Best EU company for passing profits to Dubai FZCO

[roulex]

Hi,

I'm living in Dubai, I have a freezone company which owns a Delaware LLC which I use to serve US clients.

Big4 setup this structure for me in the US. I pass 97 % of revenues tax-free to Dubai.
Big4 Logic: No office/employees/assets/value in the US, therefore the US company is just like a "payment provider" for the Dubai company to provide invoices and receive money. A third-party payment provider would not be able to charge more than 3 %, so I can invoice 97 % of my profits from Dubai and leave 3 % in the US as profits. (I know I might be able to get it 100% tax free as a disregarded entity, but that's off-topic)

The explanation makes sense to me. I'd like to create a similar setup in Europe to invoice my European clients. Preferably central Europe (Germany, France, Spain, Italy, Austria, Switzerland), not Romania, Bulgari, etc.
The European company should only issue invoices and receive payments, keep 3 % and get invoices 97 % of revenues from Dubai.

What do you think of this structure and which European country would agree on this setup the easiest? As these countries are high-tax, I need to avoid them taxing more than the 3 %.

Any feedback is appreciated.

Thanks

 

[Fred]

Hi,

good setup and something we use frequently as well.

As you have mentioned already - the 3% are non-sense and you can remit 100% tax free to Dubai.

However in Europe you can't achieve the same.

If you have a UK Ltd. without any EU Business so that you don't need to apply for VAT No. etc. you can use the UK Ltd. in a similar way like the US LLC - you need an accountant of course but if you don't have any substance in the UK + no VAT no. - you don't have to pay tax (long story short) - but as soon as you deal with EU clients you need a VAT no - and the VAT no. will create substance which leads to UK corporate tax.

So the lowest possible structure would be something on Malta with 5% and I'm sure @BlueMist is using this setup.

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[roulex]

Hi Fred,

Thanks for your reply. VAT is fine, we are dealing 100% B2B. Malta is still a bit too "shady" for the corporations we work with. We need companies in Germany, France, Spain, Italy, Austria, Switzerland, Netherlands, etc., all high tax.

I know we can't go 100 % tax free in Europe. I wanted to compare the "payment provider" approach. If the company in Europe is only handling incoming payments, but has absolutely no costs related to the business, doesn't generate other any value, then it is a payment provider for the parent company.

This even holds a "third party comparison". Imagine a company - just theoretically - that offered a service to invoice your clients on their behalf and receive the payments. How much could this company be able to charge, or: How much of the total value of a service/product is just the accounting part? 3 %, maybe 5 %, for sure not more than 10 %. So if Dubai invoices 90-97 % for the actual services/digital goods, that should be business costs, leaving just 3-10% under the high taxation.

Do you see any reason why high-tax countries could object? Which of the mentioned countries will give me the least headache incorporating through my Dubai holding?

 

[Fred]

Switzerland.

You can setup a Branch of your Dubai FZCO in Zug for example.

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[roulex]

Fred said:
Switzerland.

You can setup a Branch of your Dubai FZCO in Zug for example.
Click to expand...

Do you have a contact there that can help?

 

[uplana]

Fred said:
If you have a UK Ltd. without any EU Business so that you don't need to apply for VAT No. etc. you can use the UK Ltd. in a similar way like the US LLC - you need an accountant of course but if you don't have any substance in the UK + no VAT no. - you don't have to pay tax (long story short)
Click to expand...

Do you know about an accounting firm in the UK that would be able to help with such setups? I assume not all are happy to help you with such structures to avoid to pay tax.

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