What one senior tech executive in the UAE didn’t know about his US shares, and the risks revealed
Karim is a senior technology executive based in the UAE who has spent much of his career working for large international companies. He is smart, analytical and financially literate, far more so than most.
He was also sitting on a risk that could have cost his family up to $1.6 million. And like many professionals I meet in the UAE, he had not previously considered the potential implications.
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*This case study is based on a real client scenario. The client’s name, personal circumstances and other identifying details have been changed or generalised to protect confidentiality.
Written by Mauro De Santis Bo, Senior Partner at GSB.
How he got there
Karim never set out to build a $4 million-plus portfolio of US tech shares. It built itself.
Over the course of his career, a meaningful part of his remuneration had been awarded in company shares, primarily through restricted stock unit (RSU) schemes, alongside other employee share arrangements. Each year, more shares vested. And because US tech has had an extraordinary run over the last decade, the value of those shares compounded far faster than he was accruing them.
THE RESULT
By the time we met, more than $4 million of his wealth was concentrated in a relatively small number of US-listed technology companies.
Nothing about this was a mistake. This can happen gradually when company shares form a significant part of someone’s pay. The difficulty is that the risks of this default position are rarely visible until someone maps them out.
The trigger
Karim didn’t come to GSB worried about tax. He came because he and his family were considering their long-term retirement options and wanted greater clarity around whether their existing wealth could support their future plans.
It was during our fact-finding process, when we mapped out everything he owned and where it was held, that the real issues surfaced. What began as a retirement planning conversation surfaced issues Karim hadn’t been aware of.
The problem
- Single-stock concentration. The vast majority of his wealth depended on the fortunes of just a couple of companies. This also created a potential overlap between his employment income and investment wealth, increasing his overall exposure to the same companies and sector.
- Market and sector concentration. Even beyond individual names, everything sat in one sector (technology) in one market (the US). Technology-focused portfolios saw severe and prolonged falls in both the dot-com crash of 2000 and the 2022 downturn, a reminder of how quickly concentrated positions can be tested.
- Dividend withholding tax. As a UAE resident with no US tax treaty protection, Karim was losing 30% of every dividend to US withholding tax, a silent, recurring drag on returns, every single year.
- US estate tax. This was the one that stopped him in his tracks. US-listed shares are “US-situs” assets. If anything happened to Karim, everything above a $60,000 exemption would be exposed to US estate tax at rates of up to 40%, with the assets potentially frozen before his family could access them. On a $4 million holding, that is a potential liability approaching $1.6 million.
- No plan. Underneath it all, there was no structure connecting his wealth to his life: no cashflow model, no retirement number, no answer to “what is all of this actually for?”
THE HIDDEN EXPOSURE
On a $4 million holding of US-listed shares, a non-US person faces a potential US estate tax liability approaching $1.6 million, above an exemption of just $60,000.
The numbers at a glance
Company shares held via RSUs, options and growth | $4m+ |
US estate tax exemption for non-US persons | $60,000 |
US estate tax rate above that exemption | Up to 40% |
Potential estate tax exposure for his family | ~$1.6m |
US withholding tax on dividends for UAE residents | 30% |
Exemption a US citizen would enjoy by comparison (2026) | $15m |
US estate tax exposure after moving to Ireland-domiciled funds | Nil on the restructured portfolio |
*Figures are approximate, for illustration only, and based on rates and thresholds in effect at the time of writing. Tax treatment depends on individual circumstances.
What we did
Before recommending anything, we did the unglamorous work: a full fact find, a proper risk profiling exercise (RPQ), and detailed cashflow modelling across a range of scenarios: retiring in the UAE, retiring abroad, retiring earlier, markets behaving badly.
The modelling revealed something that changed the entire conversation. The analysis suggested that Karim’s existing assets were sufficient to support his stated retirement objectives under the assumptions modelled. Once you know that, holding a concentrated, high-risk, tax-inefficient portfolio stops being ambitious and starts being unnecessary.
Why keep playing for money you don’t need, with money you very much do?
On that basis, my recommendations were:
- Sell the US company share portfolio and redeploy it into a globally diversified, low-cost, evidence-based portfolio, thousands of companies across markets and sectors instead of a couple, built entirely with ETFs and funds domiciled in Ireland. That single design choice does two jobs at once: it may reduce or remove the US estate tax exposure, depending on the structure adopted, because Irish-domiciled funds are not US-situs assets, and the 30% dividend withholding he suffered holding US shares directly is roughly halved under the Ireland-US treaty, with no further personal tax for Karim as a UAE resident.
- A fallback for the shares he wasn’t ready to sell: where timing or sentiment made an immediate sale unattractive, the shares could be moved into an Ireland-based bond structure rather than sitting on a US platform, a wrapper that may mitigate US estate tax exposure and the withholding tax drag while he continues to hold them. If timing wasn’t an issue, hold it all on a Jersey-based investment platform. Jersey levies no tax on the platform, and the UAE levies no personal income or capital gains tax on Karim, so with the Irish fund structure dealing with the US side, his wealth now compounds in a tax-efficient, low-cost environment while he lives in the UAE, with the flexibility to support a future move abroad. A standing six-monthly discipline: Karim keeps accruing RSUs while he works, so twice a year we sit down, sell down the newly vested shares, and reinvest the proceeds into the same portfolio.
