Quick Question

[max4]

Hello,

I have read through many-many threads, but my brain is slow af, so I need to ask this.

Let's say you have an online business. You create a UAE RAK company, and you Nominate someone to be the director. Now you are only the shareholder. You still live in your home country and you pay your income tax on your dividends fair and square. It's an online business so no way to really tell how the operations work. Can the local tax authorities still screw you because your company (in reality) is not managed in the UAE, or there is nothing to worry about?

 

[JustAnotherNomad]

max4 said:
Can the local tax authorities still screw you because your company (in reality) is not managed in the UAE
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Yes.

 

[orangeye]

yes they can, but if you find a trusted and recognized (if that exists in the UAE) accounting firm like pwc or deliotte or similar that can help you confirm how your business run, then most often you will not have any troubles with your tax office.

 

[max4]

How do they found it out? I mean in my case it's only me, and this whole thing is mostly automated.

 

[Sols]

Another thing that's automatic is the exchange of information under the CRS (Common Reporting Standard), whereby the bank used by your company reports your account to your local tax authority. When/if your tax authority sees this and investigates, they might come asking for proof that your UAE company has registered for tax and paid corporate income tax where you live.

There are a few other ways they might find out as well, such as asking you to explain where your declared incoming is coming from.

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This is the probably the answer to your question.

 

[max4]

Well, I don't really wanna hide from the local authorities, as long as I live there, I rather wanna hide my name from the public.

Maybe it's a dumb idea but, from the legal perspective would It be better if I create a local company too, and Invoice into the UAE Company for managing? Use the UAE just to hide my identity from the public.

Last edited: Nov 18, 2020

 

[EliasIT]

You need to speak with a local tax attorney he is able to clarify the situation for you and help you to avoid troubles.

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[max4]

I don't know if it's change anything in that regard but actually, it's an online business and I do most of the transactions in the US. No business in my home country.

 

[Sols]

It doesn't really change anything. The company is still tax resident in your home country since that's where you manage and control the company.

There are elements of nuance to pure online businesses, where in some cases web server location can be used as one of many deciding factors. But you're unlikely to run into that level of argumentation in the aforementioned structure.

Unless there are a lot of unusual quirks to this, it sound like a bog standard case of offshore company becoming fully tax resident where owner is located.

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This is the probably the answer to your question.

 

[tacokai]

You will have to relocate yourself if you want to avoid taxes or make a business with substance which most often is killing your budget.

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