An Australian company stays an Australian tax resident wherever its owners live, so moving the business to Dubai means deciding what stays in Australia, what moves to a new UAE company, and on what terms.
The Pty Ltd does not move with you
A company incorporated in Australia is an Australian tax resident under the first limb of the residency test, wherever its shareholders and directors live. It keeps paying Australian company tax on its worldwide profits, lodging returns and meeting its ASIC obligations after you move. There is no mechanism for migrating an Australian company to the UAE.
The director and public officer rules
Section 201A of the Corporations Act requires a proprietary company to have at least one director who ordinarily resides in Australia. If you are the only director and you move to Dubai, the company needs a new Australian-resident director, and that person takes on real duties and liability. The company's public officer for tax purposes must also ordinarily reside in Australia. Every director, including you, still needs a director ID.
Getting the profits out
Once you are a non-resident, dividends from the company are taxed in a different way. Franked dividends carry no Australian withholding tax. Unfranked dividends are subject to 30% withholding because there is no tax treaty to reduce it. Interest you charge the company on a loan attracts 10% withholding. Salary for work you do from Dubai after you have left is generally not Australian-sourced income, but the company's deduction and the arrangement itself need to be on arm's length terms.
Four ways to structure the move
Keep the Pty Ltd for Australian customers
The Australian company keeps serving its existing market, and a new UAE company takes on new markets and regional work. The two companies deal with each other under written intercompany agreements priced at arm's length, which both the ATO and the UAE Corporate Tax transfer pricing rules require.
Move the business or its IP to the UAE company
Selling the business, its customer contracts or its intellectual property to the UAE company is a disposal by the Australian company at market value. That can trigger CGT and, depending on what is sold, GST and stamp duty questions. Customer contracts usually need the customer's consent to transfer.
Put a UAE holding company on top
Transferring your shares in the Pty Ltd to a UAE holding company is a disposal by you. Whether it is taxed in Australia depends on your residency at the time and on what the company owns, so the timing against your departure date matters.
Sell or wind down before you leave
For some owners, selling the business or winding the company up while still resident is simplest, particularly where small business CGT concessions may be available. Their conditions need checking against your departure date before you decide the order of steps.
Staff and contracts in Australia
Australian employees stay under Australian employment law and the Fair Work system even if you manage them from Dubai. Leases, finance and supplier contracts stay with the Australian company unless they are assigned with consent. Banks and lenders may also have views about a director moving overseas.
The UAE company has to be run from the UAE
Whatever structure you choose, the UAE company should make its decisions in the UAE. If you keep running it from Australia before you have left, it can become an Australian resident company; see owning a Dubai company while living in Australia.
Where Neo Legal fits
The Australian restructure runs through Cornwalls' corporate and tax lawyers and the UAE company through our Dubai team, so the share transfers, intercompany agreements and board processes are drafted once and agree with each other. Neo Finance can then keep the books for the UAE company. Start with our overview of moving to Dubai from Australia.
Frequently asked questions
Can I move my Australian company to Dubai?
No. A company incorporated in Australia remains an Australian tax resident and cannot be migrated to the UAE. You can keep it, restructure it alongside or under a new UAE company, or wind it down.
Can I remain a director of my Australian company from Dubai?
Yes, but a proprietary company must also have at least one director who ordinarily resides in Australia under section 201A of the Corporations Act. If you are the only director, you will need to appoint an Australian-resident director before or when you leave.
How are dividends from my Australian company taxed once I live in Dubai?
Franked dividends paid to a non-resident carry no Australian withholding tax. Unfranked dividends are subject to 30% withholding, with no treaty to reduce it. The UAE does not tax personal dividend income.
Will transferring my business to a UAE company trigger tax in Australia?
It can. A transfer of the business, its contracts or IP by the Australian company is a disposal at market value, and transferring your shares can be a disposal by you. Neo Legal and Cornwalls plan the timing against your departure date.
What happens to my Australian employees if I move to Dubai?
They stay employed by the Australian company under Australian employment law. Moving them to a UAE employer needs their agreement and new UAE employment contracts and visas.
This article is general information on the position at the date shown and is not legal advice. It is not tax or financial advice either: your position depends on your residency, your assets and your structures, so speak to us before acting on it.