*These recommendations reflected Karim’s specific circumstances and objectives. They are not a recommendation for any other investor.
Did he act on it?
Yes, and the change was bigger than the spreadsheet suggests.
- Portfolio concentration was reduced.
- The recurring withholding tax drag was addressed.
- The seven-figure estate tax exposure hanging over his family was dealt with.
- And for the first time, every dirham and dollar he owns is connected to a goal: when he can retire, where, and on what income, whether that ends up being the UAE or somewhere else entirely.
But if you asked Karim what he got out of the process, I don’t think he would mention tax rates or asset allocation. He would say peace of mind. He told me the estate tax point alone, knowing his family would no longer face a potential seven-figure bill and a US legal process at the worst moment of their lives, was worth the entire exercise.
The part that surprised even him
Here is what stays with me about this case. Karim is a senior executive in one of the most sophisticated industries on earth. He had held these shares for years.
He had colleagues in exactly the same position on every floor of his building.
And yet, Karim told us, he had never heard US estate tax mentioned. Not by any of them. Not once.
THE COMPARISON
A US citizen holding the same shares would enjoy an estate tax exemption of $15 million. As a non-US person, Karim’s exemption was $60,000, unchanged for decades and not indexed to inflation.
The people with the least connection to the US are the ones the rules hit hardest
If you work in tech in the UAE and part of your package arrives as RSUs or options in a US-listed company, this is worth checking, because similar considerations may apply to other individuals holding significant US-listed shares. It doesn’t matter that you have never lived in the US, never worked there, and never plan to. If your shares are US-listed, the exposure may already be sitting on your family’s balance sheet, unseen until it is triggered at death.
The takeaway
Nobody plans to end up with $4 million in a couple of stocks, taxed by a country they have never lived in. It happens by default, one vesting cycle at a time. Fixing it, on the other hand, has to happen on purpose.
If any part of Karim’s story sounds like yours, RSUs quietly stacking up, wealth concentrated in your employer’s stock, no clear answer to whether you’re on track, the first step is simple. An initial conversation with a GSB adviser is free, with no obligation to go further.
Do you know what your US shares could cost your family?
If part of your wealth sits in US-listed shares or RSUs, a no-obligation review can help you understand any US estate tax and withholding exposure, and the options for addressing it.
Request Your Wealth Review
We work with a select group of internationally mobile professionals and families, typically with investable assets of $1 million or more. If that reflects your situation, we’d welcome a conversation.
Sources
- IRS, Estate tax for nonresidents not citizens of the United States (irs.gov): $60,000 exemption equivalent for non-US persons; US-situs assets, including shares of US corporations, are subject to US estate tax.
- IRS, Instructions for Form 706-NA / IRC §2001: graduated US estate tax rates of 18% to 40%.
- IRC §2104 / §2105: situs rules, shares of US-incorporated companies are US-situs; non-US registered funds (e.g. Irish-domiciled UCITS) are not.
- IRS Publication 515, Withholding of Tax on Nonresident Aliens: default 30% withholding on US-source dividends; the UAE has no income tax treaty with the US (IRS list, ‘United States Income Tax Treaties A to Z’).
- Ireland-United States Double Taxation Convention, Article 10: 15% withholding rate on US dividends paid to Irish-resident funds.
- One Big Beautiful Bill Act 2025 / IRS estate and gift tax pages: US citizen/domiciliary exemption of $15 million from 1 January 2026; the $60,000 non-resident exemption unchanged and not indexed to inflation.
- Revenue Jersey: no Jersey tax on income or gains for non-resident investors holding assets on Jersey-based platforms.
- UAE Ministry of Finance: no personal income tax or capital gains tax on individuals in the UAE.
Rates and thresholds are as at the time of writing and subject to change. Tax treatment depends on individual circumstances.
Disclaimer
This article is for general information purposes only and does not constitute financial, investment, tax or legal advice, nor a recommendation to buy, sell or hold any investment. GSB does not provide tax advice. Tax treatment depends on your individual circumstances, including your residency, domicile and citizenship, and may be subject to change in the future. The figures quoted are approximate, are based on rates and thresholds in effect at the time of writing and are provided for illustration only. Client details have been changed on a fully anonymised basis; outcomes described reflect one client’s specific circumstances and are not an indication of results others should expect. The value of investments can fall as well as rise, and you may get back less than you invest. You should seek advice from a qualified professional before acting on anything in this article.
This article is intended for UAE-resident individuals and should not be relied upon by persons in other jurisdictions without taking appropriate local advice.
GSB is a pending trademark of GSB Capital that is registered with the Dubai International Financial Centre (DIFC), license no. CL4377, and is regulated by the Dubai Financial Services Authority (DFSA) under license no. F006321. The registered address is Office 901, Floor 9, West Wing, The Gate, Dubai International Financial Centre, PO BOX 938542, Dubai, UAE. In respect of those activities GSB performs in or from the DIFC, the law applicable to these activities is that of the DIFC.