Opening a company in Dubai
while living in Spain.
Yes, it is legal. We explain when it makes sense, where every euro is taxed and what obligations you take on in Spain if you keep your tax residency there. With real cases and an honest analysis.
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Yes, entirely legal. A tax resident in Spain can incorporate and control a company in the United Arab Emirates. The key is not whether you can, but how and what obligations you take on.
Your Emirati company pays tax in the UAE (0% up to 375,000 AED, 9% above that). You, as an individual tax resident in Spain, pay tax in Spain on your worldwide income: salaries, dividends, capital gains. The Spain-UAE Double Taxation Treaty prevents paying the same tax twice.
The important thing is to avoid artificial structures. The Spanish tax authority looks at whether the company has genuine economic substance (office, staff, operations) and whether it is not merely a shell designed to avoid taxes.
Analyse my case →How to open your company from Spain
without relocating.
Eleven structured steps: from the initial tax analysis through to bank account opening and ongoing compliance in both jurisdictions.
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01
Tax diagnosis
We analyse your activity, tax residency and objectives. We validate whether Dubai is the right jurisdiction.
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02
Optimal structure
We choose between Free Zone, Mainland, Offshore or Holding based on activity, clients and relationship with Spain.
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03
Economic substance
We design genuine operations: office, staff and decision-making in the UAE to avoid problems with effective management.
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04
Commercial licence
We process the licence in the appropriate Free Zone and register the activity with the relevant authority.
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05
Effective management
We document that the company is managed from the UAE: board minutes, resolutions, commercial decisions, operational support.
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06
Investor visa
We obtain UAE residency visa (even if you do not live there permanently), useful for banking operations and certifications.
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07
Bank account
We open an account with UAE banks with a robust banking file (KYC, operational evidence, source of funds).
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08
UAE accounting
We establish accounting in UAE format: Corporate Tax, VAT where applicable, annual financial report.
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09
Obligations in Spain
We declare dividends, Form 720, controlled foreign company rules and possible CFC regulations.
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10
Tax residency certificate
We obtain an Emirati tax residency certificate to apply the Spain-UAE DTT and avoid double taxation.
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11
Ongoing compliance
Continuous support with renewals, CT returns and coordination with your tax adviser in Spain.
Where each item
is taxed.
Corporate taxation in Dubai
- Corporate Tax
- 0% up to 375,000 AED · 9% above that.
- QFZP
- Qualifying income at 0% where applicable.
- VAT
- Mandatory registration from 375,000 AED per year.
- No withholding
- On dividends, interest or royalties leaving the UAE.
Personal taxation in Spain
- Personal income tax on dividends
- 19–28% depending on the savings income bracket.
- Controlled foreign company rules
- Automatic attribution if the company earns passive income with low taxation.
- Form 720 / 721
- Mandatory declaration of assets/crypto > €50,000.
- Wealth tax
- Depends on region; applies to shareholdings in foreign companies.
When are you a tax resident
in Dubai and not in Spain?
Spain vs Dubai comparison
| Criterion | Spain | Dubai / UAE |
|---|---|---|
| Personal income tax | 19–47% progressive | 0% |
| Corporate tax | 25% general · 15% emerging SME | 0–9% federal |
| VAT | 21% general | 5% |
| Wealth tax | Yes, depending on region | No |
| Inheritance tax | Yes, depending on region | No |
| Tax residency | 183 days + centre of interests | 183 days + certificate + economic centre |
Common situations
we analyse.
Individual consultant.
International billing, tax residency in Spain. We analyse whether it makes sense to travel to the UAE, taxation on dividends and a potential future change of tax residency.
Employee with a side business.
Employee in Spain who wants to incorporate a company in Dubai for a parallel activity. We review employment clauses, CFC rules and declaration obligations.
International e-commerce.
Online store with global customers. We study VAT OSS, economic substance, permanent establishment and effective management to avoid reclassification in Spain.
Digital nomad.
Professional with an itinerant lifestyle. We plan a genuine change of tax residency to the UAE and an appropriate corporate structure, meeting the 183-day requirement.
Spanish-Emirati group.
Spanish parent company with an Emirati subsidiary or vice versa. We design dividend flows, royalties and intra-group services respecting transfer pricing rules.
Investor with Golden Visa.
Investor using the UAE Golden Visa as a residency anchor. We structure assets, companies and compatibility with declarations in Spain.
