Physical substance of visa motivated freezone companies in UAE

[Thomas67]

The main question⁤ of this thread has been addressed here above - conclusion in my last message.

For the license requirement, please see https://www.offshorecorptalk.com/th...with-own-funds-in-dubai-uae.44800/post-336895 where the view and source I've shared make sense⁣ I believe.

 

[JustAnotherNomad]

No, because there are no clear rules. Anyone can give their opinion. Maybe‍ it later turns out to be correct, maybe not.
The best thing you can do⁠ is try to send a formal inquiry to the federal tax authority. But even then,⁤ who knows.

You really know nothing about autocratic countries, do you? There is no rule︀ of law. It's whatever the ruler decides.
So what, you have your paper, today the︁ ruler decided that things should be different, so you broke the law and go straight︂ to prison.
Who are you going to complain to, the ruler himself? Lol.

The reason︃ why the West is prosperous is that there are independent courts (at least to some︄ degree) that can even sentence a president.
There is no such thing in countries like︅ the UAE.

 

[Thomas67]

You would probably be protected for the period mentioned in⁤ such inquiry I believe; or please provide a source.
The ruler is certainly free︂ to adjust the law but I think you're oversimplifying things. There are different courts in︃ UAE (incl. appeal and cassation); your lawyer can perfectly ask a new judgment from another︄ panel if relevant.

Also, in case of important changes in the law (best example being︅ the corporate tax), the law and regulators usually foresee buffer periods to allow the concerned︆ people/companies to become compliant. Retroactivity might not be systematic either, it could depend on the︇ case I believe. Regularly reviewing websites of the regulators seems however particularly important. In doubt︈ (regulatory risk), best is to wait before residing in UAE or to relocate I believe,︉ as with any country depending on the field.

 

[JustAnotherNomad]

I think you're doing the best you can, and I agree that it would probably work out.
But there is no rule of law. It's not a place I would‌ want to do business.

I also think there is a risk that by setting up‍ a local company and trying to be compliant, you would actually increase the risk because⁠ you would attract attention.
If you just traded under an offshore entity, nobody would even⁤ find out.

I'm not sure it's a good idea to treat a banana republic as⁣ if it was a Western country.

 

[Thomas67]

Your second section makes sense, though it's a matter of assessing the risks and consequences,‌ which depends from one person or one field to the other. Anyway, I think we‍ get your point.

 

[happyjohn]

That's strange, lot's of company owners in the⁣ UAE must have problems with the tax authorities then? I never read about this to⁢ be an issue before?

 

[JustAnotherNomad]

Corporate tax is still very new. They are obviously going after the big‍ companies first.
VAT has been around for a few years, but that's only relevant when⁠ you sell locally, which many companies don't do.

It's just very difficult to get answers⁤ to such questions. Both because these laws are new, but also because it's so different⁣ in general to get proper information. And even if you could get information, you can't⁢ trust that it won't be changed again tomorrow, or that some court will find something︀ else to stick you with, because you're in conflict with the wrong person, and that︁ person has good connections.

It's difficult to describe if you haven't lived in a country︂ like that.