The Challenge
"Between the 25% corporate tax, a 15% withholding bite the moment I move dividends out, and roughly 36% gone before profit ever reaches me personally, running a business in Russia today means giving up more than a third of everything I build."
Business owners in Russia face a headline corporate tax rate of 25%, with no dedicated SME rate (only a limited 5% IT-sector carve-out) and capital gains taxed at the same 25% unless assets are held for five years. Outbound dividends are hit with a further 15% withholding tax, and Russia’s double-tax treaty network has shrunk to roughly 85 agreements, several of them suspended, making cross-border structuring harder than it used to be.
Our Approach
- Total tax to owner — Russia's combined corporate-plus-dividend load runs to roughly 36% before profit reaches the individual owner, against roughly 9% in the UAE (0% for free zone or Small Business Relief-eligible companies).
- Corporate tax rate — Russia taxes company profits at 25% flat; the UAE taxes at 9%, with 0% on the first AED 375,000 and 0% for Qualifying Free Zone income.
- Dividend withholding — Moving profit out of a Russian company costs a further 15% in withholding tax; the UAE applies 0% withholding on outbound dividends.
When we assess a move like this, we go parameter by parameter rather than headline rate alone: current entity structure, where economic substance will genuinely sit, the right free zone or mainland licence for the activity, and getting VAT and corporate tax compliance right from registration day one, not retrofitted later.
The Result
Structured correctly, a business relocating its trading or holding activity to the UAE sits at a 9% corporate tax rate, with 0% available on the first AED 375,000 of profit and full exemption for revenue under AED 3 million under Small Business Relief. Qualifying Free Zone income can be taxed at 0%, capital gains benefit from a participation exemption, and there is no withholding tax on dividends paid out to owners, meaning a far higher share of profit reaches the individual than in Russia. Annual compliance is rated LOW relative to Russia’s HIGH burden, and the UAE’s network of 140+ double-tax treaties gives considerably more room to structure cross-border income without double taxation.
The Takeaway
"The numbers favour the UAE clearly, but a real relocation needs genuine substance, the right licence, and residency planning done properly, not just a lower rate on paper."
