UAE FZ close it or what?

[mgs999999999]

Hi guys,

I created a FZ company in DUQE with Virtuzone in April 2023. All my clients are from outside the UAE and I do consulting services. At the time of formation, I was told I was going to have 0% tax. However, now it looks like I will have to pay 9% tax. I read a lot of threads and some people say FZ will not pay taxes. Other say FZ will pay 9%. Others say, there will be an announcement soon and we need to wait. I am so tired of lies that I am thinking about closing my company there and just keep going with my previous setup. I would much appreciate if someone could answer the following questions:

1) Will FZ companies have 0% taxes?

2) in the worst case scenario of 9% tax. Will my company has to pay taxes for the money make from April 2023 to December 2023 or only for the money make starting in January 2024?

3) what happens if you just take your money out of the UAE and never come back without closing your UAE company? I am European.

Thanks a lot in advance,

Best wishes

 

[Konstanz]

1. No, You will have to pay 9%
2. Starting 2024
3. Bad idea. Let's say you fly through Dubai someday, you can be in trouble. Do everything properly

 

[mgs999999999]

Konstanz said:
1. No, You will have to pay 9%
2. Starting 2024
3. Bad idea. Let's say you fly through Dubai someday, you can be in trouble. Do everything properly
Click to expand...

thanks for your reply.

Regarding 3) do you know what should be done? I mean. If I do not renew my trade license or I do not show up for more than 6 months my visa will be cancelled. Is not that enough to consider my company close?

Do you know how much can it cost?

 

[BeyondBorders]

Close off your FZ Company and parting ways with the UAE on good terms is the only feasible recommendation to avoid any trouble. Liquidation can take some time (months) due to required final Audit, don't wait until the last minute and start this process once you have made your decision. Freezones can operate slowly and they will charge you a penalty if it's not resolved before renewal.

 

[myhand]

If you don't go back to the UAE and just let the company be stroked off, what would happened it that case?

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[Clank]

myhand said:
If you don't go back to the UAE and just let the company be stroked off, what would happened it that case?
Click to expand...

Nothing

 

[Ancova]

mgs999999999 said:
Hi guys,

I created a FZ company in DUQE with Virtuzone in April 2023. All my clients are from outside the UAE and I do consulting services. At the time of formation, I was told I was going to have 0% tax. However, now it looks like I will have to pay 9% tax. I read a lot of threads and some people say FZ will not pay taxes. Other say FZ will pay 9%. Others say, there will be an announcement soon and we need to wait. I am so tired of lies that I am thinking about closing my company there and just keep going with my previous setup. I would much appreciate if someone could answer the following questions:

1) Will FZ companies have 0% taxes?

2) in the worst case scenario of 9% tax. Will my company has to pay taxes for the money make from April 2023 to December 2023 or only for the money make starting in January 2024?

3) what happens if you just take your money out of the UAE and never come back without closing your UAE company? I am European.

Thanks a lot in advance,

Best wishes
Click to expand...

As a former employee of a government free zone in Dubai:

1. Still unclear. Even if there will be 9% tax on profits. There are expenses that your company will have to deduct from profits. Dividends are also tax free.

2. First filling will most probably be January 2025.

3. Do not do this! Close your company properly. The below prices are for IFZA (the Free Zone I worked for), for Duqe it may differ:

Visa Cancellation - 500 AED if you are inside the country, 1300 AED if outside
Est. Card Cancellation - 500 AED
License Cancellation - 2000 AED
Auditing Costs - around 5000 AED

If you do not close your FZ and let it run, the penalties (in IFZA) are 1000 AED per month for the license and 1000 AED per month for the Est. Card and I guarantee you if you even transit through UAE, you will be arrested if you do not pay.

 

[mgs999999999]

Ancova said:
As a former employee of a government free zone in Dubai:

1. Still unclear. Even if there will be 9% tax on profits. There are expenses that your company will have to deduct from profits. Dividends are also tax free.

