New Big Dubai FZCO Benefit?

[Au999]

Ignoring the corporate tax issue covered at length elsewhere but is there not now a big greenlight on Dubai FZ companies dealing with onshore companies and people?

Before it seemed to be a major no-no but now it's covered in tax law saying it's fine and you just need to pay tax on those transactions.

If that's the case then nice one!

 

[bedouin]

Do you build ships? Do you manufacture something tangible? If not, then you pay.

 

[Au999]

bedouin said:
Do you build ships? Do you manufacture something tangible? If not, then you pay.
Click to expand...

Post wasn't about tax per se. It was about how it looks like inside the new tax law that it's now ok for a FZCO to do some trade onshore in the UAE. Before it was a no no.

 

[bedouin]

Au999 said:
Post wasn't about tax per se. It was about how it looks like inside the new tax law that it's now ok for a FZCO to do some trade onshore in the UAE. Before it was a no no.
Click to expand...

Yes, everyone (basically) will pay. There is zero benefit to do FZCO right now. Like, at all. Someone prove me wrong. In fact, it's easier to open bank accounts if you have a mainland. FZCO's right now only make sense, ONLY, if you in fact carry out one of the qualifying activities. Otherwise, it's worse. And more expensive.

So long story short, there are no "FZCO"'s anymore in terms of who they can and can't trade with anymore, unless they really are under the qualifying ones.

 

[SasuT]

bedouin said:
Yes, everyone (basically) will pay. There is zero benefit to do FZCO right now. Like, at all. Someone prove me wrong. In fact, it's easier to open bank accounts if you have a mainland. FZCO's right now only make sense, ONLY, if you in fact carry out one of the qualifying activities. Otherwise, it's worse. And more expensive.

So long story short, there are no "FZCO"'s anymore in terms of who they can and can't trade with anymore, unless they really are under the qualifying ones.
Click to expand...

Interesting, can we get more infos on how it's more interesting now to open a mainland company ? I don't have a precise idea of the costs to maintain a company in freezone vs a company in mainland.

And is it that hard to open a bank account when your company is in a free zone?

Thanks in advance

 

[Fred]

Au999 said:
Ignoring the corporate tax issue covered at length elsewhere but is there not now a big greenlight on Dubai FZ companies dealing with onshore companies and people?

Before it seemed to be a major no-no but now it's covered in tax law saying it's fine and you just need to pay tax on those transactions.

If that's the case then nice one!
Click to expand...

Yes that's absolutely correct - they removed entirely the section about not being allowed to do business with Mainland - you can now business within the UAE same like a Mainland Company.

@bedouin you are missing @Au999 point.

@Au999 good point - we put this on our Blog Article we publish during the weekend.

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[bedouin]

SasuT said:
Interesting, can we get more infos on how it's more interesting now to open a mainland company ? I don't have a precise idea of the costs to maintain a company in freezone vs a company in mainland.

And is it that hard to open a bank account when your company is in a free zone?

Thanks in advance
Click to expand...

Setups are cheaper for mainland companies and they are not considered high-risk by banks as FZCO's were until now. But maybe now with the CT law it will also be easy to open company accounts for FZCO.

FZCO's have disappeared as you know them. They are all in essence mainland. FZCO only comes into play if you have one of the following:


Ӣ Manufacturing of goods or materials;

Ӣ Processing of goods or materials;

Ӣ Holding of shares and other securities;

Ӣ Ownership, management, and operation of ships;

Ӣ Reinsurance services;

Ӣ Fund management services that are subject to the regulatory oversight of the competent authority in the UAE;

Ӣ Wealth and investment management services that are subject to the regulatory oversight of the competent authority in the UAE.

Ӣ Headquarter services to related parties;

Ӣ Treasury and financing services to related parties;

Ӣ Financing and leasing of aircraft,

Ӣ Logistics services;

Ӣ Distribution in or from a designated zone that meets the relevant conditions; and any activities that are ancillary to the above-mentioned activities.


So basically no one here I'd venture to say.