Dubai Fact-File Part 7:
Business Owner Welfare and Lifestyle

7.3 Dubai Offshore and International Pensions

Pension Portability: Given the absence of personal or corporate taxation in Dubai, there is no need for a foreign resident to consider the tax status of their pension scheme or of their contributions to it while they are living in Dubai.

Pension decisions will however need to be made in the light of existing savings arrangements and the likely future residential plans. If return to a high-tax jurisdiction is on the cards, then it would seem to be sensible to choose a pension structure which will maximize contribution deductibility in that jurisdiction. If on the other hand the future is likely to consist of long-term residence in Dubai or another low-tax jurisdiction, then the deductibility of contributions is less of an issue, and the choice of instrument can be made solely with a view to asset growth.

For UK nationals, a long period of residence in Dubai offers the prospect of a Qualifying Recognized Overseas Pension Schemes (QROPS) transfer. The flexibility of QROPS schemes represent a big advantage, allowing an individual to move from country to country without affecting the pension scheme. There is, additionally, no requirement to purchase an annuity at 75, and therefore the full value of a pension fund can be invested wherever the best return can be obtained, and a greater proportion of assets passed on to heirs. There are currently no QROPS funds available in Dubai, but there is nothing to prevent a expat business person (who has previously contributed to a UK scheme, but has now terminated their residence there) from transferring to a scheme based in one of the many countries that does provide QROPs, whilst resident in Dubai. For the first five years after transfer, the QROPS provider is obliged to report transfers and payments to HM Revenue and Customs, but after that period, the various tax benefits of the retirement scheme can be taken according to the rules of the country in which it is established (which are usually preferable to those in place in the UK!)