UAE FZ company + Malta non dom

[JimBeam]

Here's the case:
A free-zone company in Dubai is operating for couple of years now. Company has two shareholders (partners) 50% each. One of them is the director of the company other one is just shareholder. The director guy wants to move somewhere closer to Europe with his faimly so he could visit his family (aged parents living in Europe) more often.

Could he move to Malta non-dom and pay the tax only on the amount he brings in to the island?
Will his UAE company be considered as tax resident in Malta or not?

Thanks

 

[Marzio]

JimBeam said:
other one is just shareholder
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Where is resident the other shareholder?

 

[JimBeam]

Marzio said:
Where is resident the other shareholder?
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UAE

 

[Marzio]

JimBeam said:
Will his UAE company be considered as tax resident in Malta or not?
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It the director is managing the company from Malta then yes it could be considered resident in Malta.

But as i said here: "Companies which are resident but not domiciled (or vice versa) in Malta are subject to tax in Malta on all income and chargeable gains arising in Malta, and on income arising outside Malta which is remitted back to Malta. No tax is payable on foreign income which is not received in Malta and on capital gains arising outside Malta to a company which is not ordinarily resident and domiciled in Malta, even if remitted to Malta."

You could use your FZ bank account so that income is not received in Malta and hence no tax is due.

You, as a non-dom, will pay the tax only on the amount brought in Malta.

You only have to verify with a Maltese lawyer if by managing the company from Malta the income will be considered arising in Malta.

 

[JimBeam]

Marzio said:
You could use your FZ bank account so that income is not received in Malta and hence no tax is due.

You, as a non-dom, will pay the tax only on the amount brought in Malta.

You only have to verify with a Maltese lawyer if by managing the company from Malta the income will be considered arising in Malta.
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He would still get his salary and dividends in Dubai but just transfer a portion of the money to Malta and pay tax on that part.
That's pretty straightforward I guess.

My initial question/concern is: will the company be treated as local (Maltese) or not?

 

[Marzio]

JimBeam said:
will the company be treated as local (Maltese) or not?
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If you want the company to be treated as resident in Malta then, as a director, manage the company from Malta. The company then will be treated as a residen non-domicile company where you would pay taxes only on income arising in malta and income arising arising outside Malta which is remitted back to Malta.

If you don't want the company to be treated as resident in Malta then appoint the other shareholder as a director or hire a managing director.

 

[Anonymous1234]

JimBeam said:
He would still get his salary and dividends in Dubai but just transfer a portion of the money to Malta and pay tax on that part.
That's pretty straightforward I guess.

My initial question/concern is: will the company be treated as local (Maltese) or not?
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if you end up paying 9% corporate tax in dubai then maybe its better you speak to a good lawyer in malta, I am sure you can structure it to take advantage of non dom regime, keep the residency of the company in dubai if its 0 tax, pay 5k euros as remittance basis charge and you are sorted, thats what I am most likely going to do too except my company structure will be different.

Last edited: Mar 29, 2023

 

[Marzio]

A1988 said:
if you end up paying 9% corporate tax in dubai
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Why do you think he would end up paying 9% CIT in UAE?

Aren't freezone companies tax exempt?

 

[Anonymous1234]

Marzio said:
Why do you think he would end up paying 9% CIT in UAE?

Aren't freezone companies tax exempt?
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no clarification on qualifying income and only qualifying income is tax exempt for FZ companies. I spoke a very good lawyer and he told me to get the hell out as CIT AND PIT is going to be hit sooner than later.

Marzio said:
Why do you think he would end up paying 9% CIT in UAE?

Aren't freezone companies tax exempt?
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if you remember my setup, its becoming a huge problem to do business in UAE if you have ties to europe, lots of questions asked and with UAE now on blacklist of FATF and EU, its an even bigger problem. My bank of 8 years asked me to prove employment income even though I have investor visa that triggered me to believe they are definitely going to introduce PIT sooner than later, also they have PE rule for companies, substance requirement, but the issue is 1st june CIT is applicable and still no clarification on FZ companies qualifying income criteria for 0 tax.

