avoid UK taxes on overseas earnings for up to 15 years.
In June, Bloomberg reported that the move had sparked an exodus of wealthy individuals from the UK. The news company analysed five million company filings and said that 4400 business leaders had disclosed an overseas move in the last year.
It adds that the projected pace of moves could see the UK “lose thousands of jobs and as much as £12.2bn ($16.5bn) over the coming four years”.
The Government, and some experts, are suggesting this is a gross exaggeration and official figures of the number of those who have left will be published in 2027. The Government says that, instead, the closing of the loophole will bring about £33bn in extra taxes.
Startups magazine has also detailed the fall-out from the Government’s decision to increase capital gains tax (CGT) on the sale of business shares to 14% on their first £1 million of exit cash. This will rise to 18% in April 2026.
Storonsky is Russian by birth but now holds dual British and French nationality. His issue is mooted to be the licensing issues he has faced in the UK when trying to win its UK banking license.
What does Dubai offer?
There are other European nations attracting disgruntled entrepreneurs – Cyprus and Monaco among them – but Dubai has a specific appeal.
First of all, there is no personal income tax and corporate tax is also considerably lower than the UK. Businesses pay 9% tax on profits exceeding AED 375,000 (which is around £80,000). Dubai, though, has “free zones”, where the corporate tax rate is 0% on qualifying income.
The state also offers a host of incubator and accelerator programmes, as well as a Golden Visa scheme for long term residence. This reflects Dubai’s bid to diversify away from fossil fuels into sectors like real estate, retail, logistics, and tourism. As a result, there is a burgeoning startup community with entrepreneurs attracted from all over the world.
There are downsides to life in Dubai though. Says one founder in a LinkedIn post, the city can be hyper-competitive for jobs; has expensive office space; a lack of work/ life balance and the cost of education and health facilities can be very high for expat families.
What are the tax implications of moving to Dubai?
For founders considering a move, the paperwork from the UK tax side isn’t onerous, says barrister Patrick Cannon, who has a pretty negative view of life in the UK at the moment.
Founders need to complete and submit the Form P85 online or can use the residence section of their tax return using the supplementary pages in Form SA 109.
Once a resident in Dubai, founders will not be liable for UK income tax but they will be liable for any income “sourced in the UK”. Some income can be protected if covered by the UAE/UK Double Tax treaty.
There are also implications for inheritance tax; but only if you have been a UK tax resident for fewer than ten years out of the last 20 years. If not, the usual UK taxation rules apply.
If you are considering a move, reach out to a tax advisor for professional advice; and consider your plans for your business in both the short and long term to weigh up the benefits and disadvantages.