2. First filling will most probably be January 2025.

3. Do not do this! Close your company properly. The below prices are for IFZA (the Free Zone I worked for), for Duqe it may differ:

Visa Cancellation - 500 AED if you are inside the country, 1300 AED if outside
Est. Card Cancellation - 500 AED
License Cancellation - 2000 AED
Auditing Costs - around 5000 AED

If you do not close your FZ and let it run, the penalties (in IFZA) are 1000 AED per month for the license and 1000 AED per month for the Est. Card and I guarantee you if you even transit through UAE, you will be arrested if you do not pay.
Click to expand...

Thanks a lot for your reply.

So, once you get your Emirates ID (VIsA) it is my obligation to renew it even if I don't want to stay there? I mean, can I get a fine for not cancelling my emirates ID?

Essentially, it looks like they are forcing you to pay even if you want to live (pay for renewal if it is going to expire and pay for cancellation if you want to leave) that's crazy!

Is my understanding correct?

 

[Ancova]

mgs999999999 said:
Thanks a lot for your reply.

So, once you get your Emirates ID (VIsA) it is my obligation to renew it even if I don't want to stay there? I mean, can I get a fine for not cancelling my emirates ID?

Essentially, it looks like they are forcing you to pay even if you want to live (pay for renewal if it is going to expire and pay for cancellation if you want to leave) that's crazy!

Is my understanding correct?
Click to expand...

You have to renew your license and Est. card every year, visa every 2 years.

I do not know the exact prices of your FZ, but the procedure of renewal or cancellation is the same for all FZ.

I would suggest you to contact your agent (in this case Virtuzone) and ask for the pricing. In the meantime, contact the FZ directly, they might offer you a better price.

 

[jafo]

Ancova said:
If you do not close your FZ and let it run, the penalties (in IFZA) are 1000 AED per month for the license and 1000 AED per month for the Est. Card and I guarantee you if you even transit through UAE, you will be arrested if you do not pay.
Click to expand...

What happens to people who just don't have the money to pay?
Someone who has gone through a hard time and is now destitute?
Maybe lost a loved one after expensive medical treatments failed and now is bankrupt?

I know so many people who have faced financial adversities since 2008. What about these people?

 

[Ancova]

jafo said:
What happens to people who just don't have the money to pay?
Someone who has gone through a hard time and is now destitute?
Maybe lost a loved one after expensive medical treatments failed and now is bankrupt?

I know so many people who have faced financial adversities since 2008. What about these people?
Click to expand...

Yes correct but why would you risk not being able to come to uae anymore

 

[jafo]

Ancova said:
Yes correct but why would you risk not being able to come to uae anymore
Click to expand...

I understand, but some people went bust! I personally know someone who had in a Swiss bank account US$26M in 2003 and today is living with his girlfriend because he lost it all and he's too old to make a comeback. Seriously! He went all in into real estate in the US and got killed. Also, the Swiss snitched on his account with the US vs. Swiss banking secrecy saga.

I remember him going to Dubai. He doesn't even have $100 to pay for groceries today!

What is he supposed to do?

PS. He's NOT the only one. I had dozens of friends trying to get me to invest in RE. I didn't do it because I didn't understand it. I still don't understand RE. 🙄

 

[Konstanz]

jafo said:
I understand, but some people went bust! I personally know someone who had in a Swiss bank account US$26M in 2003 and today is living with his girlfriend because he lost it all and he's too old to make a comeback. Seriously! He went all in into real estate in the US and got killed. Also, the Swiss snitched on his account with the US vs. Swiss banking secrecy saga.

I remember him going to Dubai. He doesn't even have $100 to pay for groceries today!

What is he supposed to do?

PS. He's NOT the only one. I had dozens of friends trying to get me to invest in RE. I didn't do it because I didn't understand it. I still don't understand RE. 🙄
Click to expand...

