The ultimate post-bonus trade is leaving for a hedge fund in the UAE

If you're a senior trader at an investment bank in London and you've received your bonus for 2025, now is the time to secure an offer from a hedge fund in Dubai or Abu Dhabi. It's not just that you won't pay tax on future earnings while you're working there; you can also get an upfront payment that compensates for bonuses left on the table at previous employers, tax free.

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London traders making the move say the tax free buyout is the main incentive for going to the UAE at all. "When you move to Dubai during your garden leave period and the fund you join pays you an upfront bonus and buys out your previous pay, it is subject to taxes in your new resident country," says one senior hedge fund manager. 

Income taxes in the UAE are 0%. As long as you have tax residency in the country - which typically means staying there for a year, you benefit from this on your buyout.

"If you leave a bank and you have $2m in deferred, you can get it bought out tax free and have the vesting accelerated in Dubai," explains an ex-bank trader at a hedge fund in London. "It's why everyone wants to go there," he says. 

The same applies when you leave a hedge fund in London. If you're bought out for $20m by a hedge fund in Dubai or Abu Dhabi, it's all tax free. If you move to a fund in London, you'll pay $9m in tax.

The senior hedge fund manager says this makes moving to Dubai a no-brainer. "This is why the UK government is talking about imposing an exit tax," he says.

 The UAE's popularity with portfolio managers seeking to cash in is also why funds are increasingly obliged to open UAE offices. Citadel, for example, spent a long time without a Dubai office, but is finally opening in the UAE later this year. 

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