UAE and Russia Tax Comparison for Entrepreneurs

Choosing a headquarters usually comes down to keeping costs predictable and profits intact, so it helps to compare how each government treats company earnings, investor returns and day-to-day spending. The United Arab Emirates and Russia follow very different models, and the contrasts become sharper once Russia’s 2025 reforms take effect.

Corporate Profit Taxes

The UAE applies a ladder system in which profit up to AED 375 000 is untaxed and anything above that is subject to a 9 percent corporate rate, while companies that meet UAE free zone license criteria can keep the zero rate on qualifying overseas income, a key draw for many founders. Russia, by comparison, maintains a 20 percent headline rate on profit for the current year, but a new law will raise this to 25 percent on 1 January 2025; small businesses may still choose a simplified regime that charges 6 percent of revenue or 15 percent of profit as long as they stay within the size limits.

Personal Income Tax

Employees in the UAE keep every dirham of their salary because personal income is untaxed, whereas Russia currently withholds a flat 13 percent on most earnings but will introduce a progressive scale in 2025, charging 15 percent on income above 2.4 million RUB, 18 percent above 5 million, 20 percent above 20 million, and 22 percent once earnings exceed 50 million.

Dividends and Capital Gains

Investors in the UAE pay no tax on dividends or share sales, making it easy to reinvest profits, while in Russia dividends are subject to a 13 percent withholding for residents and up to 15 percent for non-residents; capital gains generally follow the same rates, though securities held for more than three years can be exempt, encouraging longer-term investment.

Everyday Consumption Taxes

Goods and services in the UAE carry a flat 5 percent VAT, introduced in 2018 and still among the lowest globally, while Russia applies a standard 20 percent VAT and requires employers to make significant social contributions, which increase in line with payroll and can add considerable cost to hiring and operations.