Shocking Truth: Dubai's Luxury Ghost Towers & Looming Bankruptcy!

[BarleyMalt]

I have no idea about how their government work. But︊ I think that given their incompetence, the most efficient and cost-effective way for them would︋ have been to call Deloitte Intl., write them a decent check to figure out everything︌ in 2 months, and call it done. Instead, they were like headless chickens running around︍ for a year.

Regarding the rest, Shariah law is one thing, living in a dictatorship︎ with 0 rights is something else. You have a beef (or just a car accident)️ with a local, you can to prison, no lawyer, 0 rights.

Or could get 4‌ years of prison because you stepped on a microparticle of cannabis. Or because of stupid‍ policemen that think that your melatonin tablets are crack.
http://news.bbc.co.uk/2/hi/uk_news/7234786.stm
Or have a nervous breakdown⁠ and be murdered by the police in prison
https://www.dailymail.co.uk/news/ar...died-beaten-starved-Dubai-police-station.html
Or be jailed for life because⁤ the ruling family wanted to steal your prime real estate.
Or be jailed for life⁣ because you owe 1000$
https://archive.is/fohFK
All of those cases would not happen in the Western⁢ world. And even if you don't agree with the ruling power, usually you don't go︀ to prison (UK showed recently that it wants to be like the UAE though).

So, yeah, I mean for spineless zoomers and Russian IT freelancers with shaven buttholes and whose︁ reference is Putin's Russia, it may feel totally fine, but I wouldn't say that it's︂ such a great and free place.

 

[jafo]

Seems like you’ve done‌ a hairy deep dive into very personal and dark-hole research. 😳
Should we be concerned about‍ your field of expertise? 🙄

smi(&% rof/%

 

[BarleyMalt]

I actually‍ know a beautician who worked in Dubai and told me that she used to perform⁠ very often such treatment on various demographics, including the one mentioned in the post!

 

[LFGC]

The reality is︈ that almost all global tech is still centered in the US, UK, and China, not︉ the UAE, or any other similar centers. Little skilled talent is actually leaving. UAE is︊ still not even on the map in terms of global tech. If anything it is︋ mostly influencers, OnlyFans, Russians that are plagued by sanctions in their home countries and mostly︌ amateur entrepreneurs more so than any mega cap tech founders, engineers, and so on.

As an example, NYC alone has more VC funded digital asset companies than UAE does in︍ total. London is not far behind and has some of the largest and most well︎ known companies in the digital asset space. The gap widens even further when other industries️ are mentioned such as AI, semiconductors, and more all of which the US leads in‌ by miles and miles. Top talent world wide is still immigrating to the US for‍ nothing other than dollars, nobody cares about the faux freedom and democracy in the US.⁠ .

Simply put, talent, and capital do not care about progressive tax policies. It doesn't⁤ matter, founders, partners in funds, and so on pay minimal taxes even in the highest⁣ tax jurisdictions. On the amounts they're earning investing outweighs any tax burdens and access to⁢ capital afford such vast wealth that whatever taxes are paid is a small price to︀ pay for the ability to earn such wealth in the first place. Furthermore, employees are︁ compensated with stock too. Not to mention, the UAE cannot possibly offer the same levels︂ of capital the US, UK, and China still can given the fact the USD and︃ RMB and GBP to a lesser degree are prominent trade and reserve currencies.

 

[GPT]

Even though I agree with you on the above,︍ it is also very clear that the U.S. and GB are not the dominant financial︎ powerhouses anymore.

Yes the USD is the global reserve currency for the moment. If you️ follow however what is happening on the global economical field then it’s becoming clear that‌ the USD as the reserve currency is under pressure.

Eventhough most of the VC funding‍ takes place in the US and USD, it is not necessarily tied to the USD.⁠

Tax wise, indeed, no one gives a f**k once the Maslow needs are satisfied and⁤ there is still disposable income left.

Tax optimization, planning etc are concepts that normally start⁣ for most corporates and people once they’ve experienced double taxation, a run in with the⁢ law because of conflict of law principles or one of the many other triggers.

For large corporates it’s also not a goal in itself (although it sometimes looks like it),︀ in many cases it starts with looking into options because of international expansion.

