How to Avoid CRS - 3 Options as of 2019 - 2025

[Osleak]

I think that this is like sop to the psychopaths bureaucrats of EU⁣ and USA.... uae will never make this because it will go against their interests... like⁢ crs if you talk with consultants it’s not still clear if uae are exchanging informations︀ to country of residence (when you have account as not resident)...

As you know it’s︁ nonsense... the uae law offer you the possibility to be resident in uae if you︂ incorporate fze and stay in uae minimun 2 days per year... now after hundreds thousands︃ of people come in dubai because this benefits you think that uae will do this?︄ Trust me at the moment is still no problem at all... btw on sunday i︅ will talk with my consultant

 

[Davis123]

UAE already passed law and all companies︂ will have to report a substance test. Google more for this info on gulf news.︃ Most of the consultants have no idea of it as I talked to them a︄ few days ago. Some are good experts. Corporate taxation comes next on as per UAE︅ lawyer. As per banks they already report all transactions to central govt which forwards them︆ to country of residence if a non resident is found. My friend from Germany was︇ refused by every bank back in 2015 for being non resident. Please post and update︈ all the info you find too. We are trying to learn too.

 

[Osleak]

I’ve got yesterday this notification from︁ my consultant, on Sunday i will ask her to get more information but here you︂ can find the form to fill

http://esr.uaqftz.com/
In this case uaq free zone

 

[Davis123]

Yes this is what we talked‍ about with a few consultants and substance test will be required from now for all⁠ corporations as per leading firms. It's also on my email by UAE govt itself.

 

[Osleak]

So let’s update about this⁠ next days... btw at the moment the test it’s a lot general, if someone here⁤ in the forum know something more about it and share informations it’s appreciate😉

 

[Davis123]

. Yes I saw this on my email too earlier for my⁢ jurisdiction. But I am a tax resident of USA as USA needs all the info.︀

 

[Osleak]

So you have not visa residence in uae?

 

[Davis123]

I have‌ been living in Dubai for a decade now. I am a full time resident of‍ Dubai,

 

[Osleak]

USA citizens are always another story, you have citizenship taxation...

 

[Davis123]

Yeah I know been wanting to give it up these days especially as I get‍ slammed on face by banks and brokerages even living overseas. Most investments are shut down⁠ on US citizens.

 

[JustAnotherNomad]

Great thread.

I am a digital nomad (left my high-tax country of citizenship for good‌ several years ago), but thinking about getting UAE residency for peace of mind - and‍ actually renting an apartment there to use as my base. But I will still keep⁠ traveling.
I have a couple of questions:

1. The way I understand it, being a⁤ UAE resident can be a red flag for banks. I’m a non-resident in my country⁣ of citizenship, but I still use bank accounts from that country and I use my⁢ parents’ address in that country, where I don’t live. I only visit a few short︀ times per year, like Xmas. Obviously I should update the bank details (or even close︁ the bank accounts) to avoid any doubt that I live there. But will it be︂ an issue to update the address to UAE, though I will actually have my residency︃ there? I really don’t live in my country of citizenship anymore, but I’m worried it︄ might give them ideas to make me disprove it. They could always claim visiting my︅ parents shows I still have my center of life there or whatever.

2. But if︆ I give them some fake residency address - can there be issues? For example, “structuring”︇ is a crime in the US. If you make several small bank deposits that are︈ just below the reporting threshold, you are committing a crime, even if the source of︉ the funds is legit. Can the same logic apply to opening bank accounts with a︊ “strawberry ID”? If they find out that you used an ID document and address from︋ a country where you were no longer resident, can that in itself be a crime?︌

3. How do you get the “strawberry ID” without paying taxes? Usually when you get︍ an ID from a high-tax country, you would be resident for the whole year? Say︎ you move to Italy to pick tomatoes and once you have your ID you say,️ sorry, they fired me. Won’t they still demand a tax return for the whole year‌ and at least demand to know where you paid your taxes? I’m thinking that could‍ quickly become quite a headache.

4. I still have a credit card from my country⁠ of citizenship which I sometimes use to top up EMIs and transfer funds back to⁤ myself. Either back to bank accounts in my country of citizenship or accounts countries and⁣ currencies. I could avoid the route via my old country of citizenship, but doing this⁢ allows me to earn a ton of credit card bonus points for free. Can that︀ be an issue? The EMIs have flagged me a couple times, but showing the source︁ of funds was fine and they have kept increasing my limits. Would it be better︂ to use the old credit card with a bank account from another EU country (the︃ strawberry country)?

