Dubai Comes out on Top in the Battle of the Tax Havens
Dubai vs Monaco is a battle of the old world against the new. Europe’s oldest tax haven, vs a city sprung out of the desert in the last 40 years.
Monaco is the last remaining zero tax haven in the old world. It’s a historical anomaly. It’s never had income taxes. It’s a great place to live and be left in peace, insulated from at least some of the madness of the surrounding European Union. Dubai, part of the United Arab Emirates, is a new city that’s sprung up over the last 30 years. Dubai has never had an income tax either. Despite some restrictive laws and a less well advanced legal system it beats Monaco in many areas.
Here are some of the advantages Dubai has over Monaco:
Both locations offer straightforward and established procedures to get residency there. Dubai’s process can be a bit more straightforward. You can establish a company in Dubai and use that to get residency. There are other methods but that is the simplest. Monaco relies on you proving that you can live there without working by providing a letter from a Monaco bank. This depends on you making a deposit with a bank in Monaco. The Monaco government doesn’t define a specific amount that you have to prove. that’s up to each bank.
Banking is Easier
Monaco banks are regulated by the French central bank. Due diligence the responsibility of the individual banker who can be held personally responsible for opening accounts for clients who turn out to be criminals. That makes the account opening procedures in Monaco more strict than they are in Dubai.
Starting a Business is Encouraged
Dubai is a modern city state. They encourage people to start new businesses there. Due to space limitations in Monaco, new businesses are not really encouraged. Businessesin Monaco are not tax free for trading outside Monaco either so it’s not really an ideal place to set up a business, even if the Monaco authorities give you a license to trade there.
Few Extradition Treaties
The United Arab Emirates, which Dubai is a member of has few extradition treaties. They have, in the past, been reluctant to extradite those wanted for white collar crimes. Notably, Dubai does not have an extradition treaty with the United States.
Can’t Be Closed Down by Strong Neighbour
France has threatened to close down Monaco in the past. French territory surrounds Monaco and they control the power and the water. All senior government positions in Monaco must be held by French citizens. Although Monaco is the last remaining zero tax haven in Europe and has its own Royal family and government it can be controlled by the French. The UAE/Dubai is an independent nation and not subject to such influences.
Dubai has More Space
Monaco has very few houses. Most Monaco residents live in high rise apartments. Dubai also has many high rise apartments but modern mansions are available for those who want them. Dubai also has its own mega-malls and other attractions. Dubai has the space to do anything you want without leaving its territory.
Cheaper Real Estate
Monaco has the most expensive real estate in the world. A modest apartment can cost more than 10m. If you wanted to spend the same in Dubai you’d be able to buy a significant house.
Better Communication Links
Dubai has a key airport hub. Many flights between Europe and Asia stopover there. You will find daily flights to almost anywhere in the world from Dubai’s airport. Monaco, on the other hand, does not have its own airport. Travellers to and from Monaco will fly to Nice in France.
Lower Sales Tax in Dubai
Dubai has a sales tax of only 5% compared to Monaco’s VAT rate of 20%. Monaco historically got most of its revenue from the casinos. Nowadays, however, the majority of the revenue for Monaco’s government comes from the VAT which is charged at the same rate as France. It’s a pity that sales tax was introduced in Dubai in 2018 but the much lower rate leaves it the clear winner in the sales tax category of Dubai vs Monaco.
No War Sanctions
Monaco, being surrounded by the EU and French territory was obliged to impose the same sanctions a the rest of the EU against Russia and take the same position as France. Dubai, having more independence, has become somewhat of a haven for rich Russians and Ukrainians. The UAE has not taken sides in war and have maintained a neutral stance.
Dubai vs Monaco is an interesting question. Both are zero tax havens for individuals. Both have many advantages and can be great places to live. We are big fans of both jurisdictions. The UAE is introducing a corporate tax in June this year so it’ll no longer be a tax haven for companies. Monaco also taxes companies. Dubai has the edge in 2023 but some people will still prefer the old world glamour of Monaco and the French Riviera to the glitzy new world of Dubai.