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The absence of personal taxes and corporate flexibility make this country an ideal place to establish a company. One of the most common questions among those starting their activities in the UAE is: Can I get whatever salary I want? In this article, we explain all the key aspects of salaries in the UAE, the recommended limits and the ways to pay yourself legally and efficiently.
Yes, as the owner or director of your company in United Arab Emirates, you can set the salary that you consider appropriate for you and your employees. However, there is a limit that should not be exceeded, which is AED 500,000 per year (approximately €10,000 per month). Exceeding this figure is not illegal, but it could result in a review or requirement for justification by local authorities.
To avoid problems, if you exceed that threshold, it is advisable to have documentation that justifies your salary based on similar roles in the Emirates labor market.
The way to pay your salary will depend on the type of business license you have (Mainland, Offshore or Free Zone) and, in the case of a Free Zone, the specific jurisdiction where your company is registered will also influence. Let's look at the two examples of the best-known Free Zones:
IFZA, one of the most popular and flexible free zones in Dubai, allows you to pay salaries through an employment contract, which is issued automatically when you set up a company. You can set the salary you consider reasonable within that contract and proceed to pay yourself directly from your business bank account.
In more regulated free zones such as DMCC, it is mandatory that the payment of salaries be made through the Wage Protection System (WPS). This system records that employees receive the full agreed wage and protects their rights.
El Wage Protection System (WPS) is a system implemented by the Ministry of Human Resources and Emiratization (MOHRE) to ensure that workers in the UAE receive their salaries in a safe and transparent manner. Some free zones, such as DMCC, require that salaries be paid exclusively through WPS.
⚠️ Important: Not all banks in the UAE are authorized to operate with the WPS system. Before opening your company's bank account, verify that it's compatible if your free zone requires it.
If you want to assign yourself an annual salary of more than 500,000 AED, you can do so, provided you have the appropriate justification (for example, professional experience, comparison with other salaries in the sector, responsibility in the company, etc.).
In addition, there is another very efficient way to obtain income without having to justify a high salary: the distribution of dividends.
Once the annual accounts have been submitted and if the company has generated profits, you can distribute unlimited dividends. This option is totally legal and does not require going through WPS or justifying the amount as if it were salary.
At Gestoria Ibérico, we are specialists in accounting, taxation and company incorporation in the UAE. If you need help with salaries, dividends or business management, contact us and we'll be happy to advise you.