5. Which countries are easy to give you an ID document and also︄ let you deregister again as an EU citizen?

It’s insane that I actually want to︅ move my a*s to the UAE, but I’m still scared of the consequences. This is︆ some 1984 s**t.

 

[JustAnotherNomad]

And what if you already have a personal or even business account with an EMI‌ or even a bank in good standing, but where you haven’t updated the residence? Would‍ it be possible that they will still report to former residency countries, just because they⁠ find it suspicious that you’ve moved to Mexico or UAE or even Italy? I’m glad⁤ I’m still a small fish, but who knows, maybe I will make a lot of⁣ money in a few years, and then I certainly don’t want to have to prove⁢ to my country of citizenship that I’ve really left for good. Which I have -︀ but being a nomad might not be such a clear case in there eyes, even︁ if I only spend very few days every year in my country of citizenship.

 

[ih8socialism]

1) Yes, all GCC countries are red flags imo, I left germany couple of years ago︈ and kept my german bank account, so when I go back to germany I wire︉ some money there so that I don't have to pay the ridiculous amount of fees︊ when I pay there with my UAE CC. Well, the first time after I moved︋ to UAE and came back for a vacation in germany I wired a medium 5︌ figure amount of money for my summer vacation. What happend? My Bank (Well it was︍ a small local one) instantly froze the money because they suspected money laundry. After a︎ couple of MONTHS(!) I was finally able to access my money again. I instantly closed️ my bank account and moved my money away from germany. On the other side a‌ friend of mine (german) living in Saudi since 10 years and still uses his german‍ bank account frequently but its with one of the bigger banks in germany. In the⁠ end it might be a good idea to cancel all ties to your home country⁤ if you really plan to center your life somewhere else.

2) This will get you⁣ into big trouble I assume

3) Why would you need it if you actually really⁢ relocate to UAE or any other GCC country?

4) If you move to UAE, obtain︀ one there and after you got it and can imagine living there, cancel it. I︁ don't think its really needed but better be safe than sorry

Some general things about︂ UAE, I used to live there for 3years and frequently visited it before.

Its a︃ great place to live if you have some decent funds available. The rent can be︄ expensive if you want to live in a nice area in Dubai or AD (check︅ out propertyfinder) and if you manage to not get sucked up into the expat life︆ style you can actually get around very well on a decent budget.

If you are︇ not quite sure about UAE yet, I recommend you check out Bahrain, startup costs for︈ a business are almost the same but the cost of living is cheaper there and︉ its a little bit more laid back compared to UAE. Also you get a good︊ access to the Saudi Market if you are interested in that.

Also keep in mind︋ that currently the pressure of the OECD is very high on UAE. Just for example︌ UAE businesses need to soon be in sync with 'Economic Substance Regulations'

 

[Osleak]

I’ve found this guideline in more than one local lawfirm website:

How does a Relevant‌ Entity satisfy the Economic Substance Test?
An entity satisfies the Economic Substance Test by demonstrating‍ that:

• it conducts its core income-generating activities (“CIGA”) in the UAE. Note that⁠ each of the Relevant Activities has its own CIGA specified in the Regulations, and the⁤ relevant CIGAs are set out under the response to question 6;
  
• the direction and management⁣ of the entity is conducted in the UAE with respect to its CIGA;
  
• the entity⁢ has an adequate number of qualified full-time employees, with respect to the CIGA, who are︀ physically present in the UAE or there is an adequate level of expenditure on outsourcing︁ to third-party service providers, whose activities, employees, expenditure, and premises are in the UAE;
  
• the entity incurs sufficient operating expenses in the UAE or incurs an adequate level of expenditure︂ on outsourcing adequate level of expenditure on outsourcing to third party service providers whose activities,︃ employees, expenditure and premises are in the UAE;
  
• there are adequate physical assets or adequate︄ level of expenditure on outsourcing to third-party service providers for the company to provide the︅ CIGA within the UAE;
  
• in the case of CIGA in the UAE is carried out︆ for the relevant entity by another entity, the relevant entity is able to monitor and︇ control the carrying out of that activity by the other entity.
  

 

[Osleak]

You should avoid to open FZE like shell company, of you hire adequate number of‌ employees, or you spend an adequate amount of money in outsourcing third party (uae company)‍ service providers.

rent at least a flexi desk, better flexi office

Some law firm suggest⁠ also to have local accountant

These above are the main guideline.

For US citizens I⁤ don’t know, but I think there is no chance to avoid us taxes and exchange⁣ data if you are director and shareholder of the company you should think to get⁢ citizenship instead residence...

