Dubai + EU subsidiary setup?

[eurobundance]

Looking to relocate to Dubai and get citizenship to reduce tax burden from The Netherlands.

There is 1 problem, for the payment processor I use it is required that the company should be from the EU.

What is the best way to set this up?

- Dubai Freezone Company with an EU Subsidiary so I can get access to the payment processor?
- Independent Company in the EU While Residing in Dubai?

Will any of this work? Whats the best way to approach this?

 

[Sols]

dutchboy said:
Looking to relocate to Dubai and get citizenship to reduce tax burden from The Netherlands.
Click to expand...

I'm going to go out on a limb and guess you mean residence, not citizenship. It's extremely hard to get UAE citizenship unless you're born with it.

dutchboy said:
There is 1 problem, for the payment processor I use it is required that the company should be from the EU.
Click to expand...

Stripe is available in UAE. Would that work for you? There are several more options like Telr, Checkout.com, and PayTabs.

But if you're after other payment methods, I understand your predicament.

dutchboy said:
What is the best way to set this up?

- Dubai Freezone Company with an EU Subsidiary so I can get access to the payment processor?
- Independent Company in the EU While Residing in Dubai?

Will any of this work? Whats the best way to approach this?
Click to expand...

The subsidiary option is the best route in most cases. It's a fairly common setup.

If you have a good relationship with them, speak with your payment processor in advance to understand if they would be open to it.

Toggle signature
This is the probably the answer to your question.

 

[uplana]

Register a company in the EU, for example, in the UK, Cyprus, or Malta, and let them be the payment processor for your UAE company. It requires that it's your UAE company that establishes the EU company.

Toggle signature
Find help to the ultimate anonymous setup on OffshoreCorpTalk - Tried, Tested & Works
Need help to get things done, ping me inside the Mentor Group Gold forums.

 

[eurobundance]

Sols said:
I'm going to go out on a limb and guess you mean residence, not citizenship. It's extremely hard to get UAE citizenship unless you're born with it.
Click to expand...

Yes, I meant that Tax Residence

Sols said:
Stripe is available in UAE. Would that work for you? There are several more options like Telr, Checkout.com, and PayTabs.

But if you're after other payment methods, I understand your predicament.
Click to expand...

I need other payment methods, Stripe alone won't be enough

Sols said:
The subsidiary option is the best route in most cases. It's a fairly common setup.

If you have a good relationship with them, speak with your payment processor in advance to understand if they would be open to it.
Click to expand...

What's the difference between going subsidiary company or having a payment processor company owned by the dubai company?

uplana said:
Register a company in the EU, for example, in the UK, Cyprus, or Malta, and let them be the payment processor for your UAE company. It requires that it's your UAE company that establishes the EU company.
Click to expand...

This sounds good, but which country would be the best fit? Easiest to get a reliable bank, accepted by many payment processors?

And if the company activities is only processing payments, there would be almost no corporate tax in the EU company right? Since the profit is very low. And only after money flowing to the Dubai company there would be 9% tax?

 

[Sols]

dutchboy said:
What's the difference between going subsidiary company or having a payment processor company owned by the dubai company?
Click to expand...

Not sure if I understand the question. They're the same thing. A subsidiary is a company owned by another company, i.e. the first of your two presented options.

It's much easier to move the money from one company to another if they're in a parent””subsidiary relationship.

Toggle signature
This is the probably the answer to your question.

 

[eurobundance]

Sols said:
Not sure if I understand the question. They're the same thing. A subsidiary is a company owned by another company, i.e. the first of your two presented options.

It's much easier to move the money from one company to another if they're in a parent””subsidiary relationship.
Click to expand...

Yes my bad, I meant the business activities of the subsidiary. Is it the best option to make the subsidiary only focus on payment processing?

What EU country would be the best for the subsidiary? Easiest to get a reliable bank, accepted by many payment processors?

And if the company activities is only processing payments, there would be almost no corporate tax in the EU company right? Since the profit is very low. And only after money flowing to the Dubai company there would be 9% tax?

 

[CyprusLawyer101]

A Cyprus company acts well as a "paying agent" . You should only maintain a small marging to be paid under 12.5% corporate tax which should be negligible and in line with transfer pricing principles.

Last edited: Apr 1, 2024

 

[Sols]

dutchboy said:
Is it the best option to make the subsidiary only focus on payment processing?
Click to expand...

