Vietnamese Business Owners: How to Legally Avoid High Tax Burdens by Moving to Dubai

Running a business in Vietnam, many owners especially encounter the difficulties of high taxation, which eats into their profits. The corporate tax, personal income tax, and the costs of compliance restrict the amounts available for the entrepreneurs to reinvest. This is why an increasing number of owners of business houses from Vietnam are considering Dubai as a smarter alternative. With its 0% tax on certain profits, an easier company setup process, and strong international business credibility, Dubai offers a clear legislative framework for lowering tax burden while expanding internationally. This blog explains how the tax framework of Dubai can help Vietnamese entrepreneurs secure income and achieve sustainable growth.

Understanding Vietnam’s Current Tax Burden

Before talking about the advantages of Dubai, the tax situation in Vietnam should be understood. Tax burdens are a development encumbrance for many Vietnamese entrepreneurs as well as their profits. For business owners to understand why Dubai seems like a better opportunity, it is important to know how corporate and personal taxes apply. Currently, the tax regime in Vietnam is as follows:

• Corporate Tax Rates in Vietnam

Currently, profit-making corporations in Vietnam are liable to a standard corporate income tax (CIT) at a rate of 20 percent. Certain business sectors may have incentives, such as a lower CIT rate of 10 percent or 17 percent on specific projects and selected regions, but most businesses are categorised under the 20 percent CIT rate. Above this direct tax, companies fall under indirect taxes, including Value Added Tax (VAT) at 10 percent, import/export, and sector-specific levies. Hence, any business owner wishing to reinvest profits will have less available capital due to the incidence of these taxes.

• Personal income tax implications for business owners

The corporate taxes are, however, not the only consideration for Vietnamese business owners. Alongside corporate taxation, the Vietnamese business owners must also take into account the personal income tax (PIT). For residents, PIT is progressive and ranges from 5 to 35 percent at different income levels. Even the returns from investments such as dividends would be taxable as well, thus increasing the burden. Non-residents will be taxed instead of a flat rate of 20 percent on income derived within Vietnam. This dual pressure-corporate and personal tax-makes it really difficult for entrepreneurs to amass the wealth they want and expand their enterprises globally.

Dubai’s Tax Framework in 2025

Dubai builds its tax system as a model where a global entrepreneur can establish and run a business with fewer financial burdens. The rules are very simple and transparent, really aimed at driving growth while remaining competitive with the rest of the major markets.

• Tax-Free Profits: Up To AED 375,000

Dubai’s friendly tax regime really favors small and medium enterprises. Profits up to AED 375,000 are completely exempt, so that entrepreneurs can reinvest profits into expansion without worrying about corporate tax at this time.

• 9% Corporate Tax Beyond Breakeven Threshold

A regular 9% corporate tax applies once profits cross AED 375,000. This is still considered highly competitive compared to Vietnam and other markets around the globe, making Dubai a suitable site for scaling businesses.

Legal Pathways for Vietnamese Entrepreneurs

For Vietnamese business owners who want to establish a base in Dubai, they will be required to follow legal steps that are clear and definite. Choosing a good structure, registering with the Federal Tax Authority (FTA), and complying with substance laws can ensure that your firm runs smoothly and avoids penalties.

• Business Structures Available in Dubai

An entrepreneur can register themselves as a Free Zone Company, a Mainland Company, or an Offshore entity. Free Zone setups usually attract many business minds because of the tax benefits they provide with full foreign ownership, while Mainland companies provide flexibility for trading across the UAE. Offshore structures can be used for holding assets, but trade activities cannot be carried out within the country.

• Federal Tax Authority Registration

Every business in Dubai is required to have a Tax Registration Number (TRN) by registering with the Federal Tax Authority. This is primarily for the purpose of corporate tax filing, VAT compliance (if any), and availing of the benefits of a double taxation treaty.

• Compliance with Substance Rules

To avail of Dubai’s tax incentives, it should be demonstrated that businesses have real operations in the UAE. Such as having an office space, hiring employees when needed, and maintaining financial records. These substance rules are not for abusing tax benefits but are aimed at bringing Dubai in line with the rest of the world.

Building a Sustainable Business in Dubai

Dubai is the place for businesses with not only lower taxes but also long-term growth in a world-class country. Vietnamese entrepreneurs could resoundingly excel with proper structuring, capital planning, and compliance with regulations. Dubai rewards transparent and future-reinforcing businesses. It’s the combination of hard skills, such as financial planning, and soft skills, such as adaptability, that make turning opportunities into permanent successes possible for many entrepreneurs. For furthering your exploration on the subject, you can also consider reading our other guides on company setup in Dubai and free zone advantages.