The UK government’s decision to overhaul its non-domicile tax status has sent ripples through the financial planning strategies of the nation’s wealthiest. Individuals will now see foreign income and gains become taxable after just four years of residence in the UK. Abu Dhabi now stands out as a competitive hub, solidifying its position as a global destination for high-net-worth individuals (HNWIs) and businesses.
The Change in the Non-Domicile Status
The UK has always been a haven for wealthy individuals from around the world, offering a special tax status known as “non- domicile“. This allowed non-UK residents to avoid paying taxes on foreign income. This system attracted affluent individuals from industries like banking and oil, as well as entrepreneurs seeking to establish business setup opportunities in the UK.
This is now being abolished in April 2025. The new rules will no longer allow non-domicle individuals to avoid taxes on foreign earnings. Instead, the country will implement a residency-based tax system. This means that high-net-worth individuals, including many from the Arab world, will now face increased taxes on foreign income, capital gains, and wealth. With the elimination of the non-domicile status, these individuals will face higher taxes on overseas earnings and assets, potentially altering long-term financial strategies, especially in real estate and investment, as well as influencing decisions around company formation and business setup in more tax-friendly locations like the UAE.
Why Abu Dhabi ?
Abu Dhabi provides immense benefits to entrepreneurs and HNWIs. The city is strategically located with world-class infrastructure, and a business-friendly environment which makes it a sought-after destination for investment and relocation. In addition to this, the UK’s latest tax changes are expected to further accelerate this trend.
The city has also seen many initiatives on sustainability and innovation, like Masdar City, which aligns with the global push towards green economies, attracting businesses in renewable energy, technology, and research sectors.
Additionally, the city benefits from zero personal income tax, competitive corporate tax rates, and forward-thinking policies. Abu Dhabi stands ready to attract a wave of affluent expatriates and investors seeking a more favorable tax regime.
How the UAE, particularly Abu Dhabi, is poised to benefit
- A Magnet for High-Net-Worth Individuals
The UAE already hosts a thriving expatriate community, with Abu Dhabi as a top destination for British elites. Abu Dhabi, with its unique appeal of modernity blended with tradition, could emerge as a quieter yet equally attractive alternative for those prioritizing luxury, privacy, and security. The emirate’s high standard of living, coupled with the absence of income tax, offers a compelling case for HNWIs looking to relocate
- Boosting the Real Estate Market
Abu Dhabi, with its expansive luxury developments, high-yield properties, and relatively affordable luxury real estate, is the ideal choice for investors seeking a stable, high-return market. - Expanding Abu Dhabi’s Business Landscape
Dubai is often seen as the go-to destination for business setup, but Abu Dhabi is quickly catching up with its strategic policies. The UAE’s allowance for 100% foreign ownership and ease of doing business reforms make it an attractive proposition for UK entrepreneurs and corporations facing higher tax burdens back home.The government policies and programs are also helping Abu Dhabi’s business landscape. Abu Dhabi’s focus on innovation and sustainability, through initiatives like Masdar City, aligns with the global push towards green economies, attracting businesses in renewable energy, technology, and research sectors. In addition to this the 100% foreign ownership and ease of doing business reforms make it an attractive proposition for UK entrepreneurs.
- Cultural and Economic Synergies
Abu Dhabi provides a unique mix of world-class infrastructure and cultural richness. Its growing arts scene, international events, and family-friendly environment make it an attractive destination for expatriates seeking a holistic lifestyle.
As the UK’s tax regime becomes less accommodating for its wealthy residents, Abu Dhabi stands as a beacon of opportunity. With its unparalleled quality of life and tax-friendly policies the emirate is well positioned to capture significant investment. Whether you’re looking for business setup services in Abu Dhabi, company formation in Abu Dhabi, or exploring the cost of setting up a company in Abu Dhabi, the emirate offers a low-cost and business-friendly environment with world-class infrastructure and seamless integration into the global economy. From visa services in Abu Dhabi, including the Golden Visa UAE, to VAT registration and tax accounting services, the city is equipped to support entrepreneurs and businesses at every step.
For businesses and individuals looking to navigate this transition seamlessly, BLZ serves as a trusted partner. From facilitating business setup in Abu Dhabi and Dubai, to managing residency requirements and ensuring compliance with trade licenses and business licenses in Abu Dhabi, BLZ ensures a hassle-free experience. Your vision, coupled with our expertise, makes success in Abu Dhabi not just a possibility but a certainty.