Last edited: Mar 29, 2023

 

[Marzio]

A1988 said:
no clarification on qualifying income and only qualifying income is tax exempt for FZ companies. I spoke a very good lawyer and he told me to get the hell out as CIT AND PIT is going to be hit sooner than later
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Whoa, didn't know that things were as bad in UAE

A1988 said:
the issue is 1st june CIT is applicable and still no clarification on FZ companies qualifying income criteria for 0 tax
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Then it would be a good idea to have plan B in place.

 

[Anonymous1234]

Marzio said:
Whoa, didn't know that things were as bad in UAE



Then it would be a good idea to have plan B in place.
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MALTA........................................

 

[Marzio]

Have you ever been there?

If not then go visit the place because it's not for everyone.

It's tiny, overcrowded and dirty (last time i visited).

 

[Anonymous1234]

Marzio said:
Have you ever been there?

If not then go visit the place because it's not for everyone.

It's tiny, overcrowded and dirty (last time i visited).
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you are right its not for everyone, i visited a month ago with my wife and we both liked it, either way i am close to dolce vita and pay close to zero taxes, what else can I ask for? Either way, with the savings that I am looking interms of capital gains tax, I better smile at every trash bag I see in malta 🙂

 

[Marzio]

A1988 said:
i visited a month ago with my wife and we both liked it
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If you and wife both liked then go for it.

Honestly the only place in Malta where i would settle would be in Santa Maria estate.

I long passed the Paceville kind of entertainment.

 

[Anonymous1234]

Marzio said:
If you and wife both liked then go for it.

Honestly the only place in Malta where i would settle would be in Santa Maria estate.

I long passed the Paceville kind of entertainment.
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yes i agree, I liked the houses there and will see some more when I go next in april. I liked walking in st julians, sliema and valletta. Maybe thats where I would get an office if everything goes well.

 

[JimBeam]

A1988 said:
if you end up paying 9% corporate tax in dubai then maybe its better you speak to a good lawyer in malta, I am sure you can structure it to take advantage of non dom regime, keep the residency of the company in dubai if its 0 tax, pay 5k euros as remittance basis charge and you are sorted, thats what I am most likely going to do too except my company structure will be different.
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I think that CIT can't be introduced to FZ companies that easily. Mainland companies already have it.
If that happens then I would consider other options with Europe (Bulgaria 10% or Montenegro 9%).

A1988 said:
yes i agree, I liked the houses there and will see some more when I go next in april. I liked walking in st julians, sliema and valletta. Maybe thats where I would get an office if everything goes well.
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Do you plan on having a company in Malta?
How does that work with non-dom?

 

[Anonymous1234]

JimBeam said:
I think that CIT can't be introduced to FZ companies that easily. Mainland companies already have it.
If that happens then I would consider other options with Europe (Bulgaria 10% or Montenegro 9%).


Do you plan on having a company in Malta?
How does that work with non-dom?
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Yes I do plan on having a company, my interests in the maltese company will be owned thru a holding company outside Malta, preferably in Cyprus or Estonia or UK.

 

[algotrader]

A1988 said:
Yes I do plan on having a company, my interests in the maltese company will be owned thru a holding company outside Malta, preferably in Cyprus or Estonia or UK.
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But how do you avoid that the Maltese subsidiary is being taxed in the holding company jurisdiction if its effective management is in that location?

 

[Marzio]

algotrader said:
But how do you avoid that the Maltese subsidiary is being taxed in the holding company jurisdiction if its effective management is in that location?
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https://www.offshorecorptalk.com/th...ta-company-in-cyprus.38851/page-2#post-252635

 

[JimBeam]

https://timesofmalta.com/articles/view/new-corporate-tax-regime-unavoidable.1022176