In 2025, Romanian entrepreneurs are faced with an increasingly common question: is it worth withdrawing dividends from a company in Romania or is it more profitable to have a company in Dubai? In a globalized economy, the location of your firm can mean the difference between losing 40% of your profit in taxes or collecting it almost in full.
This article compares how dividends are taxed in Romania and Dubai, how they can be withdrawn concretely and why Dubai is becoming the preferred option for entrepreneurs who want to optimize their income for tax purposes.
What are dividends and why does the tax regime matter?
Dividends are the portion of a firm's profit distributed to shareholders. Although they represent legal income and merit, their taxation differs radically from country to country. For the same profit, in one jurisdiction you can withdraw 100,000 euros, in another only 65,000 euros.
That is why, for any entrepreneur, it is essential to know exactly where and how dividends are charged.
Dividends in Romania (after July 1, 2025)
Starting in the second half of 2025, Romania applies a tougher tax regime for entrepreneurs, especially with regard to dividends.
What fees apply?
• Corporate tax: 19%
• Dividend tax: 16%
• Health Contribution (CASS): 10% of the legal ceiling, if the annual dividend income exceeds 39,600 lei (equivalent to 12 minimum wages)
How are dividends paid in Romania in concrete terms?
•The fiscal year ends and the balance sheet is drawn up.
•The net profit after tax (19%) is determined.
•The AGA is convened and the dividend distribution documents are drawn up.
•The 16% tax on dividends is withheld and paid.
•If the ceiling is exceeded, a CASS of 3,960 lei (for 2025) is also paid.
•Dividends are reported in the Single Statement and rotate from the firm's account to the personal account.
•Possible risk of ANAF inspection or recalculations if certain tax thresholds are exceeded.
Total tax consequence:
Taxes and contributions can reach about 40% of gross profit. In the end, the entrepreneur is effectively left with between 65% and 68% of the profit made.
Dividends in Dubai
Dubai, part of the United Arab Emirates, has a globally recognized tax regime for predictability and zero taxes on personal income.
What taxes are applied in Dubai?
• Corporate Tax:
- 0% for firms in the free zones that carry out external activity (outside the UAE) and have an annual profit of up to 375,000 AED (~95,000 euros).
- 9% applies only to the profit portion exceeding AED 375,000, and only if the income is not fully eligible (e.g. if the company has activity in the continental UAE or unqualified income).
• Dividend tax:
- 0% — No tax is paid on dividends distributed to shareholders, regardless of amount or residency.
• Social contributions (CAS, CASS):
- 0% — There are no compulsory contributions for health, pensions or social insurance, either for the company or for individuals.
How are dividends paid in Dubai concretely?
•No need to wait for the end of the fiscal year — you can distribute dividends at any time.
•No corporation tax is paid (under the conditions of the free zone regime).
•No dividend tax applies.
•No social contributions are paid.
•The transfer of money to the personal account is free, without limitations or tax obligations.
•There is no Single Statement or personal tax reporting.
•There are no personal tax controls on dividends.
Total tax consequence:
Withdraw 100% of the profit, no taxes. All money is available for personal use or reinvestment.
Comparative example: How much do you actually have left of a profit of 100,000 euros?
In Romania:
•Corporate tax (19%): 19,000 euros
•Remaining profit: 81,000 euros
•Dividend tax (16% of 81,000): 12,960 euros
•CASS (10% of the ceiling): 800 euros
• Total taxes: 32,760 euros
• Net profit receivable: 67,240 euros
In Dubai:
•Corporate tax: 0 euros
•Dividend tax: 0 euros
•CASS: 0 euros
• Total fees: 0 euros
• Net profit receivable: 100,000 euros
Difference: over 32,000 euros/year
Concrete advantages of the tax system in Dubai
•0% tax on dividends and profits (in free zones)
•No social contributions or hidden taxes
•No personal annual tax returns
•Minimal Bureaucracy and Predictable Legislation
•Access to bank accounts in AED, USD, EUR
•UAE Residency Visa Possibility
•Premium international image for your company
Who can open a business in Dubai?
Any natural person in Romania, regardless of tax residence or field of activity, can set up a company in Dubai, especially in a free zone. The procedure is simplified, but involves the right choice of license, legal structure and the right tax regime. To avoid administrative bottlenecks or costly errors, most entrepreneurs choose to work with consulting firms specializing in setting up and managing companies in the UAE, firms that handle all formalities — from licensing, to tax structuring and relationship with local authorities.
Where is it more profitable to receive dividends?
If you have a company in Romania, from 2025 you will pay more than 40% of the profit in taxes and contributions, just to withdraw what you yourself produced. Instead, Dubai offers you a tax environment where 100% of your profits can become 100% personal income, legally and without excessive red tape.
For entrepreneurs, in the current context, Dubai is only a luxury option — it is an effective tax strategy.
