When we talk about Dubai dividends, we mean how entrepreneurs can legally distribute their profits from business conducted in the UAE without paying tax.
Dubai remains one of the most attractive jurisdictions for those pursuing international tax optimization, due to its modern legal framework and the absence of taxes on dividends, capital gains or personal income.
For Romanian company owners, this tax regime offers the freedom to reinvest or withdraw profits in conditions of transparency and compliance, without the burden of double taxation.
This guide explains the difference between profit, dividends and payroll, how dividends are legally distributed, the conditions under which Free Zone Dividend Tax applies, and how you can withdraw your company's profit tax-free, following local rules.
What do dividends mean in the context of a Dubai firm
Dividends represent the portion of the company's net profit distributed to shareholders after the close of the financial year. In Dubai, the term “dividends” is regulated by the corporate legislation of Free Zones, and the conditions may vary slightly depending on the area in which the company is registered.
For Free Zone firms, the general rule is simple: after all expenses and accounting obligations are covered, the remaining profit can be distributed in full to shareholders, without withholding any local taxes.
Accordingly, Dubai dividends = 0% profit withdrawal tax, both for resident individuals and parent companies in other jurisdictions.
How to calculate the profit from which dividends can be paid
Before distributing dividends, the firm must complete the annual accounting closing. According to IFRS (International Financial Reporting Standards), profit is calculated as:
Net profit = total income — deductible expenses — possible losses carried forward.
Only the profit declared and confirmed by the balance sheet can be distributed in the form of dividends. Firms that have international activity, without sales in the Emirates, remain in the category with 0% corporate tax, which means that the entire profit can be legally withdrawn by shareholders.
Dividend Dubai vs. Salary — which is the most advantageous option
One of the most common questions received from Romanian entrepreneurs is whether it is more efficient to withdraw money in the form of salary or dividends.
The main differences:
• Salaryis considered an operating expense, deductible for the firm. It can be paid monthly and requires a residency visa and local employment contract.
• Dividendsrepresents the profit distributed after the close of the financial year. They are not deductible, but not taxed in Dubai.
For small and medium-sized companies, the optimal option is combined: a reasonable salary for residence and current activity, supplemented by dividends at the end of the year, without additional fees.
This structure provides balance between tax compliance and maximization of personal profit.
Dividend Tax Free Zone — how it works in 2025
In 2023, the United Arab Emirates introduced for the first time corporate tax, i.e. corporate tax, applicable only to companies that exceed the threshold of 375,000 AED (about 90,000 euros annually).
Important to note: this tax does not apply to dividends distributed to shareholders, but only to the taxable profit of the company.
Thus, the current situation is as follows:
• Profit up to 375,000 AED→ 0% tax.
• Profit over AED 375,000→ 9% tax on the difference only.
• Dividends→ 0% tax, regardless of value.
Companies registered in the Free Zone that do not operate in the UAE domestic market remain completely exempt from the Free Zone dividend tax, even if they generate high profits internationally.
What conditions must be met for the distribution of dividends
Although the tax regime is extremely advantageous, the UAE authorities require a minimum accounting compliance to allow dividends to be withdrawn:
1. The company must have a valid commercial license.
2. There must be annual financial statements or interim balance sheet.
3. Distributed profit must come from authorized and declared activities.
4. All documents (decisions of shareholders, extracts, accounting reports) must be kept for at least 5 years.
In many Free Zones (IFZA, DMCC, Meydan, RAKEZ), the approval of the distribution of dividends is made internally, through a decision digitally signed by the main shareholder, without further formalities.
Dubai Dividends - Practical Examples
1. International IT firm in IFZA:
A company from Romania, relocated to IFZA Free Zone, invoices services to customers from Europe. The annual profit of €100,000 is tax-free and the shareholder withdraws it in full in the form of Dubai dividends — no taxes and no withholding at source.
2. Ecommerce Company in Dubai CommerCity:
It sells products exclusively to customers in the EU and the USA. Applicable VAT = 0%, corporate tax = 0%, and profits can be withdrawn in full as dividends.
3. Holding in Square Free Zone:
He owns stakes in other companies. Dividends received from international subsidiaries are non-taxable and those redistributed to final shareholders remain at 0% tax.
Dubai Dividends - Tax Benefits
Compared to Romania, where dividends are taxed at 16% from 2026, plus CASS, the UAE system offers complete tax freedom.
Main benefits:
• 0% tax on dividendsin all Free Zones;
• 0% Capital Gains Tax;
• No double taxation, due to international treaties;
• Free transfersof profits in foreign currency;
• Financial confidentialityand little transparency towards the EU.
For entrepreneurs working globally — consulting, IT, ecommerce — the structure with a firm in the Free Zone and dividends Dubai is one of the most effective forms of tax remuneration.
Recommendations for Romanian entrepreneurs
To ensure that the distribution of dividends complies with all legal requirements, it is recommended that you:
• work with a licensed local accountant;
• maintain complete financial records in accordance with IFRS;
• keep all withdrawal documents in digital format;
• you get a simplified audit every year, if the Free Zone requests it.
Thus, you can withdraw the company's profit without risks of non-compliance and with quick access to international accounts. If you want to understand all the possible structures for your company, see also our complete guide on setting up a business in Dubai.
The Dubai dividend system is one of the most favorable in the world. The UAE offers a unique combination of 0% corporate tax up to AED 375,000 and 0% tax on dividends, which makes companies registered in the Free Zone remain the most advantageous option for Romanian entrepreneurs.
If you want to find out how to properly structure the distribution of profits and the legal withdrawal of dividends without tax, contact the team Dubai Business Arena.
We offer full tax optimization consulting so you can maximize your business results in 2025.
