I've moved to Dubai, so my UK company has moved with me. Hasn't it?

A conversation we had last week with a business owner who relocated to the UAE this year and kept his UK limited company. Where a company is really taxed, why the treaty is not the safety net people think it is, and what to do about it.

At a glance

• A company incorporated in the UK stays UK tax resident, wherever its owner lives. Moving to Dubai does not move the company.
• If the important decisions are now being made in the UAE, the UAE can treat the same company as resident here as well. That means a UAE Corporate Tax registration and an annual return on top of everything in the UK.
• The UK and UAE treaty does not settle a company's residence with a formula. The two tax authorities have to agree between themselves, and that takes time and money you do not control.
• HMRC and the FTA both look at where decisions are really made, not at what the paperwork says.
• If you want the company to stay a UK company, the board has to keep meeting, deciding and minuting in the UK, and that has to be true rather than just written down.

I regularly have this conversation with business owners who have moved from the UK to the UAE and brought a UK limited company along with them. Sometimes it comes up in the first meeting. More often it comes up six months after the move, when the company's year end is approaching and something has started to feel a little untidy.

And I get it. You have moved your family, your home and your whole life to Dubai. It feels natural that the business you own has moved with you, and that HMRC's interest in it has faded along with your UK address.

Unfortunately it is rarely that simple, and the one thing I would ask you not to forget is this. A UK company is a separate person in the eyes of the law. Where it is taxed depends on where it was formed and where it is run from, not on where its owner happens to live.

Before you read on, do one thing. Think about the three or four biggest decisions the business has taken in the last twelve months. A new contract, a hire, a price change, a loan. Now think about where you were sitting when each one was made. That takes about two minutes and it tells you most of what you need to know.

So, the client. He runs a consultancy through a UK limited company that he set up about eight years ago. He moved to Dubai with his family in the spring, kept the company, and is still invoicing the same UK customers from here. He called because somebody at a networking event had told him he "didn't need to worry about UK corporation tax any more". Here is what we told him.

"I live here now, so the company is a UAE company. Isn't it?"

No. A company incorporated in the UK is treated as UK tax resident by the incorporation rule in the Corporation Tax Act 2009. That rule does not care where the shareholders live or where the directors live. The company stays inside UK corporation tax on its worldwide profits, and it still has to file accounts at Companies House and a corporation tax return with HMRC every year.

For the financial year starting 1 April 2026 the rates are unchanged. 19% on profits up to £50,000, 25% on profits over £250,000, and marginal relief in between. His company makes a profit of around £120,000 a year, which puts it at roughly £28,000 of UK corporation tax. That figure did not change when he boarded the plane.

"Then it doesn't matter where I run it from?"

It matters a great deal.

The UAE has its own view. Under the Corporate Tax Law here (Federal Decree-Law No. 47 of 2022, Article 11), a company incorporated outside the UAE is treated as a UAE Resident Person if it is "effectively managed and controlled" in the UAE. The FTA's guidance describes that as the place where the key management and commercial decisions for the business are made.

So take our client. He is the only director. Every decision about pricing, hiring, contracts and cash is now being made at his desk in Dubai. There is a strong argument that his UK company is effectively managed and controlled in the UAE.

If that is right, the company has to register for UAE Corporate Tax (the FTA's deadline for a company in this position is three months from the end of its financial year, with a fixed AED 10,000 penalty for missing it), keep records to the UAE standard, and file a UAE Corporate Tax return within nine months of each year end. Profits above AED 375,000 are taxed at 9%.

He had imagined his UK corporation tax bill disappearing. What had actually happened was closer to the opposite. He kept the whole of the UK bill and picked up a second tax authority.

"Surely the double tax treaty sorts that out?"

This is the question I get asked most, and the answer disappoints people.

For individuals, the UK and UAE treaty has a tie-breaker that works through a list of tests, so you can usually work out the answer for yourself. For companies it does not. Article 4(4) says that where a company is resident in both countries, the two competent authorities "shall endeavour to determine by mutual agreement" which country it belongs to. In plain English, HMRC and the FTA have to negotiate.

Until they agree, the company is not entitled to most of the treaty's benefits. There is no fixed timetable, the process is expensive to run, and you do not control the outcome. I would not want any client relying on it as their plan.

The treaty is a safety net with a very long drop. Far better never to need it.

"What are they actually looking at?"

HMRC and the FTA ask the same questions, and neither of them starts with the paperwork.