 

[Davis123]

Mine is already known by IRS as︀ I filed everything to them legally through my CPA always but now I am tired︁ of the banks and investments rejecting me refusing my account etc just for a US︂ law effecting our lives living outside US for a decade when we have done nothing︃ wrong and filed our paperwork at the right time. It's just that the banks, brokerages︄ are getting compliance nightmares increasingly prohibitive. One broker told me simply get another passport and︅ do it illegally by not complying so we can open it up for you as︆ per our compliance dept as we have several US dual nationals too that we know︇ of. Excuse me I am not going to do this ever. Residents who live in︈ those countries who are dual nationals are being terrorized and told to go on the︉ wrong side of the law simply to make their compliance dept happy. What a stupid︊ law and only a stupid person will think of this type of law to terrorize︋ residents who are living earning in those countries. I read even architect of this law︌ never throught about residents of other countries being affected by this law and felt sorry︍ for them. The arguements are going on for a decade without fixes. More and more︎ banks, brokerages are getting effected everyday and saying no to residents too.
Andrew other offshore️ service providers are saying soon EU will become like US in worldwide taxation as soon‌ as Covid 19 goes away so he is not recommending people to get EU citizenship‍ and EU citizens to get a second citizenship to get out just in case.

 

[Osleak]

Yes i know and︌ i hope that this will not happen in EU ... btw at the moment there︍ are not many countries where get easy second passport, to get cheapest solution there are︎ not to much with investment of 150/200k if I remember well, but will the banks️ open account to Panama passport holder?

 

[Davis123]

You have to go to panama actually to get a second passport. As a friendly⁣ nations (I am expecting you are from EU, Canada , Australia ) visa holder you⁢ can get Panamian residency where you can live for 5 years (please check the time︀ again for its citizenship ) and get its Passport. You have to live in Panama︁ off and on to get its citizenship to prove your ties and regarding banks as︂ a Panamian resident you can easily open up bank accounts in Panama and Panama is︃ territorial citizenship so no worries. I don't know you will have any problems if you︄ open up bank accounts in other jurisdictions by showing residence in Panama. Many Americans have︅ shifted to Panama for for decades. It's a very good strategy and I liked it︆ 100 percent but it's a little expensive for those with school age children. UAE etc︇ will have corporate taxes soon from UAE lawyers interview and I think one needs plan︈ B just in case think about Malaysia or Panama. For those who go by the︉ book things get difficult in the end I believe now by looking at things. Andrew︊ got himself a Comoros passport years ago and I was thinking of getting it but︋ Comoros didn't want to do anything with UAE resident visa holders even though they were︌ giving away passports in their consulate in Dubai which is where Andrew ended up too.︍ In a year before I could wrap up my company and business to get out︎ of UAE and apply for a Comoros passport they made an announcement that they were️ shutting down the program.

 

[JustAnotherNomad]

@ih8socialism

1) I wouldn’t wire any money from/to the UAE via personal accounts, let alone‌ such sums. I’m generally skeptical of banking in autocratic countries, so I would probably keep‍ almost all my money outside the UAE and just pay with credit cards from other⁠ countries or cash. Or maybe I would keep a minimal balance in a UAE bank⁤ account.
What I’m worried about is my bank seeing that I have changed my address⁣ to UAE and then deciding to flag me to the taxman to cover their asses.⁢ And then the taxman demanding I prove my whereabouts for the last five years. And︀ while I’ve cut my ties with my home country, I’m worried they might just claim︁ I remained resident and have a court sort it out. I don’t want that. Even︂ if I would probably win in court.

2) My thoughts exactly.

3) The way I︃ understood @xsars, the idea is to have an innocent-looking country on file, just so they︄ don’t bother you. Because many people use the UAE as a fake residency.

4) I︅ already have credit cards from other countries which I use. But using that old credit︆ card to top up EMIs lets me collect lots of bonus points for free. Which︇ I can use for free flights. I don’t use the card for anything else.

I don’t think the rent in the UAE is that high. I have lived in more︈ expensive places before. Also I’m a nomad, so I would just rent out the apartment︉ when I’m not there. I don’t care about the substance rules. They are not enforced︊ by all emirates (yet) and freelancers are exempt. If it should get too bad, I︋ could simply buy real estate and get an investor visa. The best part is that︌ you don’t have to use an emirates company as a resident. Just live in the︍ UAE and register your business in some other country. Do you think the UAE is︎ going to go after you for tax evasion?
I actually welcome those substance requirements because️ they add legitimacy to all proper residents. They need to get rid of those remaining‌ in high tax countries and only going to Dubai two times per year.

 

[Nesso]

As per my understanding, ESR apply only to those individuals who are shareholders/mangers/directors of the‌ UAE company AND the foreign connected company.... So if you have only your UAE company‍ you are not concerned by the ESR.