Transitioning from Dubai

[Remover0707]

Hi everyone, given that Fred has closed the Dubai corporation, and widely popular his service was on this forum - what's everyone's plans with regards to Dubai? And with regards to transitioning and such? (perhaps a new service by someone new, or will we need to contact the free zone directly now)

It seems strange that Fred needs to close simply because of 9% corporate taxation of a subset of businesses. I had thought Dubai was still a good prospect after all even with the taxation on some businesses. Anyone care to give input on that? Anyhow - hopefully Fred is safe, as his disappearance is highly strange.

Last edited: Aug 4, 2023

 

[uranium]

Everyone is stuck at this point. Everyday⁢ someone will come and ask same question. Where to go ?
It seems that even︀ if you are going to run offshore company while living in dubai, you still have︁ to pay taxes.
So what is needed now; offshore jurisdiction where you can get: visa,︂ company, business bank account, personal account, tax free. Straight forward process just like dubai.
Let's vote for next destination!

 

[Remover0707]

I just figured that a small 9% tax on a small % of businesses⁢ would be still worthwhile to keep the Dubai option.

 

[uranium]

No way!‍
UAE on Fatf Grey list + 9% taxes !!!
Absolutely not worth it!

 

[Fred]

Again I can just repeat myself the︁ reason behind the closing of Business is not the 9% Corporate Tax which is absolutely︂ no issue to handle as a Personal Individual and Business Owner.

However for DLS Dubai︃ this would have required to hire at least 5 more people to run the show︄ for so many clients Accounting/ Bookkeeping and in addition to this fighting with the truth︅ against so many other Dubai Corporate Service Provider talking bulls**t.

That's how I see it as well︈ and most DLS Dubai Clients and for people like you I remain active as an︉ Independent Consultant.

 

[Larin]

@Fred it would be great to get some recommendations for a trustworthy accountant to do‌ the reporting that will be required.

 

[JustAnotherNomad]

The issues with the UAE are much bigger than 9% tax:
- Unclear rules (seriously,‌ how do people just keep asking and speculating how the tax will be handled, for‍ months!)
- Unexpected fees and fines for everything (e.g. "cancellation fee")
- No limited liability⁠ (company can only be closed if you accept all company liability as your own)
- No rule of law

It used to be ok, no tax, nothing to file, live⁤ and let live. But I don't understand how anyone could be willing to operate under⁣ the new circumstances.

 

[troubled soul]

True...You can lose sleep over this....end of the day⁠ It is sharia country...95% of government staffs are unqualified and lazy for serious tax matter....They⁤ will give your hard time.
UAE is not small Island or some city state..
Even with oil money You can not run country of 9.2 million people tax free.....Government need⁣ money...Cost or running New York level city in desert cost huge money...There is no natural⁢ fresh water source....Inside everybody know this was coming.....UAE is dead for "total tax free business︀ operation"..

It is still too early to say what the long-term impact of these changes︁ will be. However, it is clear that the UAE is moving away from its traditional︂ tax-free status. This is likely to have a significant impact on the business landscape in︃ the country.

Cayman enterprise city, Estonia and HK company are Good alternative to Dubai as︄ of today

 

[uranium]

Estonia tax free ?

 

[troubled soul]

CIT 0%
WT 20%

 

[uranium]

WT only from salary?

 

[Don]

Non resident salary is 0% for‌ work performed outside Estonia, but profit distributions are 20%, unless profits are redistributed from foreign‍ PE or subsidiary (participation exemption), which are exempt from tax.

 

[troubled soul]

Use Estonia company as a piggy bank..

 

[uranium]

profit distributions‌ are 20%, means I pay 20% from my profits?

 

[troubled soul]

When you pay yourself as a dividend than and than 20% tax apply...
Like
If your company make 500k USD profit and It is in bank account under Company‍ name...there is not tax here...
You can pay yourself 5k USD salary per month as⁠ non resident director....5k*12=60k USD tax free......(You can pay yourself any reasonable amount of salary tax⁤ free😉😉😉😉😉 )

Now If you want more money from company like You want more 60k⁣ as dividend ..You have to pay 20% on this dividend

P.S. I am not expert..⁢ Take legal help before taking any steps

 

[Fred]

Just reach out directly‍ to the Authority which overtook all DLS Dubai Employees so you get the DLS Dubai⁠ Experience except my Personal Pointers and Consultation which is anyway no really possible to get⁤ from an Employee and was what made DLS Dubai really great.

For a small circlle⁣ of DLS Dubai Clients I know well I remain available as a Paid Consulting and⁢ I try to keep the Sponsorhip of the Forum up and running as well.

 

[Billybob69]

Forgive my ignorance︀ @troubled soul but how would something like that actually work in practice, if you are︁ running an Estonian company to be a non resident do you have to stay out︂ of Estonia? If so where would you have to actually live, somewhere without CFC rules?︃

 

[troubled soul]

I am not expert but Estonia company⁤ with E residency is always tax resident of Estonia ......

 

[Don]

Yes, and profits arising from a foreign‍ PE that are already taxed will not be taxed again in Estonia.
If the profits⁠ from foreign PE are not taxed, they will be taxable on distribution only so can⁤ still be reinvested tax free.
Estonia also does not withhold tax on interest paid to⁣ non-residents (and even residents in certain cases), so an owners loan with high interest can⁢ be one of the ways to extract some money from the company tax free (works︀ well if you are based in UAE).

Similarly Estonia will not tax the directors fee(or︁ similar fee as per DTT) from UAE if you are a tax resident.
A small︂ business in UAE with high directors fee and low margin can potentially be an interesting︃ proposition for Estonian tax residents, especially from 2027 when small business relief will be abolished.︄

Estonia tax code looks simple, but its often misunderstood as most accountants and advisors often︅ do not realize the possibilities of structuring to optimize tax.

Structuring your operations to leverage︆ the strengths of both the Estonian and UAE tax systems can potentially provide you with︇ significant tax and operational benefits.

As always, specific tax planning strategies should be thoroughly discussed︈ with a professional tax advisor to ensure compliance and effectiveness.

 

[TheCryptoAnt]

Im going back‌ to Thailand, in retrospective.... I shouldve never left