Much of︁ the VC funds then indeed go offshore. Many US corporates, when going international, used in︂ the past for that matter the „Double Dutch Irish Sandwich“ because when you do expand,︃ everyone prefers to find the easiest and cheapest way.

So, yes I agree with you︄ in the sense of VC funding, and the moment such a backed company goes international︅ then taxes become a thing. All you need to do is look at Facebook Starbucks︆ Subway Apple Microsoft and dozens others in tech, finance, F&B, entertainment, sports, real estate to︇ name a few.

Last but not least, VC providers want a good return as well.︈ Good returns are quicker achieved with proper tax planning. What you don’t have to pay︉ in taxes etc. so the company may look US on the outside. Are they US︊ on the inside? In other words, do you know where their HQ is for fiscal︋ purposes?

 

[jafo]

#Bingoooooooooooo!!! 100% this!
In the early 1980s, I knew already about "tax optimization" because the European colony I was‌ born on was a massive tax haven. Still, I was so broke and hungry as‍ a teenager that the USA was the place to be for computer, software, and electrical⁠ engineering. I didn't give AF about taxes because I had no taxable income anyway. To⁤ be frank, I had no income. rof/% smi(&%

NGL, I was a net negative at that moment.⁣ The college took a significant risk with me with that academic scholarship.

 

[LFGC]

Corporate tax planning versus individual are wholly different. A small business owner in the US‌ can easily open a foreign subsidiary and keep profits off shore with a very simple‍ setup that costs almost nothing to maintain. Without the necessity of renouncing citizenship, acquiring residency,⁠ or alternative citizenship. Corporations and investment funds have been avoiding or optimizing taxes forever and⁤ that won't change. There are and endless list of structures from feeder funds for hedge⁣ funds in the Cayman Islands to various IP schemes using Ireland, Netherlands, even most recently⁢ Poland. However, as mentioned, the currently glorified jurisdictions like UAE are not taking top talent︀ away from traditional jurisdictions like US, UK, CN, despite all the economical, political, and other︁ quality of life issues in these countries. For those with existing wealth that is a︂ different story, many traditional families, those that exited, and so on that are living own︃ passive income are far more sensitive to choosing a tax optimized domicile or structure.

 

[manukahoney]

This.
You don't move to a tax heaven to get rich. You move there to protect and⁣ grow your wealth. Many fail to understand the difference and forget that 100% of 0⁢ is still 0.

 

[LFGC]

Exactly, a recent trend has⁠ been founders, general partners, or similar redomiciling, while of course the rest of the employees⁤ remain in a financial or tech center with high taxes. In the US, which is⁣ much different than the rest of the world, the movement from California and New York,⁢ has been a colossal disaster with many fleeing back. The cost of living due to︀ a variety of factors such as real estate bubble in Florida and home owners insurance︁ costs have created a situation where those that have moved actually make less now than︂ they did paying high taxes in NY and CA. Their employer also paid them less︃ in FL and TX due to the lack of state income tax, so they lost︄ a lot more than expected given the cost of living.

 

[GPT]

Partly yes. Partly no.

The days of just moving offshore as︅ a small entrepreneur and not moving yourself these days means being treated transparent.

Result is︆ that you still will be taxed and then the offshore setup is just an expensive︇ exercise. Sometimes it actually can be useful regardless of the expenses when it’s not about︈ tax planning but about asset protection.

Gone are the days to just open an offshore︉ and shift money from a to b to save tax. Ofcourse it works on the︊ surface until tax authorities look into it. I hope you have a good accountant and︋ lawyer at that point in time. (The above applies to all first world countries nowadays).︌

 

[LFGC]

That woefully incorrect. You're confusing two different concepts. Opening an offshore company and opening︂ a corporate bank account that reports back to your home country via CRS, in the︃ case of Americans FATCA, to avoid taxes is not what I described. Anyone from any︄ country can open a foreign subsidiary of a domestic corporation and shield income from taxes︅ via licensing of IP in a low tax jurisdiction as an example. This money cannot︆ be repatriated, but that is fine as it is most often invested, reinvested, or repatriated︇ during tax holidays. Such structures are fully complaint, not expensive and are popular even for︈ Americans with SMEs. There is no "tax authority to look into it". It is completely︉ transparent. Furthermore, depending on business type, one may not even need to go through any︊ such difficulty. As those with real estate depreciation, unrealized gains, or similar can entirely legally︋ avoid taxes through borrowing and offsetting income with depreciation.