Yes. It shouldn't do anything else. If you need an EU for other things, form another entity for that.

dutchboy said:
What EU country would be the best for the subsidiary? Easiest to get a reliable bank, accepted by many payment processors?
Click to expand...

Cyprus is very, very popular. After that, I'd say Malta, Estonia, and Lithuania are distant second, third, and fourth.

Pre-Brexit, UK and Gibraltar were popular. They can still be useful, depending on your exact needs. Something to look into.

dutchboy said:
And if the company activities is only processing payments, there would be almost no corporate tax in the EU company right? Since the profit is very low. And only after money flowing to the Dubai company there would be 9% tax?
Click to expand...

Correct.

Last edited: Mar 31, 2024
Toggle signature
This is the probably the answer to your question.

 

[Don]

You have multiple options:
1) establish a separate EU company as a payment processor
2) open a subsidiary in EU for UAE company
3) operate as an EU company but with a branch office in UAE (e.g., no WHT jurisdictions like Estonia, Malta, Cyprus, or even UK treaty non-resident company)

Specially the 3rd option might be good for Dutch clients (from experience), because you have not very good DTA between UAE-NL, meaning you cant qualify as NL tax resident based on DTA.
Estonian company with a branch office in UAE can be a decent choice as the branch can still qualify for Small business relief, and it can be a 0-9% tax structure with residency in the Schengen, with no physical presence required. Estonia-NL treaty is also far better, as you can stay e.g., resident in Estonia but tax resident in UAE, get smoother banking, etc.

 

[eurobundance]

Don said:
You have multiple options:
1) establish a separate EU company as a payment processor
2) open a subsidiary in EU for UAE company
3) operate as an EU company but with a branch office in UAE (e.g., no WHT jurisdictions like Estonia, Malta, Cyprus, or even UK treaty non-resident company)

Specially the 3rd option might be good for Dutch clients (from experience), because you have not very good DTA between UAE-NL, meaning you cant qualify as NL tax resident based on DTA.
Estonian company with a branch office in UAE can be a decent choice as the branch can still qualify for Small business relief, and it can be a 0-9% tax structure with residency in the Schengen, with no physical presence required. Estonia-NL treaty is also far better, as you can stay e.g., resident in Estonia but tax resident in UAE, get smoother banking, etc.
Click to expand...

Sols said:
Yes. It shouldn't do anything else. If you need an EU for other things, form another entity for that.
Click to expand...

CyprusLawyer101 said:
A Cyprus company acts well as a "paying agent" . You should onlt mauntain a small marging to be paid under 12.5% corporate tax which sgould be negligible and in line with transfer pricing principles.
Click to expand...

What about the option of relocating and getting tax residence in Cyprus?

I read you only have to stay 60 days a year. In the UAE I thought it was 180 days.

 

[CyprusLawyer101]

dutchboy said:
What about the option of relocating and getting tax residence in Cyprus?

I read you only have to stay 60 days a year. In the UAE I thought it was 180 days.
Click to expand...

The 60 day rule in Cyprus is available, but you may or may not qualify as there are additional requirments and in particular the requirement that you are not considered as tax resident anywhere else or residing in another jurisdiction for more than 183 days. So its not a straighforward process where you just stay in Cyprus for 60 days and then you are good to go. But still satisfying the requirements shouldn't be much of a trouble for someone with firm intentions.

Last edited: Apr 1, 2024

 

[eurobundance]

CyprusLawyer101 said:
The 60 day rule in Cyprus is available, but you may or may not qualify as there are additional requirments and in particular the requirement that you are not considered as tax resident anywhere else or residing in another jurisdiction for more than 183 days. So its not a straighforward process where you just stay in Cyptus for 60 fays and then you are good to go. But still satisfying the requirements shouldn't be much of a trouble for someone with firm intentions.
Click to expand...

Can you send me a dm with more info about this and your company

 

[Dandyline]

CyprusLawyer101 said:
A Cyprus company acts well as a "paying agent" . You should onlt mauntain a small marging to be paid under 12.5% corporate tax which sgould be negligible and in line with transfer pricing principles.
Click to expand...

I assume the paying agent needs to be a subsidiary?

 

[CyprusLawyer101]

Dandyline said:
I assume the paying agent needs to be a subsidiary?
Click to expand...

If it wouldn't be it might raise other risks pertaining to a licensing requirement for handling third party funds

Last edited: Apr 1, 2024