• Where are the board meetings held, and who is physically in the room?
• Where are the strategic decisions made? Not the day-to-day admin, the ones that shape the business.
• Who is exercising real control? Is it the board, or one person the board defers to?
• Are the directors genuinely deciding, or are they rubber-stamping something that was decided somewhere else?

The UK courts have taken the same line on this for over a century, and the recent cases have all gone the same way. A board that meets abroad but simply implements what the owner has already decided elsewhere does not move the company. HMRC won a Court of Appeal case on exactly that point in 2020. Flying in for a board meeting is not, on its own, enough.

The same logic runs the other way. A board that properly considers a decision and takes it, even acting on professional advice, is respected. That is the standard you are aiming for.

"So what do we do to keep it a UK company?"

If you want the company to stay clearly UK resident and outside the UAE net, central management and control has to stay in the UK, and it has to be demonstrable. For most owner-managed companies that means:

• At least one UK-based director with real authority, not just a name on the register.
• Board meetings held in the UK, with the important decisions taken at them rather than before them.
• Papers circulated in advance, and proper minutes that record what was considered, not only what was approved.
• Contracts, bank mandates and key approvals signed off by the board in the UK.
• The legal paperwork and the practical reality telling the same story. If the minutes say Manchester and your calendar says Dubai Marina, the minutes lose.

Let me show you what I mean with two versions of the same business. Both are composites and the details have been changed.

Version one. A consultancy owner moves to Dubai, but her business partner stays in Manchester as a director. The board meets in Manchester every quarter, she flies in for the two meetings a year where strategy is set, and the big decisions are taken and minuted there. Her day-to-day work in Dubai is delivering for clients. That company has a good, defensible case for staying UK resident and nothing more.

Version two. Our client. Sole director, sole shareholder, every decision made in Dubai, minutes written up afterwards from his laptop. Nothing in his paperwork matches where the company is really run from, and both tax authorities have a claim on it.

For him, the honest conversation was not about paperwork. It was about which of three roads he wanted to take. Put a real UK board in place and step back from running the company day to day. Accept that the company now belongs in the UAE and move it properly, which has its own UK exit rules and is not a quick fix. Or keep the UK company for what it does in the UK and build a UAE company for what he does here, with the two priced and documented properly between them. Each road has a different tax result and a different amount of admin, and none of them is reached by doing nothing.

"Does this work the other way round as well?"

Yes, and it is the version I worry about more. A Dubai free zone company run day to day from a sofa in Surrey, by a director who never quite finished leaving the UK, can be UK resident under the same central management and control test. The UK then taxes its worldwide profits, and any 0% free zone rate the owner was counting on becomes academic. Every company in your structure should have one intended home and a pattern of behaviour that supports it.

What this means for you

If you have moved to the UAE and kept a UK company, the question is not where you live. It is where the company is run from, and whether the paperwork and the reality agree. Do the two-minute exercise above. If the answer to "where was I sitting" is Dubai, please do not wait for a year end or a letter to prompt you. Corporate residence is one of those things that is very cheap to get right in advance and very expensive to argue about afterwards.

We went through all of this with the client who called. He has chosen the first road. A family member who already works in the business in the UK is joining the board, the company is putting a proper quarterly board cycle in place in the UK, and we are reviewing whether anything needs tidying up for the months since he moved. He came off the call knowing exactly what his company was, which is more than he knew when he dialled in.

Why we do this

We started Sterling & Hunter because we saw a gap in the market. People were not being looked after the way we wanted them to be looked after, and the way we would like to be looked after if we were taking a service ourselves.

If you are relocating to the UAE and keeping a UK company, or you already have and something in this article has made you pause, we would be delighted to review where you stand. You can reach us through www.sterlingandhunter.com.

This article is a general overview rather than advice. The client described is a composite and the details have been changed so nobody is identifiable. Whether these rules apply to you depends on your own facts, specific criteria apply, and you should take advice on your own position before acting on anything here. Rates and guidance are as at September 2026 (UK financial year from 1 April 2026 and the UAE Corporate Tax Law as it currently stands) and they do change. Last reviewed September 2026.

British Expertise. UAE Experience.

About the author

Kate Thorburn CTA ATT AAT is a Chartered Tax Adviser and a Director of Sterling & Hunter. She lives in Dubai and works with British entrepreneurs and families moving between the UK and the UAE, on both sides of the journey.