 

[GPT]

In theory︄ you are correct. Practically however. I’m sorry, those days are gone.

You forget a very︅ important substance and presence. Those two container words are enforced everywhere. Effectively the smalltime entrepreneur︆ doesn’t have enough turnover to justify the cost of being compliant.

I’m not talking about︇ a bank account, nor about opening the offshore and use IP etc. I’m talking about︈ any offshore nowadays where presence and substance is needed.

Only old ones (pre 2020) currently︉ still ok. New ones, forget it. Even Dubai (commercial real estate is booming currently because︊ of it) requires physical presence when people are employed. Yes shared office facilities work. But︋ hey, those are also not for free.

For the larger medium sized companies it still︌ can make sense to go offshore. In many cases it’s more worthwhile to look at︍ domestic solutions. Especially if you only do it to save some taxes.

 

[LFGC]

Small time entrepreneurs never ever had any ability to avoid taxes, they still do not,‌ and will never. Short of maybe a few uncompliant ones, but that carries additional restrictions‍ such as being able to invest that money as it then becomes visible. So in⁠ the end these evaders pay with inflation and lack of investment upside. You need a⁤ business with a turn over of at least $1-2M per year to consider any sort⁣ of tax optimization strategies. As for your post, not true, the substance test is irrelevant⁢ for example for US companies. The GILTI (Global Intangible Low-Taxed Income (GILTI): How Calculation︀ Works) tax on foreign owned subsidiaries of US companies deemed controlled foreign companies is︁ 10-13% which is still VERY low and allows for the what I described in my︂ previous post.

There is no need to have any sort of substance, substance defined as︃ nonsensical offices, nominee directors, all of which are in almost all cases solely for the︄ purpose of establishing substance and do not actually have any sort of business function. It︅ is similar in almost other jurisdictions.

It is important to note, tax authorities push a︆ lot of fear mongering to the public. The US IRS is grossly underfunded, similarly most︇ tax agencies such as HMRC and many others are as well. Audits are VERY low,︈ single digit percentages of audits for SMEs usually, not to mention, audits mostly focus on︉ large (500+ employees) multinationals with deep pockets for settlements. Tax authorities do not travel to︊ foreign countries to see if an address is a dedicated office or shared office. Tax︋ authorities use predictable and tried methods of matching reported transactions from vendors to reported revenues︌ on returns.

There are no domestic solutions, the solution is to pay your taxes and︍ work towards building a bigger business and avoiding taxes or having a one off liquidity︎ event where in which case you become wealthy enough to pay 20% and invest the️ rest and live off of the passive income. Moving to different states or countries may‌ be counterproductive; deal flow, talent, general proximity to your business and its interests should most‍ often be considered.

 

[GPT]

Couple of things.

SME’s is something you⁠ mention and I reply to.

Substance presence isn’t dependent on the onshore tax authorities only.⁤ The offshores nowadays can even require it. Dubai being an example. And that means extra⁣ costs for that M in the SME. Most M’s are not interested in frontloading. The⁢ want ROI on every dollar spent.

Domestic solutions are very present. Speak to any fiscal︀ specialist and you will find out. Also in the USA, UK and many other if︁ not all first world countries. Very specifically for the 1-3M profit you have lots of︂ options. From 3M and upwards going offshore for tax reasons is definitely a good option.︃

If you go offshore for asset protection, different context. Then even 1 dollar in assets︄ can be worth the cost.

The common part of what you say was definitely factual.︅ You do miss what happened in the last couple of years / since 2020-2021.

Tax authorities being understaffed etc. It literally doesn’t matter. All they need to do is open︆ the case and they can with the tricks they have up their sleeves extend it︇ for easily a decade if not more before reaching a conclusion.

Things have changed and︈ continue to change daily. Never underestimate tax authorities. That will end up costing dearly. The︉ Wild West days are long gone.

I’m leaving it at this. I have no interest︊ in yes / no games.

 

[clemens]

yeah you can find a few good threads about OCT guys that did, they regret⁠ I guarantee you.