Spain + US based partners running a C-Corp. Looking to optimize income tax.

[jamescameron]

I'm based in Spain where I'm a fiscal resident. I also have residency in Dubai, since I've lived there for 5 years prior to moving to Spain, and I have an Emirates ID as well as an LLC registered (that doesn't operate so far).

My partner is based in the US, where's a fiscal residence.

We have a business that's been operating for 3 years as a C-Corp based in Delaware with revenue >$1M. Our main markets are the US and Europe, where we have most of our clients (we have a couple in Dubai).

We're both looking for a better way to get paid, since we now pay up to 50% personal income tax. If we re-incorporated in Dubai and we'd distribute dividends, we'll get taxed just 25-27% instead of our current 50%.

However, how would Spain and US look at this setup? Can we claim that we incorporated in Dubai because we're based in different countries and needed an impartial jurisdiction, or is it going to lead to a tax audit?

We don't want to do anything illegal here, but we're looking at optimizing as much as we can.

Happy to pay for a full-fledged consultation, as I'm looking for a tax optimizing consultant I can work with in the long run.

Thanks

 

[OffshorePhantom]

Hello, if none of you currently live in Dubai and the Dubai company has no substance this would be seen as a way to avoid paying taxes in your residential country and challenged by the tax authorities.

Also if a foreign (in this case Dubai) company is managed by you in Spain or by your partner in US this will be seen as a Spain or US company for tax purposes (management and control rules).