Important! RAK ICC Company Dubai and new rules economic Substance
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If your company is conducting distribution services, whether goods or services, but only to a related foreign party. So in your case, are you providing the software to a company outside of the UAE, AND are those companies related to you by way of shared ownership. If you are only providing services to non related parties then you are NOT undertaking a 'relevant activity'.
You have to remember the idea of the ESR is to see if you are︀ doing BEPS (base erosion and profit sharing), so if you are trying to reduce the︁ profit of a related company in a taxable country. If you are selling (services) or︂ buying (goods) from a non related party then you are not enabling base erosion.
Hope that helps
You have to remember the idea of the ESR is to see if you are︀ doing BEPS (base erosion and profit sharing), so if you are trying to reduce the︁ profit of a related company in a taxable country. If you are selling (services) or︂ buying (goods) from a non related party then you are not enabling base erosion.
Hope that helps
I live in Dubai. My setup feels safe. There are several developments regarding ESR since the last post. Those entities completely exempted from CRS in UAE
- Entities that are wholly owned by UAE residents are not part of a multinational group, and only carry out business activities in the UAE.
- Natural persons, sole proprietors, trusts and foundations are no longer subject to the ESR and, as such, they are not required to file economic substance notifications(ex mainland company with a single owner).
https://www.eversheds-sutherland.co...introduces-new-economic-substance-regulations
I think those︀ developments are game-changer for companies with a single owner or owner who is not living︁ in UAE.
- Entities that are wholly owned by UAE residents are not part of a multinational group, and only carry out business activities in the UAE.
- Natural persons, sole proprietors, trusts and foundations are no longer subject to the ESR and, as such, they are not required to file economic substance notifications(ex mainland company with a single owner).
https://www.eversheds-sutherland.co...introduces-new-economic-substance-regulations
I think those︀ developments are game-changer for companies with a single owner or owner who is not living︁ in UAE.
You need to have some type of "substance" because by doing that you have to pay VAT!!
Of the 150K plus companies that are registered in the UAE, you can imagine how much revenue that brings in.
I am going next week to negotiate a serviced office and telephone answering service for all my clients with a provider in Dubai.
They will give you a hot desk and telephone answering service for about 1000 per year and an "employee" for about 500 per month.
So about 6K per year but we know that will be negotiating that down.
Of the 150K plus companies that are registered in the UAE, you can imagine how much revenue that brings in.
I am going next week to negotiate a serviced office and telephone answering service for all my clients with a provider in Dubai.
They will give you a hot desk and telephone answering service for about 1000 per year and an "employee" for about 500 per month.
So about 6K per year but we know that will be negotiating that down.
Did you︀ check mainland companies with a professional license? It is a sole proprietorship company and exempt︁ from ESR also easy to open a bank account. I think it is a good︂ setup for people not really living UAE. The setup/renewal/visa cost should be around 6-8k USD︃ per year.
You would be the substance in that case anyway.
And it’s just you, you can get a freelancer license instead. You don’t need a full company. In some emirates, the freelancer license actually comes as a FZE company with a name of your choice - so from the outside you can’t tell if it’s a proper company license or just a freelancer license that’s behind it. The freelancer license is a︀ good deal cheaper.
And it’s just you, you can get a freelancer license instead. You don’t need a full company. In some emirates, the freelancer license actually comes as a FZE company with a name of your choice - so from the outside you can’t tell if it’s a proper company license or just a freelancer license that’s behind it. The freelancer license is a︀ good deal cheaper.
Increased cost of accounting but it's not really a problem but good to make people aware.
A client of mine sells crypto to UAE residents and got stung on VAT. So he had to set up an LLP to take payments from UAE resident. Then transfers it back to the UAE.
Just thought I would share the VAT issue.
A client of mine sells crypto to UAE residents and got stung on VAT. So he had to set up an LLP to take payments from UAE resident. Then transfers it back to the UAE.
Just thought I would share the VAT issue.
But if you’re looking for an actual freelance permit, it is provided by TECOM group freezones (Media City, Internet City, Knowledge Village) in Dubai and by “twofour54” in Abu Dhabi.
Ajman, probably others as well.
Just be aware that business banking in the UAE can be difficult/impossible if you don’t have your own office (flexi desk). But you could probably just bank elsewhere (EMI) and only use a personal bank account in the UAE.
There are also mainland companies offering “freelancer visas”, but that’s not the same thing. They hire you as an employee, so you get an employee visa and need your “employer’s” approval for everything. In the︀ freezones, you should usually get an investor visa, so you’re your own boss. But of︁ course you’re not allowed to do business with UAE customers in the freezones, so if︂ you want that, you need to get a mainland visa. I’m not sure if it’s︃ legal to circumvent that buy using an offshore company if the work is done in︄ the UAE, probably not. If you work for UAE customers from outside the UAE, I︅ guess it would be fine.
Just be aware that business banking in the UAE can be difficult/impossible if you don’t have your own office (flexi desk). But you could probably just bank elsewhere (EMI) and only use a personal bank account in the UAE.
There are also mainland companies offering “freelancer visas”, but that’s not the same thing. They hire you as an employee, so you get an employee visa and need your “employer’s” approval for everything. In the︀ freezones, you should usually get an investor visa, so you’re your own boss. But of︁ course you’re not allowed to do business with UAE customers in the freezones, so if︂ you want that, you need to get a mainland visa. I’m not sure if it’s︃ legal to circumvent that buy using an offshore company if the work is done in︄ the UAE, probably not. If you work for UAE customers from outside the UAE, I︅ guess it would be fine.
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