Yes but you said you invested in real estate in Monaco and still have apartment 🙂

 

[Ancova]

jafo said:
I understand, but some people went bust! I personally know someone who had in a Swiss bank account US$26M in 2003 and today is living with his girlfriend because he lost it all and he's too old to make a comeback. Seriously! He went all in into real estate in the US and got killed. Also, the Swiss snitched on his account with the US vs. Swiss banking secrecy saga.

I remember him going to Dubai. He doesn't even have $100 to pay for groceries today!

What is he supposed to do?

PS. He's NOT the only one. I had dozens of friends trying to get me to invest in RE. I didn't do it because I didn't understand it. I still don't understand RE. 🙄
Click to expand...

Then I would suggest the person to contact the immigration, authority and police if he is coming back and to sort it out before getting back. But someone with such fines that accumulated over years, will definitely be picked up at the airport.

 

[jafo]

Konstanz said:
Yes but you said you invested in real estate in Monaco and still have apartment
Click to expand...

Primary residence and that was in the 90s when prices were reasonable! I didn't understand it then and I still don't though.

Ancova said:
Then I would suggest the person to contact the immigration, authority and police if he is coming back and to sort it out before getting back. But someone with such fines that accumulated over years, will definitely be picked up at the airport.
Click to expand...

This is great information to know! It can help a lot of others who are used to just letting the company become dormant. Thanks for sharing!

 

[Konstanz]

jafo said:
Primary residence and that was in the 90s when prices were reasonable! I didn't understand it then and I still don't though.
Click to expand...

Curious, how much per sqm was in 90s Monaco in euros value?

 

[jafo]

Konstanz said:
Curious, how much per sqm was in 90s Monaco in euros value?
Click to expand...

Yikes... Not sure in Euros but I negotiated it for ₣16M (French francs) then (+25 years ago). The children sold it as the parents were too old and went to live with them. The children didn't want to deal with the apartment and it belonged to the family at least since the grandparents of the elderly couple. I purchased it through a Panamanian corp with bearer shares (ohhh...the good old days with BSI cry&¤). The place is 242 m² without counting the balcony. I'm terrible with spaces, I won't even try to guess the balcony space. I have a grill out on the balcony, a hammock, a lounge chair, and a table. It's not a big balcony, but it isn't small either.

 

[Konstanz]

jafo said:
Yikes... Not sure in Euros but I negotiated it for ₣16M (French francs) then (+25 years ago). The children sold it as the parents were too old and went to live with them. The children didn't want to deal with the apartment and it belonged to the family at least since the grandparents of the elderly couple. I purchased it through a Panamanian corp with bearer shares (ohhh...the good old days with BSI cry&¤). The place is 242 m² without counting the balcony. I'm terrible with spaces, I won't even try to guess the balcony space. I have a grill out on the balcony, a hammock, a lounge chair, and a table. It's not a big balcony, but it isn't small either.
Click to expand...

Congratulations! 🙂 good catch and good timing. I think Monaco is good investment. If you buy smart you cannot loose money in Monaco

 

[NoKYC]

Ancova said:
As a former employee of a government free zone in Dubai:

1. Still unclear. Even if there will be 9% tax on profits. There are expenses that your company will have to deduct from profits. Dividends are also tax free.

2. First filling will most probably be January 2025.

3. Do not do this! Close your company properly. The below prices are for IFZA (the Free Zone I worked for), for Duqe it may differ:

Visa Cancellation - 500 AED if you are inside the country, 1300 AED if outside
Est. Card Cancellation - 500 AED
License Cancellation - 2000 AED
Auditing Costs - around 5000 AED

If you do not close your FZ and let it run, the penalties (in IFZA) are 1000 AED per month for the license and 1000 AED per month for the Est. Card and I guarantee you if you even transit through UAE, you will be arrested if you do not pay.
Click to expand...

But is there a way to do accounting if you've never used your company meaning that you stayed on your savings for the entire time of the visa?

 

[Ancova]

NoKYC said:
But is there a way to do accounting if you've never used your company meaning that you stayed on your savings for the entire time of the visa?
Click to expand...

Feel free to email us, I'll connect you to our accounting department