Portugal vs Cyprus, Malta & UAE Tax

Portugal's new IFICI regime (Tax Incentive for Scientific Research and Innovation) replaced the old Non-Habitual Resident (NHR) program in 2023. It applies a flat 20 percent personal income tax rate on employment and professional income earned in Portugal for 10 calendar years. Eligibility and Scope IFICI targets skilled professionals, innovators, and researchers.

You may need to: Establish tax residency in Portugal for the first time Not have been tax resident in Portugal in the previous five years Not have benefited from the old NHR regime Work for eligible employers (startups, technology centers, qualifying companies meeting IFICI criteria)

Apply by January 15 of the year following your first residency year Tax Benefits 20% flat rate on Portuguese employment and professional income Exemptions on foreign dividends, interest, rental income, and capital gains (if sourced from non-blacklisted jurisdictions and not remitted)

10-year duration from the start of tax residency No requirement to work exclusively in Portugal Limitations IFICI is narrower than the old NHR.

It excludes retirees, passive investors, and those earning purely foreign income. You may need to have genuine Portuguese employment in a qualifying sector. Many traditional high-net-worth individuals find IFICI unattractive compared to Cyprus or Malta.

Cyprus offers one of Europe's most aggressive tax incentive regimes: the Non-Domiciled Tax Status. Non-dom residents enjoy zero percent tax on dividends, interest, and most capital gains for up to 17 years.

How It Works Establish tax residence in Cyprus (typically 60 days per year) Declare non-domicile status (verified by tax authorities) Claim exemption from the Special Defence Contribution (SDC) on passive income Dividend income, interest, and most foreign-source capital gains remain untaxed Key Benefits Zero percent on worldwide dividends for 17 years Zero

percent on interest and most capital gains No inheritance tax, no wealth tax 50 percent employment income exemption (for new residents earning over €55,000 annually) 5 percent Special Defence Contribution on dividends for domiciled residents (much lower than previous 17%) Extension possible:

two additional five-year periods for €250,000 per period Limitations Requires credible non-dom declaration and evidence may need to establish genuine residency (183+ days per year or substance) Passive income from EU blacklisted jurisdictions is taxable Cyprus corporate-tax treatment should be verified against current-year law and Pillar Two implementation details EU substance requirements apply—typically may not be

purely passive investor with no connection Who It Suits Investors living abroad with dividend-heavy income structures, business owners who can remit dividends tax-free, and wealth preservation clients seeking long-term passive income shelter within EU jurisdiction.

Global Residence Programme (GRP) The GRP targets non-EU/EEA nationals seeking residency: 15 percent flat tax on foreign-source income remitted to Malta Minimum annual tax: €15,000 (covers the first €100,000 of remitted income) Foreign capital gains: potentially exempt if not remitted Foreign income not remitted:

not taxed in Malta Three-year initial commitment with annual renewal Corporate Tax Refund Mechanism Malta offers a transparent, EU-compliant refund system: Headline rate: 35 percent corporate income tax Trading income refund: six-sevenths refund → effective 5 percent rate Passive income refund: five-sevenths refund → effective 10 percent rate Distribution-based:

refunds claimed by shareholders when profits are distributed Legally vetted: approved by EU authorities and OECD standards Malta HQP (Highly Qualified Persons) High-income professionals benefit from: 15 percent flat rate on employment income derived in Malta Available to non-domiciled individuals Applies to qualifying executive and professional roles Limitations Remittance rule only applies

to foreign income; Malta-source income taxed at full corporate rate Corporate tax refund depends on proper structuring and distribution timing Foreign income may need to be genuinely foreign-source (not Malta-situs) EU substance rules require genuine residency and economic activity Who It Suits Investors with diversified foreign income streams, business owners structuring dividends through Malta

entities, and high-earning professionals seeking lower personal tax on Malta employment.

The United Arab Emirates imposes zero personal income tax and zero capital gains tax, making it one of the world's most tax-transparent jurisdictions. However, strict substance, reporting, and residency requirements apply.

Tax Benefits Zero percent personal income tax on salary, investments, and capital gains Zero percent wealth tax, inheritance tax, and gift tax 9 percent corporate tax on profits above AED 375,000 (approximately $102,000) as of June 2023 Golden Visa provides 10-year residency for investors purchasing property (AED 2 million+)

or entrepreneurs Treaty network: 193+ double taxation agreements covering major trading partners CRS and Reporting Obligations The UAE fully participates in CRS/AEOI (Automatic Exchange of Information): Financial institutions report account holder details, balances, and transaction summaries Tax residency certification required (CRS self-certification forms)

Information exchanged annually with all OECD participating jurisdictions including Portugal, Cyprus, Malta No secrecy: the UAE is transparent and compliant with international standards Economic Substance Requirements The Economic Substance Regulations (ESR) require: Companies in relevant activities may need to maintain adequate physical presence in the UAE Qualified employees, management office, and strategic decision-making conducted

on UAE soil Annual notification and economic substance reporting to regulatory authorities Non-compliance can result in entity deregistration and penalties Limitations and Reputation Considerations Substance is mandatory: genuine business presence required, not a mailbox jurisdiction CRS reporting: no banking privacy; all financial data shared with home country authorities Visa requirements:

residency may need to be maintained; failure can trigger tax residency loss and back taxes Perception risk: UAE tax benefits sometimes viewed skeptically by advisors in high-tax countries Source-based taxation: income sourced in UAE remains taxable regardless of personal residency Who It Suits Entrepreneurs relocating entire operations to the UAE, business owners with UAE-source

revenues, and individuals willing to genuinely relocate for tax optimization alongside lifestyle benefits.

Use this as a planning snapshot, not a filing rulebook. Verify each jurisdiction for the filing year.

Rates, thresholds, and program details are date-sensitive. Validate before any move or filing.

Why Jurisdiction Selection Matters Beyond Tax Rate Low-tax jurisdictions attract scrutiny. The European Union maintains a blacklist of non-cooperative tax jurisdictions updated twice yearly. OECD standards, BEPS (Base Erosion and Profit Shifting) initiatives, and CRS/AEOI automatic reporting have eliminated traditional secrecy jurisdictions. Cyprus, Malta, and Portugal are EU members subject to rigorous compliance standards.

The UAE is OECD-compliant and participates in CRS.

Substance Requirements: Not Optional All four jurisdictions require genuine economic substance: Portugal: real employment in a qualifying sector Cyprus: verified tax residency, credible non-dom claim, business operations Malta: genuine Malta residence, real business activity UAE: physical business presence, qualified staff, strategic management Offshore tax planning that ignores substance requirements invites audit, penalties, and treaty-claim denial.

Taxbordr advises clients on jurisdiction selection only after confirming that personal circumstances, business operations, and lifestyle genuinely align with residency and substance requirements. Reputation Risk in Your Home Country If you currently reside in a high-tax country (United States, United Kingdom, Canada, Australia, Scandinavia), relocating to a low-tax jurisdiction triggers automatic reporting under CRS.

Your home country's tax authority receives annual account and income reports. Relocation itself is not illegal—but filing obligations remain. Failure to disclose foreign accounts or residency changes constitutes tax evasion. Taxbordr's Position: We guide clients through lawful relocation planning.

We ensure tax filings are complete, voluntary disclosure is pursued if needed, and exit taxes are properly calculated. We do not assist with tax evasion or undisclosed structures.