HQ for MENA.
Spanish company seeking a regional hub in the UAE for the Middle East and Africa. We analyse establishment, expatriate employees and comparative taxation.
Companies that should not
open in the UAE from Spain.
If all your clients, suppliers and operations are in Spain, the Emirati company will be a shell: the Spanish tax authority can reclassify it as a Spanish-resident company.
If you are the sole service provider and you reside in Spain, it is very difficult to argue effective management in the UAE. The tax authority may attribute the income to you.
Holdings with no employees or real office generating passive income (dividends, interest) may fall under controlled foreign company rules.
Arrangements where the Emirati company invoices you as a way to avoid personal income tax are routinely reviewed and sanctioned by the Spanish tax authority.
Below a certain turnover, maintenance costs exceed the tax saving. Better to consider a freelance licence or wait.
If the sole motivation is paying less tax, without any real activity or business rationale, the risk of reclassification is high.
How to demonstrate effective management
from the Emirates.
Economic substance
- Real office
- Not a flexi-desk. Dedicated space with effective presence.
- Staff in the UAE
- Qualified employees carrying out day-to-day operations.
- Decision-making
- Board meetings and key decisions documented in the UAE.
- Operating expenses
- Consistent with the activity: rent, payroll, utilities.
Coherent billing
- International B2B
- Clients outside Spain, clear and traceable contracts.
- Digital B2C
- Global platform with reach beyond Spain.
- Transfer pricing
- Arm's-length prices in transactions with Spanish entities.
- Documentation
- Master file, local file and country-by-country where applicable.
Advantages of LorcaBase
for entrepreneurs in Spain.
We know both systems. Spanish-Emirati team with offices in Dubai and direct collaboration with tax advisers in Spain for a 360° view.
Bilateral perspective
We analyse your case under both Emirati and Spanish regulations simultaneously. No surprises with the Spanish tax authority or the UAE FTA.
Honest assessment
If your case does not fit, we tell you. We only incorporate when there is genuine business rationale behind it.
Structure with substance
We design operations with an office, staff and decision-making in the UAE to mitigate the risk of reclassification.
Official certificates
We obtain the annual Emirati tax residency certificate to apply the Spain-UAE DTT correctly.
Coordination with your adviser
We work alongside your tax adviser in Spain: Forms 720/721, dividends, CFC rules, transfer pricing.
Native Spanish
All communication, contracts and documentation in Spanish. No language barriers or administrative misunderstandings.
Related structures.
Free Zone company.
Standard structure in a free zone with 100% ownership and an attractive tax regime.
Discover → IX · HoldingHolding structure.
Emirati parent company that efficiently consolidates Spanish and international subsidiaries.
Discover → VI · OffshoreOffshore company.
Lightweight vehicle for international trade or asset holding, without local operations.
Discover → IV · TaxationCorporate taxation.
Comprehensive tax planning with a Spanish-Emirati focus: CT, VAT, DTTs, CFC rules.
Discover →What people ask us most.
Is it legal to open a company in Dubai while living in Spain?
Yes, it is entirely legal. A tax resident in Spain can incorporate a company in the UAE provided they comply with their tax obligations: declaring dividends, applying controlled foreign company rules where applicable and filing Form 720/721.
Where do I pay taxes?
The company pays tax in the UAE on its activity (Corporate Tax). The entrepreneur, if tax resident in Spain, pays tax in Spain on their worldwide personal income, including dividends received from the Emirati company. The Spain-UAE Double Taxation Treaty prevents paying the same tax twice.
When is someone considered a tax resident in Dubai?
When they spend more than 183 days per year in the UAE, have their centre of economic interests there and hold a UAE tax residency certificate. In Spain, tax residency is lost after meeting these criteria and filing Form 030.
What is exit tax?
The Spanish exit tax applies to those who cease to be tax residents while holding significant shareholdings. It taxes the latent capital gains on those shareholdings at the point of the change of residency.
What are Form 720 and Form 721?
Form 720 declares assets and rights held abroad exceeding €50,000. Form 721 declares cryptocurrencies held abroad. Both are mandatory for tax residents in Spain.
The trust of those who already
work with us
Your company in Dubai
without changing your life
in Spain.
Book an initial consultation with no commitment. We will assess your case honestly and tell you whether the structure makes sense, what tax costs it involves and how to set it up correctly.
Book a consultation →