Suggestion for Tax free Jurisdiction for Software company....Dubai Freezone Alternative

[Gediminas]

Yes, indeed, on 1 June⁣ UAE authorities announced that most free zone companies will become subject to tax, it was⁢ like U-turn from the previous communication.

As you ask for a simple solution (one company)︀ it might be a non-resident HK company, tax transparent US LLC, or other non-resident entity︁ which is registered in a high-tax country but does not have tax residency status.

But they have a disadvantage – treaties for the avoidance of double taxation basically do not︂ apply to such companies. It might impact mainly passive income: dividends, royalties, and interest (due︃ to withholding tax).

 

[donald1234]

only if there is no substance, of course.

 

[sergeylim88]

@Sols maybe you can give us some ideas about the alternatives?
it's not only about‌ corporate tax, it's also about with holding tax for dividends (lets keep this in mind).‍

 

[Marzio]

This entire thread is about alternatives which aren't that many.

Either you operate from a‌ tax free jurisdiction like Cayman, Bermuda, Bahamas, Anguilla and so on or you exploit temporary‍ incentives like Georgia Virtual Zone person (that at some point will cease to exist).

At some point you'll need to weight cost/benefits because Malta at 5% is nearly half of⁠ UAE's CIT.

 

[JustAnotherNomad]

But then⁠ where would you want to have personal tax residency for such a company? I've really⁤ grown to like the UAE, it was a perfect base for my lifestyle. But now⁣ with 9% corporate tax, it doesn't make that much sense anymore.

 

[Clearsky Network]

I would do Hong Kong or Singapore. 0% if your income is generated outside of‌ these countries.
Very reputable jurisdictions if you will need to open bank/EMI accounts.
Im not‍ a tax advisor, for more professional answer maybe worth consulting with one.

 

[JustAnotherNomad]

100% false.

 

[Clearsky Network]

will be happy to know why

 

[JustAnotherNomad]

Because you're wrong, that's why.
Singapore has some exemptions for foreign-sourced capital gains (passive income),‌ if you have paid tax somewhere else, but if you have active income, it's taxable‍ in Singapore.
https://www.iras.gov.sg/taxes/indiv...ble-what-is-not/income-received-from-overseashttps://www.iras.gov.sg/taxes/corpo...ions-for-companies/taxable-non-taxable-income
Singapore is not some banana republic where you can live in⁠ the country and not pay tax, just because you travel around sometimes.
No, it's not⁤ "foreign income" just because you were working while traveling.

I believe HK may have been⁣ less strict, but it seems like they're tightening the rules as well:
https://hongkong.dentons.com/en/ins...ong-kong-tax-update-on-foreign-sourced-income

 

[Clearsky Network]

Dont get mad, as stated above im not a tax advisor 🙂

 

[JustAnotherNomad]

Seems like there are quite a⁤ bit of additional social security taxes:
https://taxsummaries.pwc.com/kazakhstan/individual/other-taxes

 

[Cryptohodler]

For such a company will georgian banks be willing to⁣ open corporate account ? If ubo is non eea non resident?

 

[Don]

It is tricky but‍ possible.

We have one Georgian bank that opens account in 24h, but this is a⁠ premium service and for wealth management only (not transactional account)

 

[uranium]

Please dm I'm interested

 

[Clearsky Network]

Would a bank in‍ Georgia open an account for a foreign company that has no activity or employees in⁠ Georgia?

 

[Don]

Georgian banks open accounts‍ for any corporation, onshore or offshore if you use it for wealth management (not operational)⁠ and last time you needed to park at least 3M GEL. The exchange rate to⁤ USD is 2.59. Georgia joins CRS in 2024. It's still possible to use a UK⁣ trust solution not subject to CRS.