The country’s favourable tax structures, banking centre status and ease of doing business make it an attractive destination for foreigners
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Jan 31, 2024
In a globalised world, dual citizenship is no longer a rarity but a choice many people make to broaden their horizons.
Dual citizenship refers to a legal status where a person is simultaneously recognised as a citizen of two countries. It can be acquired by birth, descent, marriage, naturalisation or by investment. That depends on the laws and regulations of the countries involved.
This status allows people to enjoy the rights and privileges afforded by each country. That includes the ability to live, work, study and gain access to social benefits in both nations.
Dual citizens or multi-locals are becoming more common thanks to an increasing interest in having dual and several citizenships. Greater tolerance by governments worldwide also helps.
In 1960, just one third of countries allowed dual citizenship, compared with 75 per cent in 2019.
As awareness around global citizenship grows, so is the world’s acceptance. Governments also offer clearer support through legal pathways.
The UAE, a pioneering country in dual citizenship, stands out among Middle Eastern countries as an attractive destination for foreigners to live in.
While dual citizenship was previously banned, the UAE permitted this by amending the Nationality Law in 2021. That allows foreign investors, professionals, special talents and their families to obtain citizenship under certain conditions. They must be nominated by the government or royal court officials.
It is also worth noting that Emiratis themselves are not permitted to hold dual citizenship.
The UAE government emphasised that this legislative adjustment aims to attract and retain people possessing specialised skills. That includes scientists, doctors, engineers and creative talents such as artists and authors, along with their families.
High-net-worth individuals (HNWIs) prefer jurisdictions such as the UAE. They want compliance with international standards. They also want favourable tax structures.
The UAE’s tax system stands out. It has no income or inheritance taxes. Corporate tax is a low 9 per cent. Double tax treaties with 139 countries offer relief. High-revenue corporations can offset foreign taxes against UAE corporate tax. That helps prevent double taxation.
The UAE has exceptional infrastructure. It also hosts many international banks with business-friendly services. That positions the UAE as a premier global financial centre. It supports business ventures and diverse financial products.
Moreover, as a leader in cryptocurrency and blockchain technology, the city has a well-regulated decentralised finance ecosystem. That solidifies this reputation further.
Succession planning is crucial for HNWIs. A recent survey by Swiss lender Lombard Odier makes that clear. Only 24 per cent of the Middle East’s ultra-wealthy have comprehensive estate plans for the next generation.
Succession planning in the UAE has significant advantages. There is no inheritance tax. That mitigates tax burdens for heirs. Financial free zones with robust legal systems enhance privacy and asset protection. Advanced trust and foundation laws also help. Wills can be registered in the Dubai International Finance Centre. Global assets can be included.
Preserving one’s cultural identity while integrating into a new society is a universal challenge for dual citizens.
Cultural ties, national pride and personal connections to each nation can create a complex interplay.
The UAE’s diverse cultural mosaic offers an ease in striking the right balance. It helps people understand both nations’ cultural, historical and social nuances.
Legal complexities can be a concern for dual citizens, where laws of two nations collide.
Dual citizens must engage legal professionals well-versed in international law. They need help navigating potential minefields. Resolutions must align with the laws of both countries.
As the UAE embraces dual citizenship, people who have embarked on this journey serve as beacons of insight.
Their experiences highlight the importance of actively managing loyalty, legal considerations, economic strategies and cultural connections.
As the nation evolves, these dual citizens provide a road map for others. Their experiences show a harmonious balance between two countries is possible.
Veronica Cotdemiey is chief executive of Citizenship Invest
